Top 7 Mistakes First-Time Landlords Make (and How to Avoid Them)

So, you’re thinking about renting out a property, or maybe you’ve already taken the leap and become a landlord. Exciting, right? You’re stepping into a role that can bring in steady income and even long-term wealth. But let’s be honest, it’s not as easy as it looks on TV.

Being a landlord is a mix of business savvy, people skills, and a healthy dose of patience. And if you’re just starting out, there’s a good chance you’re going to stumble into a few potholes. But hey, that’s why you’re here. Let’s walk through some of the most common mistakes first-time landlords make, and more importantly, how to avoid them like a pro.

1. Not Having a Solid Lease Agreement

Let’s kick things off with the lease. Sounds boring? Maybe. But it’s absolutely crucial.

Some first-timers rely on handshake deals or download a one-size-fits-all lease they found online. The problem? Every state, and often every city, has its own laws about rentals. If your lease isn’t tailored to those rules, you could find yourself in hot water fast.

Think of your lease as the rulebook. It should clearly spell out everything, rent due dates, late fees, pet policies, who handles what repairs, and what happens if someone breaks the rules. Don’t assume anything. Put it in writing.

Better yet, consider having a local attorney review your lease template, especially for your first few tenants. It’s a small upfront cost that can save you a major headache down the line.

2. Skipping Tenant Screening (Big Mistake)

Let’s talk tenants. You might feel tempted to go with the first person who shows interest and can cover the deposit. After all, an empty unit doesn’t pay the bills, right?

But rushing this step is one of the fastest ways to lose money. Bad tenants can cause property damage, pay rent late (or not at all), and stir up drama with neighbors. Evictions are expensive, not just in dollars, but in time and stress.

So what’s the move? Screen every applicant thoroughly. We’re talking credit checks, criminal background, rental history, employment verification, the works. If this sounds like a hassle, don’t worry. These days, using a professional tenant screening service can help landlords identify reliable renters and avoid costly evictions down the line. It’s fast, efficient, and worth every penny.

Remember, good tenants make your job easier. Take the time to find them.

3. Underestimating Maintenance and Repair Costs

This one’s a biggie. You’d be surprised how many landlords forget to budget for the “what-ifs.”

Toilets clog. HVAC units break down. Roofs leak, usually at the worst possible time. If you’re not financially prepared, these things can hit you hard. And delaying repairs? That’s only going to frustrate your tenants and put your property at risk.

Here’s a simple rule: Set aside 1% of the property’s value each year for maintenance. So if your rental is worth $200,000, plan to save at least $2,000 annually for upkeep. Some years you won’t need all of it. Other years… well, you’ll be glad it’s there.

And don’t forget routine maintenance, cleaning gutters, servicing the furnace, and checking for leaks. It might seem tedious, but these little things prevent big problems later.

4. Ignoring Local Laws and Regulations

Okay, nobody likes reading legalese. But knowing your local landlord-tenant laws isn’t optional; it’s a must.

Different states (and cities) have rules about how much notice you need to give before entering the property, how security deposits should be handled, and how evictions must be carried out. Mess this up, and you could be facing fines or lawsuits.

Not sure where to start? Your city’s housing department or local landlord association is a great place to get up to speed. Even better, connect with a real estate attorney who can answer questions when things get murky.

A little legal know-how goes a long way.

5. Poor Communication with Tenants

Here’s something a lot of new landlords overlook: your relationship with your tenants matters.

We’re not saying you need to be best buds. But setting clear expectations and staying professional can prevent 90% of the problems you’ll face. Respond to maintenance requests promptly. Send notices in writing. Keep conversations polite and documented, especially when it comes to disputes or rule violations.

Don’t leave room for confusion. That “Oh, I thought rent was due on the 10th?” conversation is a lot less likely if you’ve been crystal clear from the start.

Pro tip: Use a property management platform or even just email to keep records of all communication. If things ever go south, you’ll be glad to have a paper trail.

6. Setting the Wrong Rent Price

It’s tempting to price your rental high and try to “maximize profit.” But if your rent is above market value, you’ll likely struggle to keep tenants—or even find them in the first place.

On the flip side, underpricing your unit might get it filled quickly, but you’re leaving money on the table every single month.

So what’s the sweet spot?

Do some homework. Check rental listings in your area for similar properties. Use online tools like Zillow’s Rent Zestimate, or talk to a local agent. Factor in amenities, square footage, location, and condition. Don’t guess—know your market.

Also, be flexible. If you’ve had zero applications in three weeks, that’s a sign your price might be too high. Listen to the market, it’ll tell you everything you need to know.

7. Treating the Property Like a Hobby

This one might hit close to home.

A lot of first-time landlords treat their rental like a side hustle they manage on weekends. And while that can work for a while, it’s not a long-term strategy. You’re running a business, whether it’s one unit or ten.

That means bookkeeping. It means tracking income and expenses for taxes. It means setting policies and sticking to them. And yes, sometimes it means making tough calls, like enforcing late fees or deciding to renew a lease.

Want to make life easier? Create systems. Use accounting software. Set up a separate bank account for your rental. Keep receipts. Stay organized.

Eventually, as you grow, you may even want to hire a property manager. It’s all about shifting your mindset from “extra cash” to “long-term investment.”

Final Thoughts: Learn, Grow, Repeat

Whew, that’s a lot, right?

But don’t worry. You don’t have to get everything perfect on day one. Every experienced landlord out there has made at least one of these mistakes, probably more than once. The key is to learn from those missteps and keep improving.

Ask yourself: Which of these areas do I need to focus on first? What systems can I put in place this week to get ahead? Who can I reach out to for help?

The more seriously you take your role, the more smoothly things will run—and the more profitable your rental business will become.

And who knows? A year from now, you might just be the one giving advice to a brand-new landlord, telling them how you made it work.

Here’s to fewer mistakes and smarter moves ahead.