5 Crucial Property Management Mistakes to Avoid
If you have a rental property, this is a MUST read!
Property owners frequently underestimate how difficult it may be to invest in property management, resulting in unnecessary losses instead of it being a lucrative venture. Property management frequently involves complex agreements and a wide range of clients, which leaves a LOT on the table in terms of errors. If you're not careful, you will learn property management the hard way, and drain whatever budget you have for it.
Here at The Williams Team, we will give you 5 helpful tips to avoid any headaches and to make sure that you are staying away from these typical property management errors from the start.
Mistake #1 - You Don't Screen Tenants Properly
Here is where it all starts - and where a lot of potential tenant-related issues can be stopped in their tracks!
Even though the risks are great, it is usual for landlords to skip the tenant screening process in exchange for very quick transactions. Unfortunately, there are certain tenants who are skilled at abusing this trust and will unavoidably give you that unwanted misery for months!
Even though paperwork can be annoying, and you might even be waiting for that very first rent money, it's nothing in comparison to the possible financial losses you could incur later on.
Mistake # 2 - Not Getting Enough Paperwork Done
Skipping this part is FATAL for your rental income.
Even though it seems like this is the most obvious thing that you will hear from anyone who is in this business, some property owners still do business on a handshake.
So once more, please make sure that your paperwork is in order!
We cannot stress this enough - Even if you're renting the house next door to your a family member, or with the greatest friend that you have ever had in your life, you need a written agreement specifying the monthly rent and other tenancy requirements (If they really are the greatest friend that you ever had, then they shouldn't have problems with it - they should only care about what's the best for you, right?).
Do not EVER just shake on it when it comes to rentals. Should something go wrong while they are residing on your property, this will safeguard both you and your tenant. Building trust requires responsibility from both ends of the deal.
Mistake # 3 - No or Poor Property Insurance
Given the hefty price of insurance, many property owners choose to purchase the bare minimum first in order to save a few dollars and forget to get a proper one later.
This grave mistake ensures you that you are NOT having the appropriate insurance coverage.
You must ensure that your rental property is insured properly as a landlord. Aim to always do your research to avoid purchasing the incorrect type or quantity of insurance coverage.
The appropriate insurance might actually help you save hundreds of dollars if set up correctly. Sure, you'll shell out first, but you must be aware of the various solutions at your disposal in order to minimize coverage gaps. Investment insurance is considerably more intricate than standard homeowner insurance.
Make time to talk about your insurance alternatives with a qualified expert who is familiar with real estate investment if you want to solidify your property.
Mistake # 4 - You're Not Doing Regular Inspections
If you have something precious, don't you want to always check on it from time to time?
Performing regular property inspections is like doing that. It means you are protecting an investment and possibly your main source of income.
A few visits to your property (or properties!) each year could seem excessive or like an invasion of your tenants' privacy.
It is, however, without a doubt, the greatest approach to keep track of maintenance issues and ensure that your tenants are abiding by the terms of their lease.
Therefore, try not to be too trusting or lazy(again, even if its your best friend in the world who is renting). Set the expectations beforehand, and execute the inspections consistently.
Mistake #5 - Doing It Yourself
If this is your first time, and you're just trying to wing it - you might end up having a very, very bad time.
New landlords/ladies often attempt to manage their property themselves. This usually spells disaster right at the get-go as you might find yourself spending rather than earning. You may not be able to comprehend the fine print found in most lease or purchase contracts.
An experienced leasing realtor will be able to go through the documents with you while keeping your interests in check - that way, you can get someone to do the job for you so you can earn passively!
If you're looking forward to entering the rental business, or if you are an existing landlord needing advice in property management - we are here to help! Let's discuss how we can start (or improve!) your rental business by visiting www.thewilliamsteam.com . We have already helped thousands of clients regarding issues with their home - and we are more than happy to lend a hand!