Soon To Be First Time Landlord, What Mistakes Am I Going To Make?

[Maxwell Milholland]

Hello everybody, I am not a landlord yet, but if all goes to plan I will own a two unit upper lower in which I plan to house hack in the next couple months. As with all things in life, no matter how prepared I feel or how much front end research I put in, mistakes will be made. My question is which mistakes are most newbie landlords most prone to, and how can I avoid them? Any tips, suggestions, or any advice in general would be very helpful. Thank you in advance! Just a bit of background info which may be relevant. House is in Buffalo, New York. 2000 square feet upper lower. Will be in good condition when time comes to rent out. Tenant pool to my knowledge is good hard working people whom I don’t foresee and issue with finding a reliable tenant. If any additional info is needed please let me know and I will provide!

[Jennifer Rysdam]

I look forward to reading everyone else's responses as I've only been doing this for a couple of years myself.
Here are my tips. 

Don't make friends! Be friendly and respectful, but don't make friends. 

Don't be lenient on rent. People will have all kinds of sob stories, true or untrue, and you can really get taken advantage of. They wouldn't ask their friend to pay their rent, why should they be asking their landlord to do it! 

Screen your people well. Don't be so anxious to get someone in there that you get the wrong person. Go with your gut. Mine has never been wrong and every time I haven't followed it I've gotten bit in the butt.

Good luck! :)

[Suly B.]

@JD Martin I agree with you! To add to that, following through on the rules that were laid out in the lease is very important. If the landlord breaks his or her own rules the tenants will too. Example: Advising that there will be quarterly inspections but you never actually show up.

[Michael Strobel]

@Maxwell Milholland

Lots of great advice here.

As someone that house hacked a side by side duplex for 2 years, keep it strictly professional with the tenant you live next to. It easy to build a relationship with them as you see them by their car or if their kids are outside etc. once I house hacked into another property, then that tenant started asking for favors even though I had a prop mgr in place. She had my phone number and would go to me before my prop mgr. asking for lower rent etc.

It’s a fine like to walk between professionalism (since your running your duplex like a business) and friendship. Don’t veer close to friendship.

[Jill F.]

• Make sure you have a policy and processes in place for every repeatable task and/or event you can think of. For example, late rent- If you have a system for dealing with late rent payments that you have thought out in advance you won't have to make a decision each time it comes up; You will just execute your plan. Don't wait for the furnace is blowing cool air when its 5 degrees phone call-- Have a process to make sure your HVAC filters get changed at least a couple of times a year (Don't trust the tenant-- it's your furnace). What order will you do your tenant screening steps, will you require an application before a showing? What if you get too many applicants, not enough applicants? Will you do open houses or private showings? will you wait until the current tenant moves? What if the tenant you approve won't have the money for a week? two weeks? Have a policy. The list goes on and on.
• Be flexible and willing to modify your policies and processes if you learn of a better way or something isn't working. Almost two and a half years in we are still revising (and improving) many of our processes. I talked to a guy that did student rentals who turns over 90% of his units EVERY year about how he does move-ins. It was impressive. This is an area that I am currently working to improve.
• Document your policies and processes. You won't remember everything. really you won't.

Having policies and processes is the difference between having a hobby and having a business.

[John N.]

You will eventually rent to friend or family.    NEVER EVER ends well.