DIY Property Managers sometimes make mistakes in managing their own rental properties. Below are 10 of the most common mistakes and ways to avoid them.
1. Limited Marketing
Many DIY property managers list their properties on just a handful of websites when posting their properties for rent. Craigslist, and other websites such as Zillow may be the only places where a potential tenant can find your property. To get the largest potential pool of applicants and to rent your property faster, make sure that your property is posted on all of the major real estate and property management websites, portals, and apartment listing sites in your market.
2. Poor Background Checks
One of the best ways to avoid having a problem tenant is to do a good job of screening applicants upfront. Many DIY property managers do not do a credit check when screening their prospective tenants. A good background check process will include not only a proper credit screening, but also a criminal history check, and a review for any previous evictions or foreclosures.
3. Not Completing a Rental Agreement and Move-in Condition Report
Some DIY property managers use a self-made or outdated rental agreement. Others fail to complete a thorough move in condition report. Either of these mistakes can cause challenges when attempting to enforce the lease or claim deductions from the security deposit at move out.
4. Not Conducting Property Inspections
Many DIY property managers only conduct inspections at move in and move out. Sometimes a property will not be inspected for several years. This often causes delayed maintenance issues and can allow small repairs to become big problems as time goes on.
5. Lax Lease Enforcement
Inconsistency in enforcing the lease can be another cause for trouble. Allowing late rent payments contrary to the lease can eventually lead to collections issues. All terms of the lease should be consistently enforced.
6. Stagnant Lease Rents
Sometimes DIY property managers will not increase rents in an effort to keep a good tenant. While this strategy may help in the short term, in the long term it could cause greater challenges. Trying to increase the rent to market rates after it has been artificially low for years can be difficult. Gradually keeping up with the market is generally better for everyone.
7. Violating the Landlord Tenant Code
DIY property managers unfamiliar with their local landlord tenant laws often make mistakes that end them up in court. Not providing proper notice to vacate, and improper handling of the security deposit are two areas that are often overlooked. It is vital for anyone managing a property to know the applicable laws in your state and county jurisdiction.
8. Doing Unfamiliar Repairs and Renovations
Trying to do plumbing, electrical repairs, or renovations to your rental home on your own, especially when the project is unfamiliar can be a recipe for disaster. Make sure to use licensed professionals when your property needs repairs that are beyond your comfort level.
9. Improper Budgeting
Trying to pay the mortgage with the same month’s rent payment is a juggling act all DIY property managers should avoid. Make sure to have your mortgage paid at least one month ahead. Also, make sure to have at least 1.5 to 2 times the monthly rent set aside for repairs.
10. Not Accounting For Your Own Time
Lastly, DIY property managers need to consider the value of their time when managing their own rental properties. If you manage your own properties in order to save money, but aren’t accounting for the value of your time, you may actually be losing money in the long run. Take into consideration the value of your time when managing your own rental property.