Seven Common Rental Property Owner Blunders
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. Therefore, I would like to share seven common mistakes rental property owners make…
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.
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.
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.
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.
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.
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. If you want to preserve the market value of your rental property, only expert repairmen should perform the maintenance.
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.
When you make risky decisions, it can affect the success of your rental business. These are the common blunders a landlord experiences while managing a property. These situations are realistic, and often lead to poor performance of a rental property.