Like any industry, not all Property Managers are the same. Property Management is an art and a science, with experience being a very important ingredient when choosing a property manager. Over the years we have complied a list of common mistakes that some less experienced and DIY landlords make during the leasing process. We hope that by providing this list, you can avoid some of the pitfall’s others have experienced.
Mistake #1 – Not screening potential tenants with a proven scoring system for all tenants. Often, we hear of the manager or owner making exceptions to their criteria which leads to an increased eviction rate, and also opens the management company and owner up to potential liability through discrimination claims.
Mistake #2 – Not handling maintenance requests in a timely manner. A Landlord’s ability to quickly and efficiently prevent and solve maintenance issues leads to happy tenants, low turnover and preserve property values.
Mistake #3 – Failing to regularly inspect properties. Landlords should visit each property no less than twice a year and more often when pets or animals are involved. Doing regular inspections ensures lease compliance and prevents damage and added costs long term.
Mistake #4 – Allowing or making Tenants responsible for their own repairs. Tenant’s rarely have the skills or expertise when it comes to handling repairs. Allowing Tenants to perform or requiring tenants to repair any item under a certain dollar figure creates potential liability issues and often results in having to repair or re-do the repair later on.
Mistake #5 – Being afraid or failing to charge tenants for actual damages beyond normal wear and tear. Many property managers under charge or do not properly charge for damages in fear of upsetting the tenant or perhaps receiving a bad google review.
Mistake #6 – Inaccurate accounting practices. Attributing income and expenses to the specific GL account keeps the books accurate and reliable. Having a property management-based accounting system ensures your numbers are not fuzzy math and helps Owners determine how their asset is performing.
Mistake #7 – Including utilities in the rent. Too often Landlords underestimate usage and end up reducing the market rate rent for the property. Tenants should always pay for the recurring utilities such as power, gas, water, sewer and trash. Hertz or Alamo would never pay for your gas when you rented their car not knowing how many miles you were going to drive and the same is true for when you lease a property.
Mistake #8 – Charging Pet Deposits. Wait, can’t Landlords charge pet deposits? The answer is yes but they should NEVER itemize a pet deposit on a Lease. When a Landlord does so, that deposit can ONLY be used for pet damage. Instead, Landlords should raise the total security deposit. This covers all risk not just one category.
Mistake #9 – Failing to budget for repairs. Landlords that do not budget and spend on routine maintenance and upkeep will see larger repair costs later on since run down properties have more issues and problems. Also poorly maintained properties attract poor tenants.
Mistake #10 – Insisting on Above Market Rent. Properties that are not properly priced will sit on the market. It is important to remember that Vacancy is an Owner’s largest expense. Also, good tenants with good credit scores don’t overpay and a bad tenant can easily cost much more than the above market rent.
Did you find these tips useful? There’s plenty more as we have created over 100 proven ways to manage properties right. For a free estimate or property review please contact us.