Knowing the right way to manage your rental properties is not always easy. However, there are some common mistakes that can easily be avoided. Here are 7 things to avoid with rental property management.
- No Written Agreement
Written agreements serve as protection for the owner, so it is better to have one that clearly lists the responsibilities of the manager of the property and the renter. Always be sure to have some sort of written agreement when renting out a property.
- Haphazard Agreements
It is common for rental property owners to find a written agreement online and edit the wording to fit their needs. However, this is a very dangerous thing to do. Always meet with legal counsel to help draft your rental agreement. Having the help of legal counsel ensures that your agreement is not ambiguous and also complies with your local and state laws pertaining to property rentals.
- Personally Keeping Security Deposit
Security deposits are a good thing to have, but make sure you do not personally hold the deposit. Instead, set up a trust account to hold all deposits; if you do not set up a proper trust account for the deposit, you may be required by law to pay interest on the amount while you hold the money.
- No Tenant Screening
Keeping your tenants happy is important, but it is even more important to keep your property in good condition. Not having a screening process for potential tenants can lead to having tenants who damage your property or, even worse, simply don’t pay their rent. Have a set method for screening potential tenants, including getting background checks.
- Failure to Communicate with Tenant
Communication is key when it comes to rental properties. This is especially true when the time to renew agreements and leases is growing nearer. It is important to personally check in with your tenants from time to time, as this will make the renewal process much easier. An open line of communication also allows the tenant to inform you of any maintenance that may be required on your property over the course of your agreement.
- Neglecting Routine Maintenance
Emergency repairs cost a lot of money, which is why routine maintenance of your rental properties is so important. Routine maintenance allows you to take care of issues while they are still small instead of needing to take care of larger scale problems.
- Not Having Move-In and Move-Out Inspections
For liability purposes, make sure you personally conduct inspections of not only the condition of a property, but also what appliances are in that property at the time the tenant moves in. You should keep this information in the tenant’s file in order to know (and be able to prove) what damages were caused by them when they move out. Additionally, keeping track of the appliances ensures that the tenant will not attempt to take appliances with them when they move out.