7 Common Mistakes in Property Management and How to Avoid Them

56 percent of property managers are also the landlords of the building they’re managing.

These people choose to combine these roles to cut the cost of hiring a property management company. Unfortunately, despite claiming to be property managers, they have no formal training. And due to the lack of expertise, they’re bound to make several costly errors.

So, if you’re one of these real estate investors, what can you do to mitigate this risk?

Read on to uncover seven common mistakes in property management and how to avoid them.

1. Skipping Tenants Screening

As the property owner, it’s stressful to have several vacant units in your building. So, to fill these units fast, you’re likely to skip tenants’ screening. You feel this is an unnecessary step that makes it hard for you to attract new tenants quickly.

The problem is that skipping tenants screening leads to you renting your property to the wrong people. These tenants have a history of failing to pay the rent on time. So, in the long run, you may be forced to evict such tenants and end up incurring more costs.

So, adopt a sound property management strategy of screening all potential tenants. Understand that having the right people is key to reducing tenants’ turnover.

2. Ignoring Routine Property Inspection

Many property owners find it tiresome to conduct routine property inspections, and that’s why they skip it. They claim that the tenants will contact them if there is a problem. Yet, most tenants only call the landlord when a huge problem needs urgent repair.

So, by adopting this strategy, you’ll spend a fortune on property repairs that could’ve been avoided with regular inspection. That’s why despite having a busy schedule, you need to develop a property inspection routine. The idea is to inspect the water pipes and drains to detect problems early when they’re inexpensive to fix.

3. Allowing Tenants to Undertake Property Maintenance and Repairs

Some landlords allow tenants to carry out property maintenance and repairs to cut costs. Yet, this is a fatal mistake that often leads to more problems. For one, the tenants are not trained, so they’ll do shoddy work.

Besides, the tenants are likely to get injured when doing the repairs, and you’ll be liable. So, you’ll be compelled by the law to compensate them for the injuries they suffered. To avoid all these problems, strongly discourage your tenants from doing any property maintenance and repairs.

4. Opting for Manual Property Management

As a new real estate investor, you may not see the need for property management software. You feel that you only have one property at the moment, which you can manage manually. Besides, you fear it’ll take you forever to learn how to use property management software.

Unfortunately, having this perception makes property management stressful. It’s a nightmare tracking rental payments manually. Besides, you’ll have a hectic time manually preparing the property financial statements.

So, to avoid all these stresses, it’s wise to invest in the best property management software. You want to have a tool that helps you track rent payments easily. Also, this tool will generate great financial reports which guide your property management decisions.

5. Ignoring Rental Property Refinancing Opportunities

If you’re like most other investors, you had to take out a rental loan to purchase your current property. So, part of the proceeds you earn goes to paying off this loan. The problem is that you’re unhappy with your current rental loan terms, yet you’re doing nothing.

You feel that the loan is taking a huge chunk of your rental income, and you’re left with inadequate money. However, you’ve been ignoring rental property refinancing opportunities despite these problems. You argue that you don’t know much about rental property refinancing, and you fear making things worse.

Use resources like lendsimpli.com to know more about rental loans to overcome this challenge. You want to know how these loans work and how to apply for a rental property refinance.

6. Working With Unlicensed and Uninsured Contractors

To minimize property maintenance and repairs expenses, it’s tempting to hire an unlicensed and uninsured contractor. You feel that all that matters is that these contractors have the right skillsets for the job. Yet, this turns out to be a fatal property management mistake in many instances.

Most likely, the unlicensed contractors lack the essential credentials and ignore different regulations. So, these contractors will end up offering low-quality services that don’t meet your needs. Besides, by hiring uninsured contractors, you’re bearing unnecessary risk.

You’re liable if these contractors are injured when working on your property. So, to avoid all these problems, only hire insured and licensed contractors.

7. Failing to Enforce Tenancy Agreement

Although they have tenancy agreements, most landlords struggle to enforce them. So, they give their tenants leeway to ignore vital clauses on the agreements. When tenants start going against the tenancy agreements, you’ll have a hard time managing the property.

Some may sublet their units which is against the agreement leading to congestion in the property. Others may undertake major renovation without your consent which disturbs other tenants. So, to avoid these troubles, you must learn how to enforce the tenancy agreement.

Understand that when the tenants adhere to the tenancy agreement, they simplify your work as the property manager.

Boost Your Revenues by Avoiding Mistakes in Property Management

To become a successful real estate investor, you must avoid the above mistakes in property management. So, start by learning how to properly screen potential tenants. Next, enforce your tenancy agreement to simplify the property management work.

Also, only deal with licensed and insured contractors when undertaking property maintenance and repairs.

For more amazing Property Management, Investing, and Insurance tips, check out our other blog posts.