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Common Mistakes Made by Managing Your Own Property

Common Mistakes Made by Managing Your Own Property

When you first embark on your rental property ownership journey, you’re enthusiastic, almost excited about it. And rightfully so! Passive income will be flowing soon, you’re improving your asset portfolio, you’re preparing for retirement, or you’re just thrilled to be trying something new. And you’ll be inundated with advice, too. Do this. Don’t ever do that. Whatever you do, follow this format. While you appreciate the potential nuggets of wisdom, you can also become easily overwhelmed and confused. 

While most experts and veteran Lehigh Valley property investors won’t agree on every sound management strategy, they will agree to a few core mistakes to avoid. If you’re stumped about what you should be doing, consider this roster of things you shouldn’t be doing. Managing your own property can be a tall order. And not every suggestion you receive will be specifically applicable to your portfolio position. But everything about your rental property ownership journey will flow much easier if you avoid these common pitfalls.

In no particular order, these are the mistakes you’ll want to stop making right now.

Assuming You Can Handle the Property Maintenance Yourself

In the beginning, you’re looking to trim all unnecessary spending wherever possible. You’ll need residents in place and leases signed before you start seeing income. And to support this objective, you might decide to keep all those maintenance tasks and property repairs on your own to-do list. It would be a costly mistake to do so, though. Fixing a leaking toilet might be well within your repertoire of skills. But tackling a water heater problem, a roofing problem, an electrical problem, or even that leaking toilet without professional knowledge will end up costing you in the long run. Spending seven hours of your time trying to troubleshoot a water heater problem is costing you more than a quick call to the technician who can solve it in one hour.

Becoming Too Close with Your Residents

When you first become a rental property owner and begin developing relationships with residents, you’ll do your best to remain as professional as possible. There is a fine-line balance to understand with resident communication you’ll want to follow. Being too distant or unavailable will only cause friction. But being too friendly or overly communicative can be just as detrimental. There are privacy laws to respect and guidelines to keep, too. Be mindful of what you say, how often you communicate and making yourself available to your residents. Too much involvement, as well as too little involvement, would be a mistake.

Over-Promising Resident Benefits

Another common rental property mistake made by beginner investors involves over-promising benefits to residents. It’s exciting when you sign your first lease, and you can get caught up in this first resident engagement. Don’t be swept in the moment and become overly agreeable about requests and expectations. Stick to your guidelines and lease agreement terms, including any fee structures you have for added amenities. 

Poor Pre-Screening Processes

With so many tasks on your rental property operations to-do list, you might overlook the key strategies for resident pre-screening. It will require extra work to sit down and develop a template application and follow-up process. But without a proper procedure in place, you could be putting yourself in jeopardy. Background checks, employment verification, and reference calls should all be part of the process for every applicant. This consistency in vetting will allow you to make the best lease agreement decisions. Not spending enough time with this process will translate to poor resident experiences, including lost rent and potential evictions.

Over or Undercharging Rent

How you determine your rental rates will play a significant role in how successful you are as a Lehigh Valley rental property owner. Overcharging will result in longer vacancy periods as potential residents look for more affordable options. Undercharging will provide an overwhelming flow of candidates, many of whom you might deem ineligible, and ultimately, you’ll be losing money in time to place candidates and decreased monthly rent collection. You may receive contradictory advice along the way. However, it’s best to stick with the market value and the math. Typically, rent amounts fall between 0.8% and 1.1% of the dwelling’s value.

Mismanaging Deposits and Deposit Terms

Some of the other more common mistakes regarding rental property management involve deposits. You’ll collect deposits from your residents as insurance, protecting yourself from excessive property damage. But in some instances, landlords make the mistake of keeping those deposits for the wrong reasons or using those retained security deposits for the wrong projects. Make sure you work with a legal professional who can help you stay on the right side of deposit management, including what to charge, timelines for returns, applicable projects, and legal terms.

Not Scheduling Routine Inspections

For some first-time property owners, there is a misconception that the DIY approach to maintenance is a cost and time-saving way forward. But managing your property’s condition ongoing, for safety, security, and stability should be left to the professionals. You might be able to respond and tend to a leaking faucet on your own. However, there are major components of your real estate assets that require annual or seasonal inspection and monitoring. Without constant knowledge about the efficiency of the home’s roof, plumbing, electrical, HVAC, foundation, and safety, you could open yourself up to pretty expensive repairs or, worse, resident injury or accident. Don’t make the mistake of taking rental property maintenance into your own hands. Schedule routine inspections with a Certified Professional Inspector who can identify top-priority fixes and concerns. Develop relationships with your chosen inspector, who can also be pivotal in helping you with move-in inspections, move-out inspections, and seasonal inspections.

Not Automating Operational Tasks

A lot of what you do to successfully manage your Lehigh Valley property is going to be time-consuming. So, whenever you find a way to automate something, take it! Many rental property investors make the mistake of doing things the hard way, or often the manual way, and this includes marketing, advertising, bookkeeping, accounting, scheduling, and resident communication. There are slews of automation tools and software solutions out there that are easy-to-use and absolute game-changers in terms of taking back your valuable time. Try some free trial periods with a new scheduling tool. Automate how you collect rent or disburse contractor payments. Automation will make everything you have to do so much more efficient.

Not Working with a Property Management Partner

Instead of tackling all these processes, maintenance, and guidelines yourself, let a property management partner take the reins for you! It would be a sizable mistake to assume you’re on your own with portfolio management and rental property operations. Working with a pro like Axel Property Management means you’ll have the latest trends, the best solutions, and a seasoned expert helping with every aspect of management. In addition to avoiding all the aforementioned common mistakes on this list, property management partners can also help you improve your NOI.

How many of these mistakes do you find yourself making from time to time? Hopefully, these insights are helpful in improving how you’re managing your Lehigh Valley rental property. And, of course, Axel Property Management is just a phone call away when you’re ready to take your portfolio and revenue potential to the next level!