Property Management: The Seven Deadly Sins

Property Management: The Seven Deadly Sins

It can be difficult for some property owners to make a profit. This is due to a lack of effort. Landlords are responsible for everything, from advertising, interviewing tenants and collecting rent to fixing toilets and cutting grass to answering late-night calls.

Why do many property owners struggle with making money?

They lack the skills to effectively manage their property. It may be tempting to do your own property management if you are handy, close to the property and have unlimited time to dedicate to learning the skills that you lack. But in most cases, this is not practical.

We’ve compiled a list that includes 7 deadly sins in property management. These are common mistakes that can take a big bite out of potential profits. We’ll teach you how to avoid making these mistakes so that your property can be worth more.

Sin 1: You set your own rental rates

Renting rates are set by your gut, not your brain. Humans can be emotional when it comes to their investments. What amenities do renters really want in your area? It can be hard to separate subjective value from objective rent in your market.

Start by doing some research to determine fair rates.

It is better to use your instincts than just browse the local newspaper and Craigslist. It can be difficult to tell how your property compares with others on these forums. You can also use online tools or websites to get rental comps for a particular market. Some websites charge a flat fee for the reports while others require a membership. This is a better method than Craigslist but it will not give you the most accurate picture of the market. You’ll need the help of local professionals, such as a property manager who has a deep understanding of your area.

Sin 2: Chasing rent checks

No one likes the part of their job that involves imposing late fees for late rent payments.

Does it matter if you are a heartless miser in order to be an efficient landlord? No. This major sin is the reason why many property owners are unable to make a profit. Some landlords do not even charge late fees. By the time rent is paid, the landlord has worked for free.

Consider this: Have you noticed that your bank does not accept many reasons for late mortgage payments? You should have the same mentality, except for the pandemic-related difficulties and their recent rules and regulations.

This may seem cold-hearted, but as a landlord you must have this type of system. Your tenants will sign a contract that is as clear and concise as the documents you signed when you bought your home. Make sure that the penalties for late rent payments are clearly stated in the lease, and that you adhere to it.

Sin #3: Aemic Marketing

You’ll need to compete with other properties in the community for their renters’ attention. Renter owners who are successful always think ahead, particularly in terms of marketing. They are always thinking about how to make their community and building unique.

Ideal landlords should:

  • Take professional photos that accurately represent the property.
  • Post your properties on all listing sites
  • Create social media posts to highlight the unique and enviable features of your property.
  • Market the property at least two months in advance of the expiration date of the lease.

You can hire someone to help. It’s unlikely that you need an agency. However, there are many online resources where you can find copywriters and marketing experts. You will still need to supervise them and pay any advertising you run.

A good property manager will help you effectively market your properties. A good property manager will be familiar with the best marketing methods for your region and have the resources necessary to do so.

The Fourth Sin: Selecting the Wrong Tenants

Each applicant should be screened. You’re mainly looking for a rent that is greater than three times the income, and references with good ratings.

The application should be filled out in full by each applicant. This means that they must sign documents authorizing you to obtain credit reports, contact your current and former landlords and employers and pull up their credit scores. Find someone else if they refuse.

In competitive markets, successful landlords are more likely to reject people than accept them. This is because they have clear standards for the type of tenants they want to be part of their community.

The leasing agents are also familiar with local and federal fair-housing laws for every step of the process. You’ll spend a lot of money and time in court if you make a mistake during the screening process and when you move-in by not following Fair Housing Laws.

Sin #5: Tenant repair and maintenance by yourself

Repairs and maintenance require a system just as much as your marketing, screening and move-in process. No matter which system you choose, it’s important to keep in mind that you will need a way to accurately track each job or repair. What is not measured cannot be improved.

Even though it’s unlikely that a landlord enjoys plunging toilets for tenants or being woken up at 2 am to perform CPR on water heaters, 8 out of 10 investors prefer to take care of their own repairs and maintainance. The majority do it to save money. They are sadly underestimating the need for basic maintenance, let alone emergency tenant repairs. The only budget they have for both is the amount of credit available on their cards.

We’re not saying that you should never do your own maintenance and repairs. You should make a plan, and understand what you are getting into before you decide to do it. Renters who are not profitable and try to take on the maintenance and repair beasts by themselves often end up spending large amounts of money.

Sin #6: Paying contractors too much

Unfortunately, the contractor relationship that leads to special pricing doesn’t happen just because you shake hands. You build them by sending regular work to them and paying on-time.

Some contractors are shady and can tell a novice or an inexperienced home owner a mile off. You may think you are getting a great deal, but you won’t know for sure unless you spend a few evenings calling around and getting quotes, and then cross your fingers that you get someone who will do the job correctly the first time.

Consider partnering with a Property Management Company to accelerate the process of building a contractor’s network. Property management companies have established relationships with contractors, vendors, suppliers and tradesmen that are affordable.

Sin #7: Ignoring Housing Laws

It can be overwhelming to keep up with the ever-changing housing law. Fair housing regulations should not be ignored, but you must always pay attention to all housing laws. Summary: The federal Fair Housing Act bans discrimination based on race, color (including gender identity, sexual orientation, and national origin), religion, sex, familial status and disability. Understanding these and other housing laws will protect you from a claim of violation, as well as ensure the integrity of your company.

There are many laws that must be followed, not just the fair housing regulations, and they differ from state to state, county to county, or even neighborhood to neighborhood.

It’s best to stay out of the I’ll-catch-up-on-this-stuff-later mentality. You may find it difficult to escape the piles of work that are constantly piling up on your desk. Most landlords are only aware of fair housing when they receive a letter from Fair Housing Administration that threatens legal action. Do not let this happen.

Hiring a property manager is the easiest way to avoid these seven deadly sins and stay in compliance. You can avoid lawsuits if you hire a property management company to keep your property in compliance and up-to date.

It is possible to avoid many of the difficulties you may face as a landlord by partnering with a professional. However, this choice might be difficult and not suitable for all situations. Property managers are the best choice for landlords who need professional assistance with some or all of their financial, marketing and maintenance needs.

Consider these three factors to decide whether partnering with a real estate manager is the best next step for you:

  1. You lack experience in managing the property you have listed above.
  2. You are concerned about how much time you will have to spend managing, marketing and maintaining your property.
  3. The distance between your home and the rental property prevents you from being able to personally supervise the property.

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