1. Understand landlord tenant laws:
You must have an adequate knowledge of your local, state, and federal landlord tenant laws. One of the most important federal laws that landlords should be aware of is the laws dealing with national origin, sex, color, race, disability, and familial status which is also knows as Fair Housing.
2. Economic Downturn
In an economic downturn, good tenants could lose their jobs and be unable to pay rent. You may be forced to lower your rate, which could leave you with a negative cash flow.
3. Don't Over Improve
Over-Improving is putting more money into the house than what you would get out when you sell or rent. The location of the home, square footage and nearby comparable sales all dictate how much the house is worth.