Many individuals have entered the field of rental property management as a way to shore up their income. Here are 5 Common Mistakes.

2. Using a makeshift lease agreement. These agreements are easy to find on the Internet—maybe too easy. If the agreement isn’t thorough, or if it doesn’t include sections that are required by your state law, you’re leaving yourself exposed.

 Residential leases in Pennsylvania must be approved by the Pennsylvania Attorney General as "Plain English Leases". If a residential lease is not "Plain English" and approved, the lease is voidable by the tenant.

3. Not depositing the security deposit in a proper escrow account. The proper place for the money isn’t with the owner. In most states, the trust account money must be in a separate property management trust account and not in the broker’s general sales trust account.

In Pennsylvania, co-mingling personal or brokerage funds with security deposits is a NO-NO!

4. Not having the tenant sign a move-in and move-out form. This form would include a property condition disclosure. Without it, you have little recourse if a unit is damaged beyond the usual wear and tear.

In addition to forms, I recommend taking photographs of the leased space before and after occupancy.

5. Trying to incorporate a lease-purchase arrangement into the lease agreement. There’s nothing wrong with doing this, but it’s complicated, and if it’s not done properly, you could invite trouble. For instance, you could have a difficult time evicting the tenant for nonpayment of rent if the court looks at the arrangement as a purchase agreement.

The buyers mortgage companies will have specific rules regarding lease purchases. Speak to the  buyers lender before structuring anything.

For additional information regarding leasing property in Philadelphia please visit  Landlord Essentials