Avert These Common Property Management Mistakes
The property management business can be tricky. There are many relationships to balance, not to mention contractual agreements and even laws that the manager must follow. Unfortunately, that means even the best in the business will have property management issues from time to time. We have detailed a few property management problems and solutions so you can avoid or resolve these concerns before they affect your business.
- Failing to have a written property management agreement. Of all the landlord mistakes, one of the biggest is failing to have a written property management agreement in place. A written contract is your most significant protection. It can prevent an angry customer from coming back and claiming you are failing to do your job. If you have the agreement in writing, there is never an argument about what you agreed to do or the details surrounding it. If by chance, the issue was so severe that it went to court, the agreement could save you a bundle, too!
- Lack of communication. Communication is a top property management skill. While many landlords are great communicators with either the client or the tenants, few are good at communicating with both. Putting in the extra effort to discuss any problems with all parties is not a difficult step, but it can offer incredible results for your organization.
- Ineffectively screening tenants. Of all the mistakes landlords make, the one that stings the most is inadequately screening tenants. While the “really bad” tenants who leave you with a mess are sure to stick out in your mind, even those who fall behind on rent or who leave after just a few months and cause you to spend more money on cleaning and marketing put a damper on your business. There are many high-tech screening methods out there today. Thus, make sure you compare the available products and choose one that will keep those costly tenants out of your properties.
- Not performing routine maintenance. Good landlords are always looking at their properties and taking note of any damage or issues that need repair. Routine maintenance is not always flashy, and at times can be burdensome. However, when you take care of the little problems on a regular basis, you will be less likely to need to deal with the significant problems down the road. As an aside, don’t feel like you have to do it all yourself. Sometimes you will get better results by hiring someone to take care of the more difficult or time-consuming tasks.
- Not handling money properly. Do you have a procedure in place for handling security deposits? Where does the money come to pay contractors? What do you do if a tenant leaves without notice and there is a “last month’s” rent on the books? Who receives these funds? Keeping all of your financials in check is just part of good property management. If you are not working with an accountant or bookkeeper, you probably should. He or she can help you know what needs to be tracked for taxes and may have suggestions on how to avoid “coming up short” at the end of the month. Money matters are one thing you do not want to neglect.
With some work, it is not hard to resolve most of the common property management issues that occur. The most important tip is to be proactive. By putting in some effort before the concern spirals out of control, you will assure a good experience for everyone involved!
The information provided herein is for advisory purposes only and AAOA takes no responsibility for its accuracy. AAOA recommends you consult with an attorney familiar with current federal, state and local laws.