Updated: Mar 24, 2020
Becoming a landlord can be a tricky business – and it’s only natural for many to make some mistakes along the way.
It may sound easy to be a landlord at first. From buying a home to making a few renovations and finally leasing it out. In reality, to successfully manage your own investment properties requires the mindset of a business professional.
So there's a lot to think about before one can be an astute landlord. Knowing and avoiding all the the common mistakes can save you lots of frustrations, and hopefully not burn a hole in your pocket.
Learn from the mistakes of others. You can't live long enough to make them all yourself. - Eleanor Roosevelt
The mistakes can be categorised into 4 main areas :
This is a two-part article. In this Part 1, which we shall look in the "FINANCIALS" and "LEGAL" type of mistakes. While in Part 2 later, we shall look in the "MANAGEMENT" and "MARKETING" types of mistakes.
(1) NOT HAVING THE RIGHT INSURANCE
Home Protection Insurance is something that a lot of Landlords tend overlook. This is because they assumed that the insurance policy that is taken up with their home loan automatically insures the content in their property.
This is grossly misunderstood because that is actually a Fire Insurance Policy instead. Such fire insurance policies have limited coverage on the personal belonging and persons only in the case of a fire.