7 Common Rental Property Owner Mistakes
When you own a rental property business, it can provide you with another source of income. However, as lovely as that sounds, managing a property requires focused attention and juggling major responsibilities. It’s easy to think that simply receiving rent each month is expected. It doesn’t always work out that way, unfortunately.
There are pitfalls to be aware of and avoid, especially for new landlords. It can also be expensive to make these mistakes. Read on for useful information that can help you make your rental business more profitable.
Common Landlord Mistakes
1. Choosing to Self-Manage Your Property
When you first bought your property, you might have dreamed of managing it smoothly and fuss-free. The reality, however, can often be a direct contrast. There are serious responsibilities to attend to that can make the process stressful. Managing the property upkeep, tenants and remaining compliant to the laws can be extremely overwhelming, especially to a new landlord or one with multiple properties.
Hiring an experienced property management team helps you avoid the detrimental effects of stress. It’s a challenge to cope with various duties, and you want to avoid dropping priorities just to meet other business demands. You always seek to adhere to California regulations to avoid potential lawsuits. That’s why it’s best to work with a professional team who will handle your property, tenants and finances.
2. Hiring a Lease-Focused Company Instead of a Property Management Firm
When you work with a company that’s only driven to fill your vacant units, they might neglect the important aspects of the reason you invested in a property in the first place: to earn optimal income. Doing so requires that the tenants and property are well-managed. A firm solely focused in attracting tenants won’t have your best interests at heart.
Hiring a full-service property management company will solve your stresses, as they’ll make sure retaining tenants is just as prioritized as tenant acquisition. This creates a more stable income for you.
3. Working with a Real Estate Agent Instead of a Property Management Firm
When you choose to hire a real estate agent, a problem occurs. This is because real estate agents are focused on selling a property, not managing it. They will not have enough resources to properly manage your property and may be inefficient in doing so.
Avoid experiencing ineffective management by a real estate agent: hire a property management team that has the resources, specialized skills, in-depth expertise and legal knowledge to ensure you’re protected as a property owner at all times.
4. Assigning the Wrong Rent Price
It takes skills and knowledge to property price a rental unit. As a landlord, your aim is to maximize returns. If you price too low, you run the risk of undervaluing your property and losing additional income. If you price too high, you run the great risk of high turnovers.
Hiring a property management team can serve you well financially. They’ll conduct the necessary critical rental analysis for you, and you’ll earn well in the long run, while accumulating loyal tenants in the process.
5. Having Unclear and Inconsistent Tenant Rules
As a new landlord, you might be guilty of bending your outlined rules to please your renters. This is bound to backfire, however, since tenants can take advantage of this leniency. The guidelines in the lease must be respected; after all, you’re running a business, and adherence is expected. If you only choose to enforce certain conditions (or worse, allow a select few to get away from abiding the rules), you’ll create an environment ripe for future conflicts.
Hiring a property management team lets you avoid this dilemma. They’re a neutral party that acts as your professional representative.
6. Engaging in DIY Maintenance and Repairs.
As a self-managing landlord, it’s easy to prioritize saving a few bucks and resorting to DIY repairs. However, this can result in costly consequences. The work of a professional differs greatly from someone who’s untrained. If you want to preserve the market value of your rental property, only expert repairmen should perform the maintenance. If you fail to resolve the problem, then you not only inconvenience your tenant, but may also experience a higher charge for corrective repair by a licensed contractor.
Hiring a property management team greatly reduces your expenses. They can have an in-house staff attend to all types of repairs, saving you money. Alternatively, they can work with their close network of licensed contractors who’ll provide huge discounts that can be passed on to you.
7. Having Extensive Conflicts with Tenants
When you manage your own property, you’re bound to experience negative situations with your tenants. You might be tempted to continue ignoring the underlying problem. However, prolonging disputes can affect your relationship greatly, and may result in unfortunate incidents such as an eviction or lease violation. The best recourse is to communicate with your tenant and find middle ground.
Hiring a property manager can be helpful, as they will act as a neutralizing force. You’ll greatly avoid brewing conflicts, since they will be the ones responsible for engaging with tenants. This means less client interaction and stress for you.
When you make risky decisions, it can affect the success of your rental business. These are the common mistakes a landlord experiences while managing a property. These situations are realistic, and often lead to poor performance of a rental property. Even if you have the best property in an impressive location with high demand, the way you manage it is what matters.
Make it easy for yourself, and hire an experienced property management team like East Bay PMC. They can professionally manage your property and help you avoid long-term mistakes that can harm your finances. East Bay will oversee your property, take care of your tenants and provide you with the peace of mind you deserve!