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All it takes is one wrong decision or a series of missteps to instantly spell disaster in your property management business. To avoid this from happening, you need to get rid of the 5 mortal sins of property management.
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A lot of landmines are now being littered in the property management business. These landmines can involve the housing authorities, owners, service people, neighbors, or a combination of any of these personalities. Sometimes you may need to face an expensive lawsuit or to handle bad online feedbacks or reviews. Here are the top 5 mortal sins that a property manager should not commit. 1. Being not Firm Enough with Tenants Being too friendly, generous, and not firm enough with tenants will most likely make you suffer the consequences. As a property manager or a landlord, you need to create a narrow border line between being too lenient and being too friendly and generous. This does not mean, though, that you have to be too tough to them. You have to strictly impose the rules and regulations including the proper care and maintenance of the property, partying, noise, living with pets, and on-time rental payments.
2. Absence of Written Rental Agreement Most of the time, this type of business is conducted and sealed only with a simple handshake. It might have worked a few years back when people still consider the value of honoring their words. But today, you can no longer trust an agreement that is confirmed through handshakes. One of the biggest mistakes that can possibly cause future problems is the absence of written rental agreement. A written and signed agreement does not only protect you and your property, it will likewise serve as a proof of evidence if ever you need to defend or present yourself before the court or to another third party.
3. Poor Communication Poor communication can lead to misunderstandings. As a property manager, you should always keep your communication line open. If you think tracking your conversations is a bit challenging on your part, you can use a property management software. It is important that the owners and tenants can contact you anytime whenever they have something to ask or suggest and not only when something goes wrong. 4. Underestimating the Value of Security Deposit Never underestimate the value of a security deposit. Security deposits are comparable to an insurance policy. It gives you the assurance that you can get something in case the tenants failed to pay their monthly rental fees. Do not waive your right to ask for a security deposit. Remember, it is always better to have it even if you don't need it than to need it but you don't have it.
5. Neglecting the Red Flags Before handing over your property's keys to a prospect tenant, be sure to investigate a bit further first. You should consider doing background and credit checks. You should also verify his source of income. If he was renting on another property before, ask a feedback from the previous landlord. If the prospect tenant does not meet your minimum requirements, it is better to move on to the next prospect. Never neglect the red flags like bad credit records, an unstable source of income, and prior eviction.
Property management is indeed not as easy as counting 123. As a property manager or a landlord, you need to be extra careful when making decisions because most of them will have a lasting effect. The decision or the series of decisions you made yesterday can either make your business soar high or make you suffer from unfavorable financial consequences in the future.
