Key Takeaways
- Renting to family or friends, and skipping tenant screening, are two of the fastest ways a self-managing landlord can end up in a bad situation.
- Credit history and prior rental history are among the most predictive factors of tenant success, but both can be difficult for a self-managing landlord to verify.
- An Arizona-compliant lease, consistent enforcement, and fair housing compliance protect landlords from unnecessary legal and financial risk.
- Maintaining the property and documenting its condition before move-in are essential to protecting property value and tenant retention.
- Treating the rental as a business, rather than a personal favor, is the mindset shift that ties all of these lessons together.
Are you currently managing your own single-family rental and want to make sure you don't make a big mistake? Or are you thinking about self-managing a rental property for the first time? Either way, you're in the right place.
The team at Blue Fox Properties has specialized in managing single-family rentals in Tucson, Arizona since 2009. Over the years, we've seen self-managing landlords run into the same handful of problems again and again. Below are the seven most common landlord mistakes, along with what to do instead.
Mistake #1: Renting to Family or Friends
Renting to someone you already know can feel like the easy choice, but it often creates a bad business relationship from the start. Each party tends to think they're doing the other a favor. The tenant feels they've saved the landlord the trouble of finding a good tenant, and of course, they see themselves as that good tenant. Meanwhile, the landlord feels they've done the tenant a favor by offering a nice home at what they consider a discounted rate.
The trouble is that knowing someone personally doesn't mean you know them from a financial risk perspective. Without an objective screening process, you're taking on risk you can't fully evaluate, and if the relationship sours, it can damage both the tenancy and the personal relationship.
Mistake #2: Not Screening the Tenant
According to TransUnion, credit history and rental history are among the strongest predictors of tenant success, and a rental-specific credit score can identify meaningfully more risk than a traditional credit score alone. That makes both factors worth including in your screening process, even though they can be difficult for a self-managing landlord to obtain.
Most self-managing landlords can't pull a standalone credit score directly, so it typically shows up embedded in a broader screening report. Prior rental history can be just as hard to come by. Many previous landlords, whether private individuals, apartment communities, or other property management companies, simply won't provide it. In some cases, there's no meaningful history to find at all, such as with a first-time renter entering the market, or a tenant coming back to renting after owning a home for the past 20 years.
Two Rental History Sources to Be Cautious Of
- A glowing reference from a private landlord's most recent rental: some landlords will offer a rosy report simply to get a problem tenant to move on.
- A recommendation from a tenant's real estate agent selling their current home: an agent has no incentive to disclose that their seller-client was several mortgage payments behind or that the home was in poor condition.
In addition to credit and rental history, we recommend validating income. In today's market, gross monthly income of roughly three times the monthly rent is a reasonable benchmark. You may also want to add other criteria, such as smoking restrictions or limits on certain criminal history. Whatever criteria you use, make sure your process complies fully with fair housing law and does not discriminate against a person in a protected class.
Federal Fair Housing Act protections cover race, color, religion, sex, national origin, familial status, and disability, and many states and cities add further protected classes. Following these rules isn't just a legal safeguard, it's good business.
Mistake #3: Not Having an Arizona-Compliant Lease
Under the Arizona Tenantial Landlord and Tenant Act, landlords aren't legally required to have a written lease for a tenancy of less than 12 months. But skipping a written lease sets you up for failure and adds unnecessary risk to the tenancy.
Avoid using a generic lease template pulled from a general search online or picked up at an office supply store. It's worth spending a couple hundred dollars on a lease drafted by an Arizona attorney who specializes in residential landlord/tenant law. Some attorneys also offer a free standard lease on their website, which can be a reasonable starting point, since it complies with Arizona law, though you'll likely want to build on it.
Mistake #4: Not Enforcing the Lease
A lease you don't enforce is effectively no lease at all. Consistent enforcement is what establishes the landlord-tenant relationship as a professional one, with clear mutual expectations and responsibilities on both sides.
Mistake #5: Not Maintaining the Property
Property maintenance is one of the biggest factors influencing whether a tenant renews their lease. Turnovers are costly, so avoiding them whenever possible should be a priority. Staying on top of maintenance also protects your property's long-term value and helps attract your next quality tenant when a turnover does happen.
Mistake #6: Not Documenting the Property's Initial Condition
To hold a tenant responsible for damage caused during their tenancy, you first need to establish a clear baseline of the property's condition before they move in. In today's environment, that means thorough photo and/or video documentation, uploaded somewhere that is timestamped, such as Google Drive, Dropbox, or ShareFile.
Without that documentation, it's very difficult to prove the property's original condition and hold a tenant financially responsible if a dispute ends up in court. In the current legal environment, courts tend to side with the tenant when documentation is missing or incomplete.
Mistake #7: Not Treating the Rental Like a Business
If you once lived in the property and thought of it as your home, it's time to let that go. The moment you decide to rent it out, it becomes a business. Detaching your emotions from the property is essential, otherwise, you risk making costly decisions based on sentiment rather than sound business judgment.
In a Nutshell: Avoiding the Most Common Landlord Mistakes
Most landlord mistakes come down to the same root cause: treating a rental property like a personal relationship instead of a business. Renting to friends or family without screening, skipping a proper Arizona lease, letting enforcement slide, deferring maintenance, and failing to document the property's condition can each create real financial and legal exposure.
The good news is that every one of these mistakes is avoidable with the right process, and you don't have to figure it out alone. Visit our website to see if we might be a fit to manage your rental house.
