Common Rental Property Owner Mistakes
Managing a rental property is a dynamic business. If you’re a new landlord, being updated and learning the best practices will help your operation. If you’re a more experienced landlord, it’s always good to be reminded now and then. You might also pick up a tip or two if you keep fortifying your knowledge.
Here are mistakes that landlords can do well to avoid:
1. Lacking Efficient Systems While Growing the Rental Business
So you’ve run a successful rental property and have decided to add more rental units. While it might have been easy managing one tenant, it’s a different story when catering to more. Your efforts will need to be multiplied and you’ll also be conducting maintenance for several properties now.
If you want to be a smart landlord to save time, implement efficient systems. Use software that would allow fast marketing, ease of tenant reporting and online payment.
Investing in technology to automate and manage your time better is a good plan to contemplate. But, if you’re unsure about spending more, you can consider hiring a property manager who already has advanced technology in place. It’s a much cheaper option in comparison.
2. Failing to Conduct Thorough Tenant Screening
If it’s your first time being a landlord, you might be guilty of committing this mistake. Perhaps you have no idea how to run a rental background or you want to earn ROI right away. Never neglect tenant screening since it will save you from stress down the line.
Always find the time to ask for documents to support the application. Look at the income. Are they able to meet the monthly rental payment without sacrificing their living expenses? What’s the status of their credit scores?
It’s important to check if the applicant has a criminal record. This makes sure your property and the other tenants on the premises will remain safe.
3. Neglecting Property Maintenance and Irregular Inspections
If you’re a more passive landlord, it’s time to incorporate routine maintenance. Even if the income is flowing consistently in your hands, delaying repairs can lead to hefty costs. You also want to be compliant with the provincial laws in keeping your rental habitable.
Even if your rental unit is fairly new, you still need to have a solid maintenance program. Why? You don’t want your investment to decrease in value year on year because you neglected it. Worse, your tenants may copy your attitude and avoid maintaining the unit as well. It’s good practice to treat your property in an excellent fashion.
4. Lack of Contractor Research and Background Checking
Sometimes, landlords have a lot of tasks on their hands. You just don’t have the extra time to check a contractor’s work and would simply trust in references. This is a habit you need to nip in the bud.
If you want to safeguard your property from incompetent work, be vigilant about the credentials of your hired specialists.
You’ll want to check out the contractor’s finished works. This is to measure if you have the same aesthetic. Otherwise, you might have a different set of expectations that won’t be met. Worse, you’ll hire another professional to redo the work. This will end up costing you more.
5. Bad Customer Service
No matter how gorgeous your property is, no one will stick around if you have terrible customer service. Frequent turnovers can put you under financial strain. You’ll be constantly marketing and spending maintenance expenses on vacant units. Avoid this scenario and improve your customer service relationship.
Good customer service makes tenants happy and transforms them into long-term tenants. To achieve this, pay attention to your renters by having open communication. Listen, be reachable and promptly resolve complaints. Offer more convenience and respect their privacy.
If you’re not people-oriented, you can opt to hire a property manager. The company will be able to represent you professionally.
6. Not Practicing Preventive Property Maintenance
It’s great that you are maintaining your property. But it’s also a better idea to check on the property before disaster strikes. If you’re just resolving issues and addressing repairs, you might miss spotting probable future property problems. This can drain your pocket.
Think ahead. Follow a checklist and look into everything down to the smallest details and big items. This practice will serve you better so you can fix little damages right away. For example, if you have a small leak, you can repair it before it can expand and flood the entire house. Think of the dollars you can save by diverting a major water damage issue.
7. Erroneous Accounting
Your financial records are the best documents to show your profitability and ROI. If your accounting procedures are disorganized and done in a manual manner, it could lead to inaccurate figures. You can hire a professional bookkeeper or a property manager who’d normally render this service as part of their management service package.
8. Presenting a Home that’s Unfit for Move-in
Maybe you’re in a rush to get your property rented right away. You don’t want to experience an income gap. It’s an understandable motive, but failing to get your property rent-ready only wastes the prospect’s time and yours as well. Would you be confident to show a property that looks disheveled? What kind of tenant would want to settle living in a cluttered unit?
Be a dedicated landlord and create an excellent first impression. Show how you value your rental investment. Get it into shape before conducting property showings. You want to attract a high-quality tenant and not someone who won’t be bothered to take care of it.
Mistakes are part of managing a business. What’s important is learning from it. Try to avoid making many mistakes though to protect your business reputation. It’s tough to regain tenant confidence when you keep making landlord errors.
Now, if you want reliable professional management, consider hiring a solid property management company like Leenan Property Management. We have all of the above-mentioned concerns covered for you!