Property management can be challenging – you have to juggle all sorts of responsibilities on a daily basis, all while making sure you keep your clients and their tenants happy.
If you fail to do your job properly, you could end up losing clients, dealing with angry tenants, or even facing a costly lawsuit! To avoid these circumstances, let’s look at 8 common property management mistakes and how to avoid them.
1. Not creating a formal property management agreement
When you manage a property, your money is at stake. That’s why it’s important for you to create a property management agreement and get it signed by the property owner, regardless of whether or not it is required in your state. This simple step can protect you from legal action and disputes with the property owner for the duration of your business relationship.
2. Failing to get important information in writing
A formal property management agreement isn’t the only thing you need to track. When working with tenants, you should also document anything notable in detail. That can include:
Damages – Take photos of any damages, and add a timestamp to the photos if possible.
Conversations – If you and your tenants discuss any changes to the lease or other important matters, consider emailing them with a summary of the conversation and asking them to reply to confirm what you discussed. If they try to deny the conversation later, the email can serve as proof of what happened.
Repairs – Make note of the date your tenant requests repairs and the date that the problem is resolved.
While these steps may take some extra effort on your part, you will thank yourself later when you need the legal protection that proper documentation offers.
3. Failing to communicate with the client and tenants
Are you looking to land some amazing online reviews for your property management company and keep your clients happy?
Of course you are, and you can do it by being proactive and keeping the lines of communication open with your clients and their tenants. That’s because effective communication helps you avoid conflict and understand tenant/client needs. Overall, your clients will be happier and more likely to leave you a positive review if you communicate with them on a regular basis.
On the other hand, if you are avoidant and uninvolved with your clients’ needs, you will likely find yourself dealing with misunderstandings and other problems. So, let your clients and their tenants know that you’re happy to help them as needed – they’re sure to appreciate the extra effort on your part!
4. Using an ineffective screening method
Sometimes, you may find it tempting to trust a tenant when they verbally provide information about their income level, rental history, and more so you can rent out a property faster. However, failing to get proper documentation and to screen tenants thoroughly in general can result in costly problems later on.
For example, if you don’t verify a tenant’s income level, you may find them struggling to pay rent. This can result in extra stress and work for you and can eventually mean that you need to begin the eviction process. So, make sure you always check a tenant’s references, perform a background and credit check, and follow all other necessary steps to screen a tenant properly – no exceptions.
5. Failing to perform regular inspections
As a property manager, you’ve probably heard horror stories of tenants leaving behind excessive damage when they move out. This problem is usually avoidable – all you need to do is inspect the property regularly so you can fix minor problems before they become worse and more costly.
6. Putting off routine maintenance
While we’re on the topic of maintenance, think about what could happen if you neglect a property’s routine maintenance needs.
First, chances are that your property will start to look run down, which can decrease its curb appeal and value. Costly problems with the property could arise which may have been easily preventable if you had taken the time to maintain the property. So, don’t put off maintenance tasks – address them as quickly as possible to preserve the property and your reputation as a manager.
7. Choosing the wrong contractors
Let’s face it – many contractors get away with overcharging for their services. This is why it’s so important for you to shop around for both reliable and reasonable contractors.
This does not mean you should settle for an inexperienced contractor just to cut costs. If you do, you may find that their work is low quality and some of the problems they address require attention again in the near future. So, try to find the best of both worlds – an experienced contractor whose rate is fair.
8. Allowing tenants to fix problems with the property
While doing this may seem like an easy way to avoid the burden of maintaining the property you’re managing, it can backfire. For example, if a tenant is unqualified to make repairs, they may cause even worse problems that you’ll have to pay an expert to fix. On top of that, an unqualified tenant may sustain injuries while performing a repair, resulting in them taking legal action against you and/or the property owner. Further, certain updates and improvements require a license or permit, so you could have a legal issue on your hands if you allow tenants to perform their own home improvement tasks.
Let tenants know that you will take care of their maintenance needs and hire a trustworthy contractor to make sure the job is done right.
Managing property is no easy job, but it can be fulfilling and profitable when done correctly. Remember that the relationships you create and the guidelines you follow are of the utmost importance to your success. With the necessary know-how, you can avoid costly and frustrating mistakes and become a better property manager.
Patrick Freeze is a native of Baltimore, Maryland and President of Bay Management Group, a property management company headquartered in Baltimore, Maryland. He graduated from Dickinson College where he studied Economics and Business. Patrick has over ten years in real estate and over seven years of property management experience. He is a licensed real estate broker and a member of multiple organizations including NARPM®.
Disclaimer: LandlordSource does not represent the article content in this website as legal advice. It is shared information only and up to the reader to use this information responsibly, seeking legal advice as necessary to their business.