Whether you are a property manager, homeowner, landlord or investor, there are some key property management mistakes you want to avoid. Owning property is a long-term investment with the building, the land and the tenant so planning ahead is important.
Here are some mistakes you should avoid:
Whether you area seasoned investor or a beginner, you are typically better off teaming up with an experienced broker, real estate attorney and other professionals that know the market and the process of buying property. A broker will work to understand your goals in order to find properties that match your needs. Furthermore, purchase contracts are complex legal documents. Both your broker and attorney will explain the fine print and ensure that you pay a fair market price.
Tenant screening is widely considered to be the most important step in protecting your property. A bad tenant is bad for business. Do your due diligence, have the tenant fill out a rental application, collect the fee for a credit report, criminal background check and call to confirm employment.Remember that not paying rent, expensive evictions that can take months to complete, sabotage from bad reviews, and damage to the property are just a few problems that an unruly tenant can cause for your business. It is absolutely essential todo your homework on potential tenants with proper tenant screening.
The last thing you want to find out after you have solidified your deal is that your property has unexpected structural issues, or you are limited because of zoning restrictions or other land-use regulations, or there are problems with the title, for example. This is why it is extremely important to perform due diligence on the property before committing to a deal.
A strong relationship with local contractors can be invaluable! If you have a problem, you want to be able to call them and rely on the job getting done. Shopping around for the best price all the time will just cause you headaches and more time in the long run. So find someone local that has been in business for awhile and knows what they are doing, create a relationship and stick with them.
Trying to save money by using unskilled workers can come back to haunt you. They probably have no insurance, no or little experience, no guarantee on work done.On top of all this no background check, who knows who you are hiring, this could be a huge safety issue.
This might seem like an easy way out but allowing your tenants to do their own repairs could lead to further damages, more repairs and you could be liable for damages or injuries. If someone falls from a ladder or gets injured while hired to do work, and the landlord does not have workers compensation insurance for them, then the landlord could be held personally responsible for paying for their medical bills and loss of income.
Owning property has a lot to do with preventative maintenance. In the short term it will cost a little and in the long term save you much. We regularly hear stories of owners who have, after a long-term tenant moved out, found extensive damage to a unit that could have been easily prevented. It is essential to inspect units (even the rented ones) regularly so that repairs can be done before further damage is done to your building. Depending on the age of the property you can do yearly inspections, bi-annually or quarterly.
Tenants need to have clarity when it comes to the guidelines and your relationship. It’s not enough to just make a phone call or pop-up visit when something goes wrong. Besides verbal communication, have tenant rules in writing. To be fair and enforce guidelines across the board, get signed acknowledgments from each tenant. Signage, verbal communication, and occasional reprimands hold little weight. Have solid proof tenants understand and agree with the rules.
Talk to your tenant 60 to 90 days before the end of the lease to see what their plans are. Also communicate if there will be an increase of rent and if so why. Remember this is a two way street where you want it to be a win-win for both parties.
These are a few things to keep in mind with your next commercial real estate venture. No matter the type of property you own, you can count on the experts at Evanco Realty Advisors for the very best in full-service commercial administration. We provide everything you need to minimize your ownership workload and maximize the return on investment for each of your commercial properties. We provide peace of mind to owners, implement excellent property management services that enhance value for landlords.
Call us today at (619) 814-1688 to see how our commercial property management strategies can help you!
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