Are you one of those new property managers in the city? Property management can be an excellent way to earn a living. If you own properties, it can also be an effective way to save money. However, there are a few mistakes to avoid to be successful in the business.
Many of these mistakes are avoidable if you’re aware of them beforehand. This post will cover the common mistakes of new property managers and ways to avoid them.
4 Mistakes New Property Managers Should Avoid
Placing Bad Tenants
Many new property managers need to correct the mistake of placing bad tenants. Once a bad tenant lives in a unit, they can create headaches. Even worse, getting them to move out can be time-consuming and stressful.
What can you do to avoid leasing to problem tenants? Deploy strict screening procedures. Run credit checks and screen for income. Check their rental history to see if they are reliable or if they have had evictions in the past. Criminal background checks can also be helpful.
Using a Basic Lease Agreement
Many new property managers make the mistake of not having a detailed lease. They find a template online and make minor adjustments. While this might seem quicker, easier, and cheaper, it can cause problems. Your property and business are unique, so you should design a lease to meet your needs.
The best way to avoid this issue is to work with a local attorney to develop a lease. There are many points to consider when creating a lease agreement. To name a few, you must consider the length of the lease, maintenance procedures, and pet policies. An experienced attorney will take the terms individually to craft a lease that works for your business.
Only Being Reactive with Maintenance
A property manager must take measures to maintain the property and protect its value. Too many new property managers wait to deal with maintenance only when it’s needed. With a reactive approach, you will always be behind. It can also result in higher repair costs.
The best way to avoid these problems is to perform routine inspections and maintenance. A little preventative maintenance can save a lot of money by avoiding costly repairs. However, you will need to remember to respect the rights of tenants. Make sure to give them enough notice before entering units for inspections.
Pushing Rent Prices Too High
We all want to maximize profits from the properties we manage. However, pushing the price of rent higher and higher is not always the best approach. In many cases, it can cost you more than you make from the higher rent. If your rents are too high, it will hurt tenant retention and make it more difficult to fill empty units.
Property managers can avoid this mistake by being aware of the local market. Consider rent prices in the area and try to find comparable properties. Look at the rent prices at similar properties and see how well they perform with those prices. Consider upgrades and improvements to justify a higher rent price.
