(And Exactly How to Avoid Them Before You Even Buy Your First Rental)
Stepping into landlording sounds exciting — passive income, building wealth, being your own boss. The reality? One rookie mistake can wipe out a full year of profit (or land you in court).
Here’s the exact list of the most expensive first-time landlord mistakes I constantly see — plus the dead-simple, mostly-free fixes that pros use from day one.
1. Using a Generic or Old Lease (Biggest Legal Mistake)
A lease you downloaded in 2015 or copied from a forum can get thrown out entirely in court because it’s missing required disclosures or has illegal clauses. Fix: Always use a current, state-specific lease generator that automatically adds lead-paint notices, bed-bug addendums, security-deposit rules, etc. The best ones are 100% free and take five minutes.
2. Skipping Proper Tenant Screening (or “Trusting Your Gut”)
Renting to the first person who can pay because the unit’s been vacant two weeks is how you meet your nightmare tenant. Fix: Require every adult applicant to run a full credit, criminal, and eviction report (eviction) report through services where they pay the $35–$45 fee themselves. Call the last two landlords. Never skip this step — ever.
3. Setting Rent by “What You Feel Like Charging”
Too high → vacancy eats your profit. Too low → you leave thousands on the table every year. Fix: Pull 10–15 comps from Zillow, Apartments.com, and RentCast, average them, then price 3–5% below the hottest comparable. Units rent in days instead of weeks and you get better tenants.
4. Paying for Expensive Software Too Early
Spending $60–$300+/month on Buildium or AppFolio when you have 1–3 units is lighting money on fire. Fix: Use completely free tools for listing (Zillow, Facebook Marketplace), rent collection (Zelle/Venmo/Cash App), e-signatures (Dropbox Sign free tier), and screening (SmartMove applicant-paid). Add one ultra-low-cost flat-fee dashboard only when the free-tool juggling gets annoying — usually around 5–7 units.
5. Holding Security Deposits in Your Regular Checking Account
In many states that’s illegal and you can owe the tenant 2–3× the deposit as penalty. Fix: Open a separate landlord savings account the day you take the first deposit. Track every dollar and photo-document move-in/move-out condition.
6. Trying to Collect Rent with Paper Checks Forever
Checks bounce, get lost in mail, and give tenants built-in “I mailed it” excuses. Fix: Require electronic payment from month one (Zelle is free and instant for both parties). Put it in the lease. 95% of tenants are already doing it anyway.
7. Ignoring Small Maintenance Requests
The $150 dripping faucet you ignore becomes the $4,000 water-damage claim six months later. Fix: Respond to every maintenance request in writing within 24–48 hours. Keep a simple log (even a Google Sheet at first) with dates, photos, and resolutions.
8. Raising Rent Randomly or Emotionally
Tenants leave, you lose $2,500–$5,000 in turnover costs, and you start the screening nightmare again. Fix: Give generous notice (90+ days), keep increases modest and predictable (3–7% most years), and tie them to real improvements or market data. Great tenants stay 5–10 years.
9. Doing Everything Manually in Notebooks and Email
When you hit 4–5 units you’ll drown in random texts, forgotten renewal dates, and “Did they pay?” questions. Fix: Start with free/low-cost tools from the beginning. One inexpensive annual subscription that centralizes tenants, payments, maintenance, and documents pays for itself in the first month you don’t lose a security-deposit dispute or miss a late fee.
The First-Time Landlord Success Formula
- Free state-specific lease
- Applicant-paid professional screening
- Free listing sites + killer photos
- Free electronic rent collection
- One cheap, simple dashboard when you’re ready
Follow this and your first year will be profitable and relatively drama-free instead of the horror story you read about online.
You’ve got this — just avoid these nine mistakes and you’ll be ahead of 90% of new landlords on day one.
