Is proudly owning a rental property as straightforward and worthwhile because it sounds?
Or might speeding in with no plan find yourself costing you excess of you anticipated?
On this article, you’ll be taught the highest 5 costliest errors landlords make—and tips on how to keep away from each with smarter, proactive steps.
From skipping inspections to utilizing the improper insurance coverage coverage, we’ll cowl what to not do and provide you with actionable recommendation you may belief—primarily based on years of expertise insuring rental properties for on a regular basis landlords such as you.
1. Skipping Due Diligence Earlier than Shopping for
Shopping for a rental property with out totally understanding its situation is the one costliest mistake new landlords make.
Many rush in, pondering an affordable buy equals massive income. However the low value typically indicators critical points—getting older infrastructure, mildew, outdated wiring, or uninsurable situations. You may get caught with a cash pit that no insurer needs to the touch.
✅ What to do as an alternative:
- All the time rent a trusted third-party house inspector.
- Make sure the roof, plumbing, electrical, and HVAC are as much as code.
- Take a look at for mildew and doc it.
- Perceive the price to carry every thing as much as livable requirements earlier than signing a contract.
If the numbers don’t make sense after your inspection, stroll away. It’s higher to cross than inherit a legal responsibility.
2. Not Having a Written Lease (and Authorized Assist)
A verbal settlement shouldn’t be a rental settlement.
You possibly can’t implement “you break it, you purchase it” with no legally binding lease. And also you definitely can’t shield your self in court docket in case your phrases aren’t written clearly and professionally.
✅ What to do as an alternative:
- Pay a lawyer to create or evaluate your lease settlement. It’s definitely worth the upfront funding.
- Keep on with 12-month leases minimal.
- Be sure the tenant understands the lease—not simply indicators it.
Clear contracts present you’re critical and assist cut back battle later.
3. Failing to Display Tenants Correctly
Determined landlords put within the first particular person with a pulse and a paycheck. That’s dangerous.
Skipping background checks or credit score reviews can depart you with unpaid hire, property harm, or worse—authorized bother.
✅ What to do as an alternative:
- Run a credit score and felony background examine.
- Be cautious about permitting smoking or pets—these are frequent sources of injury and legal responsibility.
- Require renters insurance coverage (an HO-4 coverage) and have tenants present a replica on your information. This ensures they’re lined for private property and legal responsibility, lowering your threat.
Sure, it takes a couple of further days to display, however it may possibly prevent 1000’s in the long term.
4. Utilizing the Unsuitable Kind of Insurance coverage
Common householders insurance coverage gained’t cowl rental properties—and that’s an issue you gained’t uncover till a declare is denied.
You want a particular sort of coverage designed for non-owner-occupied houses.
✅ What to do as an alternative:
- Get a Dwelling Fireplace or Landlord coverage.
- Notify your insurer if the house can be vacant for 30+ days—protection can lapse with out discover.
- Keep away from insuring properties that insurers are hesitant to cowl (e.g., uncared for, high-risk, or low-income leases with out updates).
- Think about including a private legal responsibility umbrella coverage that extends protection above and past the legal responsibility limits of your landlord coverage. This added layer of safety may be invaluable should you’re ever concerned in a critical legal responsibility declare.
The fitting coverage offers you peace of thoughts. The improper one can depart you bankrupt.
5. Shedding Observe of the Property Over Time
Out of sight ought to by no means imply out of thoughts on the subject of your rental.
Some landlords don’t even know the age of the roof or what the home is made from. Others haven’t set foot inside since buy. That’s a recipe for costly surprises.
✅ What to do as an alternative:
- Observe all updates and repairs in a shared folder or spreadsheet.
- Bodily go to or drive by the property each 3–6 months.
- Hold it maintained prefer it’s your main residence—it’s an funding, in spite of everything.
You don’t must micromanage, however you do must handle.
Conclusion: Previous, Current, and Future
Previously, you will have believed proudly owning a rental property was a passive revenue dream—till shock repairs, unreliable tenants, and denied claims turned it right into a nightmare. Now, you’re outfitted with a clearer image of what it takes to do it proper—since you’ve seen the 5 commonest and expensive errors landlords make.
The next move? Overview your present properties with this checklist in hand—and repair any gaps earlier than they price you.
And on the subject of defending your funding, your finest wager is working with an area, unbiased insurance coverage dealer who understands the distinctive dangers landlords face.
At Vargas & Vargas Insurance coverageour skilled crew is all the time prepared that will help you discover the best protection on your property and state of affairs.
📞 Name us at 617-298-0655 or 💬 textual content 617-409-0329—we’re right here once you want us.
