5 Common Mistakes New Landlords Make (And How to Avoid Them)

Becoming a landlord can be incredibly rewarding, but it comes with a learning curve. After talking with hundreds of small landlords, we've identified the most common mistakes new property owners make—and more importantly, how to avoid them.

1. Poor Tenant Screening

The Mistake: Accepting the first applicant who seems nice without proper screening.

Why It Happens: You're eager to fill the vacancy and start collecting rent. The applicant seems friendly and professional during the showing.

The Consequence: Late payments, property damage, neighbor complaints, or worse—an eviction that costs thousands in legal fees and lost rent.

The Solution:

• Always run credit and background checks
• Verify employment and income (rent should be ≤30% of gross income)
• Call previous landlords (not just the current one)
• Have clear, written screening criteria applied to all applicants
• Trust your gut, but verify everything

2. Inadequate Lease Agreements

The Mistake: Using a generic lease template downloaded from the internet or worse—a handshake agreement.

Why It Happens: Legal documents seem intimidating and expensive. A simple agreement feels sufficient.

The Consequence: When disputes arise, you have no legal protection. Issues that could be simple to resolve become complicated and costly.

The Solution:

• Use a state-specific lease agreement
• Have a lawyer review your lease template
• Clearly outline all terms: rent amount, due date, late fees, maintenance responsibilities
• Include clauses for common scenarios (guests, pets, subletting, property access)
• Have tenants initial important sections
• Keep signed copies secure and accessible

3. Neglecting Property Maintenance

The Mistake: Putting off minor repairs or only addressing issues when tenants complain.

Why It Happens: Maintenance costs money and takes time. It's tempting to delay non-urgent repairs.

The Consequence: Small problems become expensive disasters. A small leak becomes major water damage. Deferred maintenance drives good tenants away.

The Solution:

• Create a preventive maintenance schedule
• Address repairs promptly (within 24-48 hours for urgent issues)
• Do seasonal checks: HVAC before summer/winter, gutters in fall, etc.
• Build relationships with reliable contractors
• Budget 1-2% of property value annually for maintenance
• Document all maintenance in your property management system

4. Mixing Personal and Business Finances

The Mistake: Using your personal bank account for rental income and expenses.

Why It Happens: It seems easier than opening a separate account, especially with just one property.

The Consequence: Tax nightmares, inaccurate financial tracking, difficulty proving business expenses, and a messy audit if you ever face one.

The Solution:

• Open a separate business checking account immediately
• Get a dedicated credit card for property expenses
• Use property management software to track all transactions
• Save receipts for everything property-related
• Consult with a CPA about your specific tax situation
• Pay yourself a regular "distribution" rather than taking money randomly

5. Being Too Hands-Off (or Too Hands-On)

The Mistake: Either never checking on your property, or showing up unannounced constantly.

Why It Happens: You want to protect your investment, but you're not sure what the right balance is.

The Consequence:

• Too hands-off: Issues go unnoticed until they're serious
• Too hands-on: You violate tenant privacy rights and create an uncomfortable living situation

The Solution:

• Schedule regular property inspections (quarterly or bi-annually)
• Always give proper notice (typically 24-48 hours, check your state laws)
• Be responsive to tenant requests without being intrusive
• Do drive-by checks for exterior issues (lawn, roof, etc.)
• Use a tenant portal for communication—creates a paper trail
• Respect your tenant's right to "quiet enjoyment" of the property

Bonus: Not Treating It Like a Business

Many new landlords treat their rental property as a hobby rather than a business. This leads to:

• Poor record keeping
• Emotional decision making
• Lack of systems and processes
• Inconsistent policies

The Solution: From day one, treat your rental property like the business it is:

• Keep professional records
• Make data-driven decisions
• Create standard operating procedures
• Use professional property management software
• Continuously educate yourself on landlord-tenant law
• Join local landlord associations

Conclusion

Every landlord makes mistakes—it's part of the learning process. But by being aware of these common pitfalls, you can avoid the most expensive and stressful ones. Focus on building good systems from the start, and you'll set yourself up for long-term success.

Want to avoid the mistake of poor organization? Try Set & Rent free and get your rental business on solid ground from day one.