Being a landlord can be rewarding work, but the role comes with the prospect of legal ramifications. Today, there are more resources than ever available to a do-it-yourself landlord, but a property manager may have the know-how and expertise that can help you avoid these common mistakes.
#1: Undertake Tenant Screening
The tenant screening process can be one of your biggest challenges. It can be a gateway to the Professional Tenant as well as the potential for discrimination lawsuits. A Professional Tenant is a renter who bounces from rental to rental, using manipulative tactics and exploiting legal loopholes to avoid paying rent. The professional tenant can become a landlord’s nightmare as they start by withholding rent for unnecessary repairs, then escalate to sob stories as to why they can’t pay rent and finally forcing the issue to court.
Because the Professional Tenant knows their way around the legal system, they delay proceedings and force a landlord to provide evidence of quality living conditions. All of this can be avoided with a reliable tenant screening process.
According to The Balance: Small Business, there are seven steps to gaining a great tenant while following the rules and regulations. A third of these steps involve trusting your gut. Common sense moves like a background check, and a credit check are key. However, the rest of the steps involve multiple follow-ups with previous landlords and employers which might be more time consuming than you’re able to accomplish as a single landlord.
Your most significant risk in conducting your own tenant screening is following anti-discrimination laws. Any decent landlord will, of course, want to follow these laws and not accept an applicant based on race, gender, sexuality, or non-violent crimes, but it can difficult to navigate. A property manager, in this case, is a viable solution both for time management and navigating the screening process ethically and legally. An experienced property manager can also spot a professional tenant quickly and deal with them efficiently.
#2: Set Rental Rates
Determining your rental rate may seem an easy task, but it’s based on fluctuating factors. Additionally, it depends on you determining your value as the manager of the property. The fluctuation comes from knowing your market.
Added to that you must factor in renovations, rent collection, maintenance availability, and overall upkeep of the property. A common pitfall of setting rates is landlords severely undervaluing this aspect; it makes them uneasy to assign a dollar value to their services. A property manager may be ideal if you fear you might make this mistake.
Knowing your market can also be tricky. Multiple applications and websites can assist with pulling local property reports, but it also must be combined with an analysis of your competition. Setting rents too high or too low each have their risks. Set the rent too high, and your property will stand vacant. Too low and you risk not making good on your investment and attracting renters that look to manipulate an inexperienced landlord.
A property manager will have the resources to pull reports, stay on top of property tax laws and ahead of the competition. A property manager will also be able to determine the worth of your management services with their prior knowledge from experience.
#3: Resolve Maintenance Issues
Handling maintenance can prove to be expensive, especially if you’re not handy and haven’t made the necessary contacts with reliable and affordable contractors. These days fixing a leaky sink can seem as easy as watching a video online. This method of DIY maintenance may cut it with your personal property but relying on a video, and some tools is putting your investment and your tenant at risk. If you’re smart, you’ll turn to a contractor for assistance but finding the right contractor can take time.
Like any business relationship a trust must be built; with trust comes better service. This is where a property manager may prove essential. A good property manager will have established relationships with a variety of maintenance contractors who are readily available. Additionally, a property manager will also have an easy-to-access, organized, and multi-pronged system of communication for your tenants to reach out about different levels of maintenance needs.
In addition to a multitude of other tasks, a property manager can help you avoid all of these common mistakes. They are your first line of defense as they screen for quality tenants for your property. A knowledgeable property manager will understand the market and how to value their management of the property.
A property manager will keep your rental rates in range of the competition, keep the property full, and get you a return on your investment. Finally, a property manager will have the resources to provide quality maintenance and avoid risky do-it-yourself fixes. If you are interested in having your property managed by Real Property Management Campanas, have more questions, or just want to speak to one of our team members, then contact us online or call us directly at (210) 314-1039 today!
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