You want to maximize the profitability of your investment property, which is a common reason why property owners wonder if they can save money on management services. But it’s important to understand that managing your own property could potentially cost more money in the long run. There are several overlooked issues that you should watch out for, because these things can impact your bottom line:
Insufficient Tenant Screening Practices
It can be a disaster if you end up with problematic tenants in your rental unit. A property management company screens tenants thoroughly. But some property owners who take a DIY approach skip some of the most important screening steps like background checks, credit history, and reference verification.
Failing to follow through with these screening steps can result in irresponsible tenants. You might have late rent payments, property damage, and even a high turnover rate. If the problems are severe, it can even result in expensive legal battles. So, a thorough screening process is non-negotiable.
Procrastinating Property Maintenance
Owning a property means that you need to be proactive about spending a bit of time and money on maintenance tasks. Even little things can turn into bigger issues down the road if you aren’t consistent with maintenance.
Eventually, these property issues can cause you to lose tenants because they are unsatisfied with the quality of the property. Additionally, maintenance issues can increase your liability if there are any safety hazards present. A property management company handles all of these maintenance tasks. If you are taking a DIY approach, then make sure to set a maintenance schedule and stick to it. Regular inspections are necessary, and problems should always be addressed immediately.
Policies and Legal Regulations
Every property owner must have clear policies in place, as well as organized tracking for everything. These policies set the expectations for your tenants, which increases the likelihood that you are going to get paid on time and the tenants will take care of the property as agreed. Otherwise, late rent payments can cause cash flow issues and you might run into other issues with damage and improper care of the unit.
When you are setting your policies and practices, make sure to check local regulations to ensure that you are compliant with everything that needs to be addressed. For example, these property laws can be complex and they are changing often. If you aren’t in compliance, then it could lead to fines and lawsuits – or you might even lose your property license in the future.
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Written by Becki Andrus in partnership with iron door manufacturers Abby Iron Doors.