If you’re an owner of a rental property, you want your real estate investment to make money. To some, it may seem like an unnecessary expense to hire a property manager. How hard could it be to collect a rent check every month? Why pay someone to do things you could easily do yourself, right?
Below we list issues that can happen without the knowledge and support of a property management professional.
1.) Rent doesn’t reflect the market
Owners unfamiliar with market rates for comparable units may grossly undercharge the cost to rent their properties, ultimately shortchanging themselves. Conversely, someone who sets rent rates far too high for the market area won’t receive as many queries. Finding the sweet spot for pricing requires thorough expert analysis is key.
2.) Advertising on Craigslist or laundromat bulletin boards
Without a vast, syndicated distribution list, the net an owner casts to catch a tenant shrinks exponentially. It may take longer to fill a vacant property, and the quality of applicants may go down, as well. These sites are also where all the professional con-artist and scammers reside.
3.) Loose guidelines to screen tenants
Without a strict screening process for potential renters, an owner may allow riskier individuals to sign a lease. Credit scores, rental history, and references help screen out less-than-desirable applicants, but they also take time and energy. This is where a tenant management company is key to your success!
4.) Maintenance and repairs occur happenstance
Without a process for tenants to request necessary repairs or scheduled maintenance, the odds of more trouble occurring increase. Missed maintenance turns into little problems. Little problems left unchecked turn into bigger issues. Big issues are expensive, unsafe, and illegal.
5.) Renters smoke in house or conduct other unsafe activities
Owners may prefer that their tenants not smoke in the house or set a trampoline in the backyard. Without clear rules clearly outlined in the tenant/landlord agreement—and enforcement of those rules—tenants have no ramifications for improper behavior. This leaves the owner exposed to expensive clean ups or potential lawsuits.
6.) Illegal activities occur on property; police become involved
A landlord can become responsible for repeated bad tenant behavior. Without periodic inspections or close contact with neighbors, a property owner loses touch with what is happening on his or her investment properties. This increases the odds of behaviors that attract the wrong kind of attention.
7.) Unauthorized pets (or people) also take up residence in rental home
Does the lease specifically ban pets? Does it clearly prohibit long-term guests or subletting? Many times, language in a contract between landlord and tenant is either too vague or nonexistent. Even if it does explicitly outline restrictions, landlords have a difficult, and often expensive, road to removing unauthorized creatures or squatters.
8.) Rent in arrears with no consequences
Without a clear outline of what happens if a tenant falls behind on rent, motivation to be “on time” with payment falls. Enforcing late fees and posting for eviction aren’t fun. A landlord may be tempted to wait and see if renters will turn things around on their own. But without consequences for their actions, why should they?
9.) Tenants fail to complete basic maintenance, creating bigger repairs
Leaving trash out or not changing air conditioning filters may seem like small annoyances at first. But when an HVAC unit fails or pests infest a property, these annoyances become costly health hazards for the owner.
10.) Emergency calls come to owner… even when they’re not emergencies
Some tenants, without proper guidelines on when to call the landlord, will over report “emergencies.” If the owner is out of town or otherwise cannot be reached, tenants may call their own 24-hour emergency service and stick owners with the bill. Even for something as simple as replacing a flapper ball on a toilet.
11.) Investment properties fall into disrepair, making unsafe environment
Without frequent touchpoints, small issues can become bigger ones. For instance, let’s say your tenant may not notice a leaky pipe. The problem doesn’t fix itself, and you remain unaware of the growing problems, too.
12.) Enormous legal fees to evict deadbeat tenant
If a landlord needs to evict tenants, hiring an attorney for court filing gets expensive. Without clear documentation in the lease agreement and actions the landlord has already taken, owners may have a hard time finding someone to represent them.
13.) Tenants trash the place upon move-out
Upon moving out, disgruntled tenants can cause thousands of dollars of damage. Running water, electrical work torn out, and holes in walls happen all the time. Seeking restitution can run nearly as expensive as the cost to repair the damage itself.
Actually, if you think about it, none of these things have much to do with luck or lack thereof. Without proper supervision of your investment properties, and if you’re not treating a rental home like a business investment, things can go sideways, and this happens pretty quickly.
Bottom Line
If you have been considering hiring a trusted property manager lets connect and see how we can assist you with your investment property.
