So being a landlord might seem like quite an easy job. It’s all about staying home and watching the income come in every month, right? Wrong.
Landlords of all shapes and stripes are considered property managers. This means that they are just as liable to make mistakes with property management as anyone else in the real estate market.
They are responsible for finding the right tenants and the maintenance of their units, ensuring the safety of their tenants, and even providing access and constant support. In short, not an easy job to do.
Yet, proper maintenance for property does have to be an overly complex process. Keep on reading for our full breakdown of the common six mistakes among landlords and how to avoid them.
1. Mistakes With Property Management 101: Ignoring Your Local Market
Before we delve deep into all sorts of mistakes that landlords commit daily, let’s start with one of the most obvious (and hurtful) of those mistakes.
You might have heard of the adage in the real estate market of “location, location, location,” but did you actually integrate this into your property management strategy?
You’ll want to spend some time researching your neighborhood, what makes it great, and what makes it not-so-great. What do your local renting rates look like? And, what about the average property taxes?
All of those factors will help you determine how much you can realistically charge for rent, which pours directly into your bottom-line profits.
2. Disregarding Fair Housing Laws
Once you’re in the business of accepting rental applications, you’re expected to comply with the Fair Housing Act and its anti-discrimination laws.
If you’re unfamiliar with the fair housing act, then it’s definitely time to study all that it entails. In the simplest of terms, the act makes it illegal to discriminate against renters and applicants based on their color, race, national origin, religion, sex, disability, or familial status.
Of course, this is more on the federal level. But, the states and local governmental entities have added on more protections for those who aren’t covered by the fair housing act. All you need to keep in mind is that your conversations about the perfect tenants or your marketing materials should be as inclusive as possible and not specifically geared towards a single group or category of people.
In short, make sure you’re communicating and treating every single applicant or renter in the same way, and you’ll be good to go.
3. Improperly Screening Tenants
Or not even bothering to do it in the first place.
If you’re new to being a landlord or a property manager, you might be unfamiliar with just how much of a pain that terrible tenants can be for both you and your other tenants.
Those who bother their neighbors or fail to pay rent on time should be avoided at all costs. And, one of the main ways you can filter bad applicants and preventing them from becoming your actual tenants is by applying pre-lease screening protocols.
You can do those manually or get the help of a professional tenant screening service. You can check out how high-quality property management companies, like Reedy & Company management, do their own.
4. Delaying Making Repairs on Time
Sure, it’s not exactly the most fun exercise to receive midnight calls from your tenants about a leaky faucet.
But, we can assure you that your tenant isn’t happy about having to make the call either. To ensure that your property is working like a well-oiled machine, you’ll want to take a proactive stance on property maintenance and doing repairs on time.
A simple strategy to follow would be scheduling frequent inspections for damage deduction and training tenants to spot signs of precursors to bigger issues or damages.
5. Not Preparing Vacant Units
You’ll find that many landlords take the easy way out and wait until someone actually commits to leasing a unit before properly preparing it for occupation.
That’s a novice mistake that you’ll want to avoid at all costs. After all, your potential renters will be basing their decision on whether to commit to renting from you based on how your unit looks at the moment.
They don’t spend much mental effort imagining the unit and how lovely it will look once you’ve fixed the holes in the walls or given it a new layer of paint. And, honestly, they shouldn’t have to.
You’ll want to make it a habit to prepare your units for new tenants. Specifically, the moment the previous occupant moves out. On the surface level, it might seem like a waste of resources. However, doing so will draw in a special type of tenant, specifically those in a hurry to move in.
6. Failing to Treat Your Rental Like a Business
This isn’t the time to rely on your memorization skills or even your charming personality. When you decide to become a landlord, you’ll want to start treating your rental property as a business with the attached income source.
As with any income on the planet, you have to provide a value to get that income. This rule also applies to all forms of passive income. So you’ll want to dust of your accounting software or spreadsheets. After all, it’s critical for any successful business to keep good records and books of its comings and goings, otherwise known as income and expenses.
After all, you’d be surprised at how many skills a successful landlord needs to run a good business. From accounting, home repair to marketing and customer service, anything that has to do with the real estate market, property management, or your tenants will affect your business and its growth.
A simple way to ensure that you’re keeping up with the big boys is by joining a local or a national landlord association. This will ease the way of keeping up with the latest rules and regulations, as well as getting some solid advice from folks who have been landlords for decades.
How to Manage Property: Unlocked
It’s both exciting and rather stressful to become a first-time landlord or a property manager. But, hopefully, with the help of our explainer, you can avoid making the most common mistakes with property management, starting with the primary six that we see time and time again.
Remember to take it slow and start with the right types of property. Once you’ve been a landlord for a year or two, you can start looking into different opportunities to expand your business.
And, if you liked our article, make sure to check out our additional tips and tricks, all available to you in our real estate section.