Are you managing your rental property like a professional?
If you aren’t collecting the maximum income or you’re seeing high tenant turnover, it’s likely you aren’t doing an excellent job managing the property.
It’s understandable that between screening tenants and making repairs to the property, the job of a landlord can be overwhelming. What’s more, most landlords don’t have a property management strategy.
If you’re still learning the ropes, be sure to avoid the following common property management mistakes.
1. Underestimating Your Property Management Workload
As a first-time or inexperienced landlord, you might think that managing a property is an easy job. After all, what’s difficult about admitting tenants into a property and showing up once every month to collect rent?
Well, you’re mistaken.
As an experienced property management company like Emperor Management can tell you, property management is a full-time job. Whether you own one unit or a multi-unit establishment, expect to be on property management duties every day. A tenant could raise a complaint at any time, for example.
As such, don’t go into owning rental property thinking you’ll just be sitting at home enjoying the perks of being a landlord. Proper property management requires your time and effort.
2. Failing to Screen New Tenants
Phew! You’ve finally secured your first rental property. Whether you built it from scratch or bought it already built, the process is grueling. Now all you want is to get tenants and start collecting the rent.
It’s not uncommon to find landlords, even seasoned ones, taking in new tenants without conducting any screening. In fact, close to 40 percent of landlords don’t typically do any criminal background or credit checks.
That’s a big mistake.
Skimping on tenant screening is a sure way to end up with bad tenants. These are tenants who’re perpetually late with their rent payments or don’t even pay at all.
The tenant screening process weeds out the tenants who don’t meet the criteria you’ve set. This way, you give yourself the best chance of getting tenants who will make your work lighter.
If you’re finding the screening job too laborious, invest in property management software that can help with tenant screening.
3. Not Familiarizing Yourself with Housing Laws
Although you have certain rights as a landlord, there are housing laws you must abide by. For example, the Fair Housing Act protects tenants from discrimination because of their race, color, gender, religion, national origin, or disability.
This law especially puts landlords who conduct tenant screenings in a zone of potential liability. Yes, you have a right to screen tenants, but there are limits. If a tenant feels you acted in a discriminatory manner, they can sue you.
If you’re not familiar with all the relevant laws, you can unknowingly find yourself in trouble.
The last thing you want is to be dealing with legal complaints and lawsuits. This will cost you time and money. Even if you’re innocent, you might still need to hire a lawyer to defend you.
4. Not Doing Regular Property Inspections
Are you the kind of tenant who waits until a tenant reports property damage before springing into action?
If yes, you aren’t doing yourself any favors. First, your tenants will lose confidence in your ability to guarantee a safe and healthy environment. Second, it can give tenants grounds to file a lawsuit against you.
To be on the safe side, schedule regular property inspections. And, no, inspecting the property yourself doesn’t count, unless you’re a qualified property inspector. You’ll easily miss preventable issues that will later morph into serious repair problems.
If possible, contract a property inspection company to perform at least two inspections a year. They’ll notify you of any issues that need immediate attention.
5. DIY Property Repairs
You can do DIY repairs on your residence, but when it comes to a rental property, leave it to the professionals.
Of course, saving money is the main motivation for DIY repair. And you might as well have enough experience to make minor repairs.
However, your tenants know you as a landlord, not a repairman. You can imagine what will run through their mind if they see you fiddling with hammers and a wrench.
Whenever there’s an issue that needs repairs, always hire a professional to do the job. In fact, always have plumbers, electricians, and mold removal specialists on your speed dial.
Staying on top of regular property maintenance also goes a long way.
6. Failing to Setup an Emergency Fund for the Property
Investing in a rental property is capital-intensive. You probably took out loans to finance the acquisition. So, it’s understandable if you’re spending most of your rental collection on mortgages and other expenses.
However, failing to set some cash aside for the property is a big mistake. What if there’s an issue, such as water flooding, that results in a major repair bill? Without enough cash in your emergency reserves, you could be forced to take out expensive loans to foot the bill.
Develop a habit of setting aside a certain percentage of your monthly collection for property emergencies.
Avoid These Common Property Management Mistakes
Any landlord who isn’t trained as a property manager is prone to making these common property management mistakes. The good news is they’re easily preventable as long as you familiarize yourself with them. Plus, you can always hire a property manager and take a hands-off approach.
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