Managing a rental property can take a lot of work. There are renters both good and bad, but how can you tell the difference? This is a ‘learn as you go’ business, and mistakes naturally happen in the beginning stages. For those new to property management, here are five mistakes to avoid.
1. Skipping the Screening
Almost every standard housing application includes a place for references. The most important references to look for are their last property manager and the prospective renter’s current employer. Getting a good picture of how dependable the person is helps you determine the quality of renter you are potentially getting. Background checks on any new tenants can also give you important information to consider before renting to them.
Many property managers skip this screening because it takes time, but it is well worth the effort to screen tenants carefully. While an empty unit does cost you, property damage caused by bad renters can cost you even more.
2. Staying Tied to Your Phone
Problems occur around the clock with some rental properties. While many property managers are tied to their cell phones and answer whenever it rings, that is not necessarily great for family life. Emergencies are like a broken pipe, they need to be dealt with quickly. Ignoring calls is not really an option if you want to keep tenants happy. Instead of taking every call as it comes, use an answering service and take away the headache from always needing to be on the phone. This type of service takes calls for you, filtering the emergency calls from the ones that can wait until you are back on the clock.
3. Not Signing a Lease
Signing a lease is a basic when renting out a property. The amount of time you make that lease is between the two parties involved, but a year is the most common option. Make sure that terms of the lease are spelled out clearly and that a copy is given to the tenants to keep in the house. It is usually a good idea to have a lawyer look over everything before you let anyone occupy the property.
One of the most common stipulations of signing a lease is providing the first and last month’s rent upfront. While many renters complain about deposits, it gives you a more solid commitment from them. This type of deposit allows you to take care of any minor property damage once they move out.
4. Utilities in Your Name
One rookie mistake is letting your renters keep the utilities under your name. Many people have a difficult time getting utilities in their name due to unpaid bills and bad credit. If this is the case, you may want to reconsider if they are reliable enough to rent from you. Some opt to keep the utilities in their own name with the stipulation that the tenants will pay you instead. Sadly, there are too many stories where the utilities are run up and the bill is left to the account holder’s responsibility.
5. Being too Nice
Good tenants are worth their weight in gold. Don’t chase good tenants away on small mistakes, but don’t let them push you around either. If they have a good track record, you can always make exceptions on a late payment every now and then. If payments are consistently late or stop, they are causing too much trouble with the neighbors, or damage property, it may be time to evict. Tenants may come up with excuses, but the bottom line is that you have a business to run.
Property Management may have a learning curve, but if you apply these ‘what not to do’ tips, you are sure to succeed! Contact us today for more information.