We dive into common landlord mistakes and how to avoid them, drawing from Robert Flowers' real-world experiences in property management. Expert insights reveal how seemingly small decisions can significantly impact your investment's profitability and sustainability.
• Charging above-market rent often leads to costly vacancies rather than higher profits
• Never skip proper tenant screening, even for acquaintances or referrals
• Underestimating maintenance costs can create financial emergencies and legal issues
• Managing properties like a business requires clear policies consistently enforced
• DIY property management often costs more through mistakes and burnout
• Knowing landlord-tenant laws is non-negotiable for avoiding fines and legal trouble
• Don't assume tenants share your values or standards of property care
• Develop contingency plans for market downturns and other unexpected scenarios
• Special needs housing requires even greater attention to stability and reliability
Check out Robert Flowers' book "The Joy of Helping Others" for more valuable insights, and consider what area needs your most careful planning before becoming a landlord.
Episode Transcript
Welcome to the Deep Dive.
We're here to basically boildown complex information so you
get the key takeaways fast.
Speaker 2 (00:07):
Exactly, and today we're diving into the world of
being a landlord some commonmistakes and, maybe more
importantly, how to sidestepthem.
Speaker 1 (00:16):
We're drawing on some real-world lessons here and
actually speaking of real-worldexperience, we want to thank
Flowers and Associates PropertyRentals for supporting us today.
Speaker 2 (00:25):
Ah, yes, they specialize in special needs
housing, a really important area.
Speaker 1 (00:30):
It is, and many of you might remember Robert
Flowers, the founder.
He wrote the Joy of HelpingOthers, a fantastic book, and
he's been on before.
Those are really populardiscussions.
Speaker 2 (00:39):
Definitely well-received.
His insights are well, verypractical.
Speaker 1 (00:44):
So today we're tapping into some of that wisdom
, again focusing on landlordpitfalls.
The mission give you actionableinsights, whether you own
property now or you're just, youknow, curious about it all.
Speaker 2 (00:55):
Let's get into it.
The first big one, robert,learned about chasing that super
high rent figure.
Speaker 1 (00:59):
Right, Sounds good on paper maybe.
Speaker 2 (01:01):
Yeah, but the reality can bite you, robert.
Listed above market valuethinking more money, right, but
the unit sat empty Four months.
That's a lot of lost income.
It really highlights the costof vacancy.
Speaker 1 (01:15):
So it's better to get a slightly lower rent from
someone reliable maybe.
Speaker 2 (01:18):
Often, yes.
Consistent income from a goodtenant usually outweighs holding
out for that absolute topdollar.
Especially when you factor inthe vacancy time, it just builds
a stronger financial base.
Speaker 1 (01:29):
Okay, that makes sense.
Yeah, and finding those goodtenants.
That leads to screening,doesn't it?
Speaker 2 (01:34):
Yeah.
Speaker 1 (01:34):
Robert had a story there too.
Speaker 2 (01:35):
Oh yeah, the classic friend of a friend's situation.
Speaker 1 (01:39):
Never ends, well, does it?
Speaker 2 (01:40):
Well, in this case definitely not.
He skipped the proper checksbecause, you know connection
Tenant skipped town, eventuallydidn't pay, trashed the place,
huge repair costs, ouch.
So yeah, proper screening,credit checks, background checks
, references, it's not just redtape, it's essential risk
management for your investment.
Speaker 1 (02:00):
Got it.
Protect the asset.
Speaker 2 (02:02):
Yeah.
Speaker 1 (02:02):
And speaking of costs , it's not just about potential
tenant damage.
There's ongoing maintenance.
Easy to underestimate that.
Speaker 2 (02:09):
Totally.
You budget for paint, maybe anew carpet eventually.
But what about the big stuff?
Speaker 1 (02:14):
Like Robert's HVAC emergency.
Speaker 2 (02:16):
Exactly.
That wasn't just inconvenient,it was expensive, and if you
don't fix essential things likeheat or plumbing quickly, you
could face legal problems too.
Speaker 1 (02:24):
Right.
So you need a propermaintenance fund, not just
wishful thinking.
Speaker 2 (02:29):
Absolutely Budgeting proactively for those big,
inevitable repairs is key.
Speaker 1 (02:34):
Now another tricky area managing the property like
a business, not letting emotionstake over.
Speaker 2 (02:42):
Yeah, this is a tough one for a lot of landlords,
especially starting out.
You want to be empathetic, ofcourse, but Robert shared an
experience with a tenant whocouldn't pay.
He let it slide for, I think,six months.
Speaker 1 (02:52):
Six months Wow.
Speaker 2 (02:53):
Yeah, the financial hit was significant.
It really shows you need wellclear policies and you have to
stick to them, even when it'suncomfortable.
It's about protecting yourfinancial viability.
Speaker 1 (03:03):
Finding that balance between compassion and well
business reality.
Speaker 2 (03:07):
Precisely.
Speaker 1 (03:08):
Okay, and what about trying to do everything yourself
?
Save some money maybe.
Speaker 2 (03:12):
Ah, the DIY landlord.
It seems cheaper at first,right, no management fees.
But Robert found he was justburnt out and worse, he worried
he might be missing things,making mistakes, because he was
spread too thin.
Speaker 1 (03:26):
Like legal details or maintenance checks.
Speaker 2 (03:28):
Could be anything.
Sometimes paying forprofessional help a good
property manager, qualifiedrepair people actually saves you
money and stress down the line.
It's about knowing your limitsand valuing expertise.
Speaker 1 (03:40):
That makes sense.
Yeah, and speaking of legaldetails, you absolutely have to
know the rules Landlord-tenantlaw.
Speaker 2 (03:46):
Non-negotiable Robert learned a costly lesson
regarding disabilityaccommodations specifically.
Speaker 1 (03:52):
Okay.
Speaker 2 (03:52):
But it applies across the board Evictions, security
deposits, fair housing laws.
Ignorance isn't an excuse andmistakes can lead to serious
legal trouble and fines.
Speaker 1 (04:02):
You really need to be up to date on the regulations
in your specific area.
Speaker 2 (04:05):
Absolutely.
They can vary quite a bit.
Speaker 1 (04:07):
Another point Robert made which I found interesting
was about assumptions.
Assuming tenants think like youdo.
Speaker 2 (04:13):
Yeah, the everyone is like me trap.
He had a tenant who seemed veryprofessional, you know.
Good job, presented well.
Speaker 1 (04:19):
Live good on paper.
Speaker 2 (04:20):
Totally Turned out.
They treated the place like aconstant party house.
Lots of noise complaints, extrawear and tear.
Speaker 1 (04:27):
So you can't just go by appearances or assume shared
values.
Speaker 2 (04:30):
Nope, you need objective standards, clear rules
in the lease agreement aboutnoise, guests, property, use
everything spelled out.
Speaker 1 (04:38):
Okay, and finally thinking about the long game
exit strategy.
Speaker 2 (04:43):
Right.
Don't just assume the rentalmarket will always be hot or
that you'll always have tenantslining up.
Speaker 1 (04:48):
Robert experienced a slowdown.
Speaker 2 (04:50):
Yeah, during an economic downturn, demand
dropped Suddenly.
Finding tenants was much harder.
Speaker 1 (04:55):
So you need a plan B or C.
Speaker 2 (04:57):
Exactly what if you need to sell quickly?
What if rent softenssignificantly?
Having contingency plans fordifferent market scenarios is
just smart long-term planning.
Speaker 1 (05:07):
And I guess thinking about Flowers and Associates and
their focus on special needshousing, providing that stable
housing makes avoiding all thesepitfalls even more critical.
Speaker 2 (05:16):
That's a really good point.
Stability and reliability areparamount in that context.
These lessons apply everywhere,but maybe carry extra weight
there.
Speaker 1 (05:24):
So, wrapping this up, the main takeaway seems clear
Learn from others' mistakes.
Robert Flowers' experiencesoffer some really valuable
shortcuts.
Speaker 2 (05:33):
Definitely Paying attention to these common
pitfalls can save you a ton oftime, money and, frankly, stress
.
Speaker 1 (05:39):
Our thanks again to Flowers and Associates and to
Robert Flowers himself forsharing these lessons, and do
check out his book, the Joy ofHelping Others.
Speaker 2 (05:47):
It's a great read.
Speaker 1 (05:48):
And for you listening , considering all these
potential issues, from tenantscreening to market shifts,
what's the one area you thinkneeds the most careful planning
before you even get started?
Something to chew on.
Speaker 2 (06:00):
Good question to ponder, until next time on the
Deep Dive.
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