There is no such thing as the perfect property management company. If you are reading this, you probably know that already, but it is worth mentioning again.
Many companies out there promise to manage your rental property for a low cost or provide an excellent service, but in the long run, they may not be worth their salt.
Do your research beforehand to ensure that the common mistakes you want to avoid aren’t made by the company you choose. Here are some common mistakes that most homeowners make when managing their rental property.
What Is Property Management?
A residential real estate contract is a legal agreement. This agreement describes:
- The rights
- Obligations
- Responsibilities of both you as the homeowner and the homeowner’s manager
The manager owns the rental property and is legally responsible for its:
- Operation
- Maintenance
- Any safety or health problems in the building
The homeowner is in charge of the property daily, and they are responsible for renting the unit and paying the mortgage, taxes, electricity, and other bills.
Mistakes of Property Managers
Central to the proper and efficient management of a rental property is understanding the role of the property manager. They oversee the property, however, mistakes ensue if the company isn't of quality.
Letting the Property Get Past Disrepair
As you begin managing your rental property, you must be stringent about letting the property get past default condition. This is when a rental property does not meet current code requirements, needs repairs, or is substantially in disrepair.
In most real estate situations, tenants are allowed to “opt-out” of paying the required monthly rent if a property is not in a state of good repair. It is the homeowner’s responsibility to ensure that the rental property is habitable.
This should be done before the property is advertised as being available for rental. You should also consider some upgrades and repairs to increase the attractiveness of your property to potential tenants.
Failing to Improvement Property Security
When selecting a property management company, understand their policies and procedures for certain things. This includes “improvement” or “renovations.”
Some restrictions may apply. Although it is nice to think that the property is in tip-top shape, most rental properties have problems that need fixing. It is the responsibility of the property manager to fix these problems, not the homeowner.
Hiring Unqualified Staff Members
A reliable and competent staff member is crucial to operating a rental property. In most cases, you will want an agent on retainer who will work on a contractual basis with you.
Some management companies contract out part or all their staff members to work for other companies. This can be a bad idea in several instances.
First, you want to ensure that the people you hire have the necessary skills and experience to run your rental property. Some management companies may be understaffed.
This means they have difficulty recruiting and keeping quality staff members.
Property Management Mistakes to Avoid
As you can see, plenty of common mistakes can be made when working in property management. Make sure you do your due diligence when choosing a property management company to work with.
Ensure that the management company you select has the proper qualifications to manage your rental property. Are you still searching for the right company to work with?
