Mistakes mean time and money spent chasing tenants, appeasing clients or facing a lawsuit. To save yourself from these headaches, be sure to avoid these seven property management mistakes.
1. Failing to communicate with owners and tenants
For an industry based on managing relationships with landlords and tenants, communication is crucial. While a breakdown in communication can lead to misunderstandings, poor rapport and even lost clients, being proactive and keeping communication channels open can ensure long-term tenancies, lower vacancy rates and greater client satisfaction.
In fact, statistics show that good communication is the key to success for property managers. One way to be more transparent is to use a property management software with an owner portal. This way, your clients can log in at their own leisure and see the current financial status of their properties and any activity summaries. Read more about how to increase communication as a property manager.
2. Forming direct relationships with your tenants
On the other end of the spectrum, you may be communicating too much with your tenants and forming direct relationships with them. Although some aspects can be rewarding, it can make business matters like rent increases difficult and awkward.
Remember that at the end of the day, business is business and relationships should be kept courteous and purely professional.
3. Putting off routine maintenance and inspections
Another common property management mistake is neglecting routine maintenance and inspections. This can lead to tenants leaving behind excessive damage when they move out and can cost you time, money and even your reputation.
It’s crucial to inspect the property regularly so you can identify and fix minor problems before they have a chance to develop or worsen. Not only will this save you time and money in the long run, but it also keeps your tenants on their toes and gives them the impression that you are responsible and attentive.
Additionally, when maintenance problems arise (however minor), do not let tenants handle them as this can lead to additional damages and even liability for potential injury.
4. Hiring the wrong contractors
You wouldn’t settle for any tenant, so why settle for any contractor? Hiring the wrong contractors can have costly repercussions in the future, so it’s important to avoid the temptation of hiring based on price and shop around for reliable and experienced contractors.
An experienced contractor will almost always come with a higher fee, but keep in mind that the quality results will save you money in the long run. For example, an inexperienced contractor may be able to complete a painting job but you may find that the same job requires attention again in the near future.
5. Not screening your tenants properly
Every property manager has their own way of screening and vetting tenants. The question is, are you being thorough enough?
Without effective tenant screening procedures in place, you can run into major problems down the road. These can include anything from not paying rent, unknown pets to property damage and hidden drug labs. To prevent these issues, be sure to take the time and money to complete thorough background checks and weed out undesirable tenants to find quality, long-term tenants.
6. Not having important details in writing
As a property manager, you’ll have formal property management agreements in place with your clients and leasing agreements with tenants. However, one mistake many property managers make is neglecting to have other important details in writing. This can include photos and timestamps of damages, logs of conversations, and the date and details of maintenance requests.
While this may take extra time and effort, proper documentation will provide you legal protection if the need ever arises.
7. Sticking to legacy software
The last property management mistake you need to avoid is sticking to legacy software. As technology continues to advance, legacy software is becoming obsolete (and most likely is already). However, many property managers still make the mistake of sticking to what they know and are comfortable with, resulting in integration issues and loss of market share.
With legacy software, not only are you vulnerable to physical disasters and viruses, but you’re also crippling your own efficiency. Just look at this real estate agency that had their data held ransom!
On the other hand, cloud property management software is constantly updating and innovating with owner portals and mobile apps to help you gain a competitive edge and increase efficiency.
All in all, these property management mistakes can be avoided and remedied. While it’s easy to stick to what you’re comfortable with, it’s important to embrace change and learn from your mistakes to become the best property manager you can be.