For investors who truly prefer the DIY approach, managing a property for rent is one way to cut some expenses. Investors who end up buying a home or receive one through family or friends might believe that managing day-to-day operations is easy. This list of the 4 self managed investment property mistakes can be used to help prevent disasters from happening to new real estate investors.
Top 4 Rental Property Management Mistakes
1. Lack of Tenant Screening
In the world of renting homes for profit, the income that is generated comes from men and women who pay monthly to rent a property. Some self managers who go at the process alone can have relaxed screening procedures. This means renting to friends, families or people who have histories of job loss or layoffs.
To prevent issues with screenings, using a professional property manager capable of screening backgrounds of renters is always the best option to make sure profits are kept as high as possible.
2. Ignored Phone Calls
Tenants who pay for a monthly lease are often good people who choose to rent versus buying a home. There are times when tenants can be a nuisance and complain about every minor detail. Property owners who ignore phone calls due to a fear of spending time or money making repairs can decrease rental income. Keeping tenants happy is always a priority regardless of personal feelings towards tenants.
Setting up a time and place to return phone calls is an easy way to make sure that people are kept happy while under a lease agreement.
3. No Contractor Diversification
Repairs are often required during the ownership of a home in the U.S. Natural deterioration of materials and regular tenant turnover can cause damage to a home. A self manager might prefer to use a friend or family member to help provide upkeep to the property.
By diversifying contractors for a property, specialists can be obtained for nearly any type of repair. Hiring the right plumber, roofer, painter or pest inspector will always pay off in the long run.
4. Accepting Late Payments Without Recourse
The best background checks and tenant screening process might never stop tenants paying late. The loss of a long-term job, medical expenses or other disaster can cut off regular income normally used by tenants to pay for rent expenses. Self managing a property and accepting late payments with no recourse can be an ongoing problem.
Using a property management company that specializes in payment collection can be a big help. The small costs paid each month to ensure a job well done will often prevent lapses in rental revenues.