Being a landlord can be great in that you get to meet lots of people, if you are a people person. But it can also be a big headache, esp. if you have older properties that need a lot of repairs. It really helps to think ahead and do your research. Mistakes can be costly and really make you hate the whole thing.
Mistake # 1: Buying older properties that are affordable but need a lot of maintenance, and you are not prepared for it.
If you are a great handyman or have access to one, you might be okay, but really why bother with this? Buy a property that is a good working condition. Or if you have the loans, purchase renters insurance. There are several good ones out there and they will let you choose what appliances / components of your rental house you want to insure.
Mistake # 2: Not repairing any problems in a timely manner
When a tenant calls you with a needed repair, you need to IMMEDIATELY jump on it. Do it yourself or call the handyman right away, and this will very much impress your tenants and show them that you care. It certainly creates the happiest, most satisfied tenants.
Mistake # 3: Not checking out equivalent rental rates in the area
Look on real estate websites for equivalent values of other rental properties in the area. You can even hire a real estate agent to look on the websites themselves to help you out. An agent can also bring you prospective renters, but do know that the agent will likely take a cut of your rental property if you do this, so be prepared and ask their terms.
Mistake # 4: Not screening for the right tenants
It is really important to check the background of your tenants and to ask previous landlords what they were like. I know it is exciting to get an answer on your rental ad, but not every tenant is a good tenant. The most important characteristic of a good tenant is the ability to pay. Check out where they work, get income verification, and references. Nightmare tenants that bother the neighbors and are slow to pay or do not pay you are not worth it!
Mistake # 5: Not setting your rent high enough to cover expenses
Many landlords make the mistake of not accounting for all of their expenses. You have to take things like taxes, maintenance fees, utility bills, and other expenses into consideration. Even things you might not think about at first; such as advertising. You will have to spend money on property taxes to the city and possibly the county, as well as spend money advertising your property in the classifieds. Also set the rent high enough that when the repairs are needed you have enough to feel comfortable covering the cost of those.
As long as you avoid these common mistakes, you should be able to get started, and be in profit, far more easily than you probably think is possible. There is nothing better than knowing that in a short time, you could own your own profitable rental properties! It's very rewarding, and can certainly change your life for the better.