Key Mistakes Property Management Companies Make and How to Fix Them
We speak to property management companies across the country daily so it allows us the opportunity to ask how they are handling their operations and then relay some of their ideas on to you. I recently asked a few companies what they have seen as some key mistakes that they have made.
- Not Charging An Application Fee — Everyone will apply if you are not charging a fee. Also, your screening company charges to qualify your prospective tenant, so it’s appropriate that they pay for this cost through their application fee. Additionally, when you charge the fee you only get serious potential residents and you get paid for your time and effort.
- Not Running Credit and Background Checks — Running credit and background checks helps identify the best tenants for your community by showing accurate credit, criminal, and eviction reports. There are situations that can cause credit issues (i.e. stolen identity) so please be sure to have them give an explanation prior to discarding their file.
- Not Getting The Full Deposit Before They Move In — If they can’t afford it before they move in, then they most likely won’t be able to pay once they are moved in.
- Choosing the Wrong Tenant — Be sure the person you decide on can afford the rent payment, a good rule of thumb is the rent should be about 30–40% of their income.
- Not Maintaining a Stern Stance on Late Fees — Once you give up on collecting the late fee, you will find that more often than not, the late payments will only get worse. Typically the ones you let off the hook will speak to other residents and they too will begin making late payments.
- Not Walking Your Property — Be sure to inspect the property before you rent it and we recommend walking the unit with the new resident the day they move in and make notes of any issues with the property.
- Not Communicating With Your Residents — Keep your residents informed of anything happening on your property and try to talk to everyone if possible, let them know you and your team.
These simple steps can save you a lot of extra effort with new residents and set your investment off on the right foot to get you the best ROI possible.