Becoming a landlord can be tricky and there’s much more to it than just cashing that rent check every month to pay the mortgage. These are some of the biggest mistakes a first time landlord can make:

When the math is incorrectly calculated and the cost of maintaining the property is more than expected. At the least, the majority of expenses on the rental should be covered by the rent that you collect each month. If not, you could end up shelling out your own money, and that is not what any landlord wants.

The first thing that you should be doing is to calculate the costs per month on the home, over and above the mortgage. Consider your homeowners insurance rates, and any maintenance costs. Now, take a look at what other homes in your area are renting for that are a similar size and construction type.

In a case where the rent you will receive will not be enough to pay all of the expenses on the home, is this something you can handle?

Some newer landlords don’t use a lease agreement or they use one that is not sufficient, and this can cost them big time. There are certain legal ramifications to being a landlord, so ensure that you are fully protected.

If you rent the unit to someone you know and trust, don’t make the mistake of forgoing a lease agreement.

Your agreement must cover everything that could possibly occur. Is a security deposit clause included? Did you remember to state the advance notice that your tenant must give you before moving out?

Some landlords forget to take photographs or an inventory of the rental. You don’t want to have an argument with the tenant as they are leaving about damage that they say was there before they moved in. Unfortunately, this is a common practice by bad tenants. Go through the entire home and take a significant amount of photographs to protect yourself later if you need to prove that the damage after tenants move out was not there before they moved in.

Having insufficient insurance on a home happens all too often. The likelihood is that you have a basic home insurance policy on the property that covers your possessions inside the home from loss or damages.

Before you switch your property into a rental, it’s essential to update your home insurance policy to a landlord or dwelling version that doesn’t protect the contents inside the unit. The tenants who are residing on your property must purchase their own renter’s insurance if they want their possessions to be protected.

You need to take the time to know who your tenants are. Of course you will want your property to be occupied by tenants, but don’t be too quick to accept any tenant who shows up. Even the nicest looking people can be less than desirable tenants.

If a tenant seems acceptable to you, get them to fill out your rental application form and then check their employment references and their credit history. Previous landlords should be contacted in order to find out how the applicant behaves as a tenant. You might just find out that your tenant-to-be has a bad habit of paying rent late regularly.

We offer the only Whitby home insurance policy that can be truly tailored to your needs. Get a quote and buy a policy online or by phone. Or check out our Home Insurance video.