Renting out your property: 6 mistakes landlords must avoid

Renting out property is one of the most popular forms of investment in Greece, with thousands of owners relying on monthly rent as a primary or supplementary income. However, leasing a property is not just a matter of "handing over the keys." Without proper preparation, a seemingly secure venture can devolve into a legal nightmare or result in serious financial damage.

In this article, we examine the six most common mistakes landlords make and provide practical advice, legal references, and insights from our experience at Engel & Völkers Greece on how to avoid them.

1. Incomplete or non-existent lease agreements

Perhaps the most critical - and common - mistake is renting without a clear, written lease agreement. Many owners, especially when renting to acquaintances or relatives, rely on verbal "handshake" deals. This practice is risky; without a written contract, there is no proof of each party's obligations.

A comprehensive lease agreement must detail the rent amount, payment method, lease duration, security deposit, maintenance obligations, and rules for property use. Equally critical is the electronic filing of the lease on the AADE platform within 30 days of the start of the tenancy - a requirement many landlords overlook. Late filing or failure to submit results in a €100 fine per declaration and, more importantly, weakens the owner’s legal standing should a dispute arise."

2. Ignorance of the mandatory three-year lease law

A mistake that can trap a landlord in a difficult situation is being unaware of the law regarding minimum lease terms. According to Law 4242/2014, the minimum duration for a residential lease in Greece is three (3) years, regardless of whether the written contract specifies a shorter period. This means that even if you sign a one-year agreement, the tenant has the legal right to remain in the property for the full three years.

This regulation serves as a protective provision for the tenant. A landlord cannot seek an eviction before the three-year mark unless specific grounds exist - such as non-payment of rent or a breach of contract terms. Conversely, the tenant is typically permitted to vacate after the first year, provided they give written notice within a reasonable timeframe. Understanding this legal framework is fundamental for every property owner.

3. Inadequate tenant screening

The rush to "close the deal" quickly leads many landlords to accept the first applicant without any vetting. This practice can prove incredibly costly: a tenant who is unable or unwilling to pay creates a financial loss that far exceeds the cost of leaving the property vacant for a short period.

Proper screening involves requesting pay stubs or tax returns to verify income, as well as employment certificates. 

A useful rule of thumb is that the monthly rent should not exceed 30–35% of the tenant's net monthly income. In some cases, particularly with students or young professionals, requiring a guarantor is a sensible safeguard.

Furthermore, you can request a non-registration certificate from Teiresias, which proves the candidate has no history of bounced checks or defaulted debts. 

While the security deposit (typically equivalent to two months' rent) is essential, it is a supplement to- not a replacement for - thorough screening.

4. Failing to transfer utility bills to the tenant

This is a mistake that is almost always overlooked, despite its severe consequences. If the accounts for electricity (PPC or another provider), water, and natural gas remain in the landlord's name, then the landlord remains legally liable for any unpaid debts.

Specifically regarding water bills, EYDAP debts are attached to the property itself, which can create significant hurdles - even during a future resale. Transferring these accounts is a relatively straightforward process: the tenant simply needs a copy of the lease, their ID, VAT number, and a recent bill showing the supply number. Make sure the transfer is completed within 15–30 days of signing the lease and include a specific clause to this effect in the agreement. Conversely, when a tenant moves out, ensure the bills are transferred back into your name before you return the security deposit.

5. Lack of insurance coverage

Many landlords view home insurance as an unnecessary expense. However, this mindset can prove catastrophic. Greece is located in a seismically active zone, and extreme weather events - such as floods, wildfires, and natural disasters - are very real risks.

Basic building insurance (covering fire, earthquake, and flood) costs approximately €100–€250 per year for an average-sized apartment. A comprehensive multi-risk policy that includes public liability typically ranges from €200–€500 per year, depending on the location, property value, and specific coverage. If you are leasing a furnished property, contents insurance becomes equally critical. Furthermore, there are policies available that cover loss of rent if the property becomes uninhabitable, as well as legal expenses for disputes with tenants. Considering the cost-benefit ratio, insurance is perhaps the most affordable protection you can obtain.

6. Underestimating maintenance costs and tax obligations

The final mistake, yet equally significant, involves an unrealistic assessment of the true cost of leasing. Many landlords calculate only the rental income without accounting for ongoing expenses.

On one hand, property maintenance is a continuous obligation. Minor issues - such as dampness, leaks, or electrical wear - can escalate into expensive repairs if neglected. It is vital to clarify from the start, specifically in writing within the contract, who is responsible for what: as a rule, the owner covers major structural repairs and wear-and-tear from the passage of time, while the tenant handles damage caused by their own use.

On the other hand, rental taxation in Greece is substantial. Rental income is taxed on a progressive scale: 5% on income up to €12,000, 35% for the portion between €12,001 and €35,000, and 45% on any amount exceeding €35,000. In addition to these rates, ENFIA (Property Tax) remains a fixed annual cost. Also, remember that providing an Energy Performance Certificate (EPC/PEA) is mandatory for every new lease, typically costing between €100 and €300.

Why partnering with a real estate advisor makes all the difference

Avoiding the pitfalls mentioned above requires specialized knowledge, time, and experience. This is exactly where a professional real estate advisor becomes your most valuable ally. The expert consultancy at Engel & Völkers does not merely act as a middleman; we guide you through every single stage of the process - from tenant evaluation and selection to drafting the lease and ensuring proper submission to the AADE. We also help you determine a fair market rent based on real-time data and manage any issues that may arise during the tenancy.

For owners of high-value properties, professional management is not a luxury - it is a necessity.

The cost of prevention is always lower than the cost of repair

If you are considering renting out your property or are currently facing management challenges, get in touch with us. Our team is here to support you, combining deep local market expertise with over 45 years of international experience in the real estate sector.