If you have watched our other videos, you know that not properly screening tenants is one of the biggest mistakes housing providers make. Complete your due diligence and run a detailed credit and background check. More importantly, make sure you use the same process for every single applicant. If you don’t do that, you’ll find yourself in hot water.
Renting to a Friend
Another huge mistake is not making smart improvements. For example, a lot of housing providers will get excited about buying rental property with a swimming pool. That’s not a wise improvement or amenity. Not only does it add an extra expense which will cut into your cash on cash return, you’ll also have a lot more liability at your property. What if tenant’s child drowns?
If you think you’re not responsible, remember this is California and you need to protect yourself. Housing providers will install granite countertops and expect an extra $200 in rent per month. The rental market doesn’t think that way. The only things you should consider are the durability of the improvement and whether it will help you collect a higher rent every month.
Some housing providers will serve a Three Day Notice and hope it was served correctly. However, if you accept a partial payment after serving that Notice, the eviction process stops. You have to start all over again. We aren’t saying you shouldn’t take partial payments; you just need to know the ramifications.