Investing in your first rental property is a major milestone. It’s an exciting step toward passive income, portfolio growth, and long-term wealth but it’s also easy to make costly mistakes early on.
At Geotane, we work with new landlords across Carmel, Westfield, and surrounding areas every week. Whether you’re just closing on your first investment property or already managing it solo, these are three of the most common rookie mistakes to avoid and what to do instead.
1. Underestimating the Real Costs of Ownership
Many first-time landlords look at the rent minus mortgage and assume they’ve got cash flow. Unfortunately, that’s rarely the full picture.
Vacancy periods, emergency repairs, property taxes, insurance, and even lawn care add up. Most experts recommend setting aside at least 15%–20% of monthly rent for maintenance, vacancies, and unexpected expenses.
According to data from the National Association of Realtors, operating expenses can average 35%–45% of your rental income annually. That means a $1,500/month rental could carry $500–$675/month in operating costs.
And that’s not counting capital expenses like replacing a roof, HVAC, or major appliances—those big-ticket items sneak up fast.
How to avoid this mistake:
Create a rental pro forma that includes all potential expenses before you buy. Use tools like Stessa to track actual cash flow and adjust your pricing accordingly.
2. Using a Generic Lease (Or No Lease at All)
We get it—when you’re just starting out, grabbing a lease template online feels like a quick win. But a vague or outdated lease can cause major problems, from unclear responsibilities to legal vulnerabilities.
Every market has unique rules about what landlords can charge, how security deposits are handled, and what’s required when ending a lease. In Indiana, for instance, laws around notice periods, habitability, and small claims disputes are specific—and a generic lease won’t cover those nuances.
A professional lease should include:
- Precise rent terms and late fee policies
- Maintenance responsibilities (especially filters, lawn care, pest prevention)
- Pet clauses and occupancy limits
- Renewal terms and how notices must be delivered
Want to stay protected? Avoid DIY risk and use a property management partner or local attorney who ensures your lease complies with Indiana’s landlord-tenant laws.
3. Trying to DIY Your Way to Profit
Managing your own rental may seem easy at first—especially if it’s nearby and newly renovated. But most first-time landlords don’t anticipate:
- Late-night maintenance calls
- Screening applicants thoroughly
- Keeping accurate books for taxes
- Tenant disputes or late payments
- Coordinating vendors for repairs
By the second or third issue, burnout often kicks in.
This is where working with a local, full-service property manager becomes a game-changer. A company like Geotane handles everything from marketing to lease signing, rent collection, maintenance, reporting, and even eviction protection if needed.
What makes it worth it?
You gain time, consistency, and peace of mind—plus optimized rent pricing and higher tenant retention. If you’re serious about real estate as a long-term investment, outsourcing management is one of the most cost-effective decisions you can make.
Bonus: Overlooking the Tech & Tools
Modern landlords benefit from systems that simplify everything. Using tech platforms for rent collection, maintenance tracking, and document storage isn’t just convenient—it builds a paper trail that protects your investment and taxes.
At Geotane, we provide owners with a real-time portal for full transparency into performance, maintenance updates, financials, and more—without the stress.
Final Thoughts: First Rental ≠ First Regret
Buying a rental property doesn’t mean you have to learn the hard way. With smart planning, local support, and a management team that’s seen it all, you can start off strong—and scale up faster.
🔎 Curious if your rental is performing like it should?
We offer Rental Performance Reviews to help new investors understand where they stand—and how to optimize. You’ll walk away with clarity, not guesswork.
📲 Book a consultation
🌐 Visit www.geotanemgt.com for full services
