Common Property Owner Mistakes

It’s clear that owning rental property is a strategic financial investment to diversify your portfolio.

But what many owners don’t realize is that the investment comes with the responsibility of managing it.

There’s more to managing a rental property than just collecting rent.

Owning a rental property can be very rewarding, but if you are not careful, it can also be full of costly pitfalls. Some of these mistakes can even cost you your investment.

It goes without saying that the more you know about proper management, the lesser the chances that you’ll make these costly property owner mistakes.

Keep on reading to discover the 7 most common mistakes you must avoid in order to reduce your headaches and to fully capitalize on your investment property.

 

 

1.   Doing everything on your own

New investors often attempt to manage the property themselves. What they don’t know is that doing so usually ends up costing you more in the end.

Owning a property can be easy but managing one can be a stressful and challenging endeavor for someone with no prior experience or an already busy schedule.

The more properties you have, the more tenants you’ll also have. This translates to more tasks, upkeep and work for you.

And without any prior experience or specialized skills, mistakes are bound to happen. These mistakes may have costly penalties and can even land you in court if you’re inattentive to local legislation.

That’s why it’s always sensible to hire an experienced property manager or find a reputable mentor in the field who could help you effectively manage your investment.

 

2.   Getting a company that only does leasing and not management

One of the biggest mistakes that you can make when owning a rental property is hiring a leasing company to manage your investment.

While it may seem like a cost-effective option, it does have its downside.

Companies who only specialize in leasing have no motivation to find you the best and quality tenants.

Their work is done once the lease is signed. This leaves you to deal with stressful tenants on your own.

 

 

Instead, consider your alternatives, like hiring a full-service property management company that already has a qualified team in place.

Especially when you own multiple properties, it can be difficult to handle all the issues yourself (from dealing with tenants to maintenance and repairs).

By hiring a company that offers comprehensive property management services, you know that all of your properties are correctly handled.

You are also assured that they won’t only get you quality tenants, but they’ll also manage them. This frees your time while the daily tasks of managing a property are left to the professionals.

 

3.   Getting a real estate agent instead of a property management company

Real estate agents are specialized in selling homes, not property management.

They usually do not have the systems and the staff in place to be able to manage your property successfully.

Agents cannot give you the management services that are offered by professional management companies. Many are also unaware of the many legalities when it comes to dealing with tenants and properties.

Don’t make the mistake of wasting part of your investment income on an agent, hire a company that knows how to get the job done right the first time.

Not only are you making sure that you are getting value for your money, but you are also guaranteed that your property is being efficiently cared for.

 

4.   Determining the wrong rent prices

Your rent price is wrong if you notice that you have high tenant turnover rates, have rental price complaints or have a high vacancy rate.

Another indication of this is if you notice that your property is not yielding the amount that it should be making.

By not being able to determine the correct rental price may end with you incurring costly losses in one way or another. Setting competitive rental prices is just one of the many advantages of working with a property manager.

 

5.   Not having the proper insurance

Considering the cost of insurance and the coverage that’s needed, many owners choose only to get the minimum amount to save a few bucks.

This is another mistake that most property owners make. Failing to get the proper insurance means that you fail to get the right type or amount of insurance coverage you need to effectively safeguard your investment.

Make sure that you understand the different options available and that you get the right types of insurance with the proper amount of coverage.

That means doing a bit of research about your investment’s location, surrounding climate and risks that could cause potential threat.

It’s always better to be safe than sorry.

 

6.   Failing to be clear and consistent with tenant rules

It’s important that you are clear with your tenants about their lease guidelines and your landlord-tenant relationship. Ensure that everything is in writing, understood and acknowledged by the tenant.

Constant communication and monitoring are important responsibilities of a landlord, as well as being fair with all your tenants.

Another common mistake that landlords make is that some tend to bend the rules for select tenants. They also fail to enforce tenant rules which usually leads to regrettable consequences.

Take time to make sure that your tenants have your list of rules and they should also be aware of the consequences of breaking these rules.

 

7.   Performing repairs and maintenance on your own.

 

 

Maintenance is the landlord’s responsibility to either do or oversee. You need to respond to your tenant’s repair requests quickly and they must be performed professionally.

If you don’t know how to fix something yourself, don’t make the mistake of cutting corners by going the DIY route.

It could cost you more in the long run when a professional is forced to fix a problem that has gotten worse because it wasn’t handled professionally the first time.

Avoid any potential costly lawsuits by taking care of your properties professionally. Make sure you hire competent specialists to fix any repair and maintenance issues, so you don’t neglect your property or your tenants.

 

 

Owning a rental property means taking responsibility for it. These are common mistakes that beginning property owners should avoid. Whether you own just one property or a hundred properties, remember that you own a business and that you should treat it as such.

Hiring a reputable and experienced property management company will allow you to grow your investment portfolio. Determine if you need a property manager, then find the right one to work with you!