Tampa real estate investors can often be afraid of making mistakes. It’s scary to fail because there’s no playbook that tells you when you’re going to fail and what you should do when things go wrong. Once you’ve made a mistake, it can be difficult to find a way back from that error, especially if it’s a large error or an expensive problem to fix.
Small failures can be just as damaging as big ones. Today, we want to talk about the common mistakes that Tampa investors often make. Everyone has their own stories about what went wrong and how they recovered. If you’re wondering why investors fail in the Tampa rental market, it may be due to one of these common errors. Property management companies in Tampa can and should be able to help you as a property owner avoid these mistakes.
Placing the Wrong Resident in Your Tampa Rental Property
People will sometimes be in a hurry to fill their vacancy or they won’t be sure about how to properly screen an application, and they’ll place the wrong resident. This is the number one failure with investors in Tampa. When you rent out a home, your cash flow is critical. You need your residents to pay rent, and you need them to help you take care of the property.
If you don’t have a great resident, a lot can go wrong really fast. You want to avoid that mistake with a solid marketing and screening process. Make sure you’re using a thorough and consistent application, and check the credit history and an eviction history. Talk to previous landlord about their rental experience with the applicant, and make sure you verify employment and income. You don’t want to rely on a pay stub that anyone can print. Call the employers and make sure the applicants are still working there and earning the income they say they’re earning.
Look for felonies and a history of violent crimes. You want to judge their character as well as their financials; an applicant who has had physical fights with former landlords is probably not going to be a great resident.It’s amazing the turmoil you can have in your life when you place the wrong resident. When you place the right resident, everything feels normal and natural. Your entire rental and investment experience starts and stops with the resident you choose.
You want to try and evict your residents before you put them in your property. This will save you a lot of time, money, and frustration later on. There are also fair housing and discrimination laws to follow. In Oakland, landlords cannot run criminal background checks on their applicants anymore. Tampa has its own sets of laws, regulations, and best practices when it comes to screening residents.Think carefully about who you place in your property. With the wrong resident living in your investment home, you’re going to be paying for that mistake for a long time.
Buying the Wrong Investment Property
It’s easy to get excited about an investment property, but if it’s a property that’s going to make you house-broke, that’s a huge mistake. You want to do the math and respect the numbers so that you’re sure you’re buying an investment that will make you money. If your rent doesn’t cover your expenses or you’ve bought a beautiful property and invested extra money into it but you can’t find a resident willing to pay what you’re asking – that’s a mistake.
You need to buy right. Look for a strong cash flow. Most investors in the Tampa area can earn at least $300 a month in cash flow. More would be even better, but if you can reach the $300 per month threshold, you know you’ve avoided one of the most expensive mistakes that investors make.
A lot of investors will try to make the numbers fit any deal they want to close. Don’t try too hard to massage things to make them work. You don’t want to hope you’ll get more rent and you don’t want to take a chance that maintenance will cost nothing. When you’re looking at the numbers and the historical data, remember those statistics are there for a reason. Don’t read between the lines. Your decision should be black or white.
Professional Tampa Property Management
You need the right property management company, otherwise your mistakes will be especially difficult to manage. Look for a professional who really knows their stuff. You should be able to rely on your property manager’s advice on what to do and what not to do.
At Mynd, we offer resources and support even before you buy a property. If you ask us what we think about a property you’re considering, we will take a look at it and whether we think it can earn you the amount of money you’re hoping it will earn. We talk through your options and we provide reports and analyses that can help you make an educated decision.
If you decide to buy, we will lease and manage and maintain the home, all with your investment goals in mind.
The right property manager helps you avoid costly and common mistakes. It’s the engine pushing your train down the track. When you buy a rental property in Tampa, you’re buying four walls and a roof. The business you’re running inside those walls depends on a good property management resource.
If you’d like to learn more about how to avoid expensive mistakes with your Tampa investment property, please contact us at Mynd Property Management.
We also have other opportunities to connect with us and learn more about investing in Tampa. You can also visit our Facebook group of investors, which is called Master Mynd. It’s a real estate investors’ club, where you can exchange ideas with other owners. Check out our weekly podcast as well, called The Myndful Investor. We invite leaders in real estate and property management to talk about their success and, more importantly, their failures. There’s a lot to learn from this relatable content.