As a landlord, you rely on your property manager to handle the day-to-day tasks of managing your investment property. While it’s clear that rental property is a smart financial investment, all too often investors don’t realize the complexities of managing that investment. It doesn’t matter how good you are in the property management business, there’s always something you can get sued for. Rental property management isn’t always easy, but you can make it easier on your business by adopting best practices in your field.
As a property manager, you need to ensure that your employees, your contractors, your tenants, and your properties all work well together. Avoid these five property management mistakes, and you’ll put your business on the road to success.Your tenants want the best, and you want the best as well.
When you have tenants who damage properties, fail to pay rent, or turnover quickly, this costs your business time and money. Some of the most important components of a proper screening process include: Criminal record check, Credit check (here’s a great primer on how to do this), Character and/or landlord references, Rental history (Experian can give you access to rental payment history),
Proof of employment/income.
This process should be carried out consistently for each new prospective tenant. If you don’t have a set of screening questions and a formal process for checking tenants’ references and credit history, you need to have this in place to ensure that your rental property management business will achieve greater success.
Not keeping proper records/notes.
Being proactive in your maintenance and tenant management is the way to ensure that you have a steady cash flow and avoid crises. When you create an annual and monthly maintenance schedule, you’ll be able to prevent problems and discover them at an early stage, saving money and making your tenants happy. Being a property manager often means putting in long hours, so it’s not surprising that many managers fail to keep written notes or records regarding their properties. Keep in mind that keeping proper documentation goes beyond the initial application forms and lease or rental agreement. Property managers should also maintain files for: Payment records which can prove particularly important if a tenant consistently misses payments or makes late payments. Receipts and warranty information for purchases and repairs. Emails/phone calls made: Written communication (email) is always best, as it provides the best backup in case of any legal action. Formal written notices, such as notices to enter the premises, rent increases or eviction notices.
Not maintaining open communication with tenants.
As a landlord, you count on your property manager to be the main point of contact for your tenants. Being responsive to questions and concerns will help ensure little problems don’t turn into big ones. For instance, a small water leak can quickly lead to thousands of dollars in repairs if not dealt with quickly. Ask new tenants what method of communication they prefer, particularly in cases where an urgent issue needs to be addressed. Always return phone calls and emails promptly. This is a huge problem in the industry, and is one of the biggest complaints tenants have about property managers. Having a list of go-to contractors available to your company can ensure that your properties’ needs are serviced as quickly and as well as possible and also prevents you from working in a state of crisis. List of contractors that you’ve worked with in the past or who have an excellent reputation in the places where you work ensures that you’ll have an easy time making an appointment, getting reasonable prices, and ensuring that any work you order is completed in a quality and timely fashion.
You Don’t Understand the Diversity of Your Tenants and Neighborhoods.
When you’re involved in rental property management, you need to understand how potential tenants fit with the different neighborhoods where you manage property. Create profiles of the neighborhoods where you work, with lists of the local recreational facilities and cafes, the distance to the urban core, and services that target families or specific age or cultural groups. Understand the profiles of your typical or desired tenants as well, compiling information about their housing, location, amenity, and price preferences. As you market your properties, use this data to determine your marketing targets and methods.