Eight mistakes new landlords make

New landlords most often pay dearly for eight mistakes. They set the rent from other owners' listings and pick the tenant on impression. They sign an agreement that says nothing about repairs and take a deposit with no written terms. They hand over the property without a furniture inventory, accept rent in cash, leave the income undeclared and wait when the rent is late. Most of these happen in the first weeks and are paid for only at the end of the tenancy. For each one you will find where it happens, when it starts to cost money and which document prevents it. The whole topic is covered in the complete guide to managing a rental property.

1. Rent copied from other owners' listings

Listings show what owners are asking, not what tenants end up signing for. Rent copied from them often starts too high, and the property sits empty.

An empty month costs money too. You keep paying the building fees, the bills that cannot be switched off and the mortgage instalment, if there is one. A slightly lower rent that lets the flat at the first viewings can bring in more than a higher one that lets it a month later. How to arrive at a realistic price is covered in the article on pricing a rental apartment.

Before you publish the listing, decide when you will revisit the price:

• If the first viewings do not produce an applicant you would accept, lower the price before you rewrite the listing or reshoot the photos.
• If there are plenty of viewings but applicants drop out after reading the terms of the agreement, the problem is the terms, not the price.

Record the date of the listing, every viewing and the reason each interested applicant gave for dropping out. With those notes, the pricing decision rests on facts rather than instinct.

2. A tenant chosen on first impression

If you pick a tenant by how they came across at the viewing, there is no way to check the decision later. The criteria need to be ready before the first applicant walks through the door.

Write down three or four things you will check, and apply them equally to every applicant:

• a source of income that covers the rent;
• a reference from a previous landlord, if there was one;
• how many people will live in the flat;
• when the applicant wants to move in.

Ask only for what those checks require. Copies of ID cards, payslips and bank statements are personal data under the GDPR. Keep them after the decision and you take on responsibility for them with nothing to gain. For what exactly a private landlord may request and retain, see the guidance of the Bulgarian Commission for Personal Data Protection.

Keep the written criteria and a short note of which applicant met which criterion, not the documents themselves. If a reference and what the applicant told you do not match, pay attention to the mismatch.

3. An agreement that does not say who pays for repairs

Many disputes between landlord and tenant start with a question the agreement does not answer: who pays when something breaks, when a bill arrives or when the building association collects a fee.

Test any rental agreement template with three questions:

1. Who pays for repairs after normal use, and who pays for damage?
2. Which bills and fees does the tenant cover, and which stay with the owner?
3. What happens with an urgent repair if the owner does not respond?

It often comes down to the difference between normal wear and damage. A hinge loosened by years of use is wear. A door torn off its hinges is damage. Write into the agreement that the owner covers wear and the tenant is responsible for damage they cause. List the appliances whose upkeep falls to the tenant as well.

For urgent repairs, the agreement should name one contact person and a response time. If the time runs out with no answer, the tenant may call a tradesperson up to an agreed amount and deduct it from the rent against a receipt. Without such a clause, a burst pipe on a Saturday turns into an argument about who should have acted.

4. A deposit with no written return terms

The deposit clause decides whether the end of the tenancy takes a day or ends in a dispute. It needs four things in writing: the amount, what the deposit covers, how a deduction is proven and when the balance is returned.

The deposit can cover unpaid rent, unpaid bills and damage beyond normal wear. A deduction is proven with the inventory from point 5 and a receipt or quote for each repair. The balance is returned within a set number of days after the tenant hands back the keys and pays the final bills. Whether the law caps the amount or the return period is something to settle with a lawyer before you write in the numbers.

Give the tenant a written receipt for the deposit and keep it separate from the rent, so there is no doubt about what you owe back.

Do not let the deposit turn into the last month's rent. If the tenant offsets it, you lose your protection right before the final inspection. Agree to such an offset only in writing, after the inspection and only if the agreement allows it.

5. Handing over the property without an inventory

Without an inventory signed at handover, the owner has nothing to compare the property against at move-out, and every damage claim becomes one person's word against another's.

At handover, walk through the property room by room with the tenant and record:

1. every piece of furniture and every appliance, and its condition;
2. marks, scratches and defects on walls, floors, doors and windows;
3. the readings on the electricity, water and heat meters;
4. how many keys you handed over.

Photograph every room and every defect and keep the files with their dates. Both parties sign the inventory and each keeps a copy. What to include is covered in detail in the article on the furniture inventory.

At move-out, go through the same list. A defect recorded at handover is not new. The one missing from the list is the one that needs explaining.

If the tenant refuses to sign, note the refusal. Send them the inventory and photos in writing the same day and give them a deadline for comments.

6. Cash payments and agreements made over the phone

Rent paid in cash and changes agreed over the phone leave no trace. If the two sides later remember a payment or a promise differently, neither can prove their version.

Take rent by bank transfer, with a payment reference that names the property and the month. Whatever you agree by phone (a repair, a late payment, a new flatmate), put it in a short written message the same day and ask for confirmation. The message is the evidence, not the call.

Keep one folder per property: the agreement, the inventory, the photos, the payment confirmations and the written messages. When documents are scattered between a phone, an inbox and a paper folder, the owner struggles to answer even a simple question from an accountant or the tenant.

That is exactly what the platform for owners is built for: it keeps the information on properties, tenants, agreements and payments in one place.

7. Undeclared rental income

Undeclared rental income is a problem that grows over time: the longer it goes on, the more there is to put right when it comes to light.

Rental income received by a private owner has to be declared. How it is taxed and when the return is due are questions to settle with an accountant before the first payment arrives, not at the end of the year.

Whatever the rules require in a given year, the return rests on two documents. The agreement shows the agreed rent and term. The payment confirmations from point 6 show what you actually received. Cash payments without a receipt make the declared amount impossible to prove.

If an agency collects the rent, ask your accountant whether that changes who declares the income and in what amount. Keep the agency's statements together with the payment confirmations.

8. Waiting after the first missed rent payment

React at the first missed payment, and do it in writing. Every month of delay grows the debt and narrows your options.

Follow a sequence decided in advance:

1. A few days after the due date, send a written reminder with the amount owed and the date it should have arrived.
2. Talk to the tenant to find out whether the problem is temporary.
3. If the tenant offers a payment plan, record the amounts and dates in a document signed by both parties.
4. If the plan is not kept, send a formal written notice under the terms of the agreement.
5. Get legal advice before any step towards ending the agreement.

Do not change the locks, remove the tenant's belongings or cut off electricity, water or heating to force payment. Ask a lawyer how the agreement is lawfully ended and how you get the property back.

If the tenant stops responding, the written trail of every step is the first thing the lawyer will ask for.

Which mistakes can be fixed after move-in?

Mistakes with documents and payments can be fixed during the tenancy. Mistakes in the agreement and at handover usually cannot be fixed without the tenant's consent, which is why the first week of the tenancy matters most.

For each mistake: when it happens, when it starts to cost money and whether it can be fixed after move-in:

1. Rent from other owners' listings. Happens at the listing, costs money in the first empty month, fixed at the next letting.
2. Tenant chosen on impression. Happens at the viewings, costs money during the tenancy, cannot be fixed.
3. Agreement without a cost split. Happens at signing, costs money at the first repair, fixed only by a written addendum signed by both parties.
4. Deposit without terms. Happens at signing, costs money at move-out, fixed only by a written addendum signed by both parties.
5. No inventory. Happens at handover, costs money at move-out, partly fixable: an inventory dated today helps, but older damage stays unprovable.
6. Cash payments and verbal agreements. Happen during the tenancy, cost money in every dispute, fixed from the next payment.
7. Undeclared income. Happens at the first payment, costs money when it comes to light, fixed with an accountant.
8. Waiting on unpaid rent. Happens at the first missed payment, costs money as the debt builds, fixable today.

If the property is already let, start with mistakes 6, 7 and 8, which can be fixed this week. Raise 3 and 4 at the next renewal of the agreement.