Expanding your real estate portfolio is a goal shared by many property owners, with 40 percent planning to do so in the next two years. However, to ensure successful growth, it’s crucial to avoid common mistakes that can hinder your progress.
In this blog, we will examine 10 common mistakes that cost landlords and property managers both time and profitability.
1. Neglecting Established Processes
Many landlords fail to recognize the importance of organization and systems in their real estate businesses. To thrive in this industry, it is essential to develop repeatable processes that can run smoothly in the background. One common example is rent collection.
An inefficient landlord may rely on traditional methods of collecting rent checks, which involve collecting them manually and making a trip to the bank to deposit them. On the other hand, a savvy landlord with a smarter system in place automates the rent collection process online. This not only saves time and effort but also ensures a regular and consistent flow of money into their account. From rent collection to maintenance requests to end-of-lease paperwork, establishing efficient processes will not only address organizational issues but also enable you to invest in new projects and scale your real estate business.
2. Failing to Build a Network of Vendors
Being a landlord may feel like a one-person job, but managing a property requires a reliable and skilled team of vendors. Relying on vendors who frequently show up late or cancel last minute wastes valuable time that could be better spent elsewhere.
To avoid this mistake, it’s crucial to have go-to partners for various tasks, such as plumbing issues, lawn care, appliance maintenance and repair, electrical problems, and HVAC services. Instead of constantly searching for the best-priced service for each task, focus on building relationships with vendors who consistently deliver quality work. Over time, this can help you avoid the cost of fixing shoddy repairs and potentially negotiate lower rates for recurring services. If assembling a trustworthy vendor team seems challenging, consider partnering with an established Property Manager in NYC who already has a stellar team in place.
3. Neglecting the Tenant Turnover Process
One common mistake is selecting the wrong tenants for your rental property. This can result from rushing the tenant selection process, not interviewing enough candidates, or ineffective advertising. To attract the perfect residents, consider implementing these simple steps during tenant turnover:
1. Prepare: Reflect on your experience with previous tenants or, if it’s a new property, consider what the property has to offer prospective tenants.
2. Fix What’s Broken: Ensure your property is in optimal condition before showcasing it. Update paint, refresh caulking, enhance curb appeal, and address any landscaping needs.
3. Advertise: Take quality photos and create a compelling listing to showcase the space. Advertise the property in multiple locations to reach a wider audience.
4. Set Clear Expectations: Clearly communicate your expectations in the listing. If you prefer long-term tenants or have specific requirements for noise levels, make it known.
5. Perform Comprehensive Screening: Conduct interviews and run thorough background checks on your final candidates. If tenant turnover remains high, consider reviewing our post on “5 Ways to Find and Keep Great Tenants” for potential blind spots in your selection process.
Poor tenant service often leads to high turnover rates. Ignoring pressing problems or making it difficult for tenants to reach you creates a perception that tenants are burdens rather than valued residents. While this may temporarily reduce calls from tenants, it also increases the likelihood of them searching for a new place as soon as their lease is up. It’s essential to prioritize tenant service and be easily accessible.
5. Neglecting Regular Maintenance Checks
Constantly reacting to problems instead of proactively growing your business is a frustrating experience for landlords. Maintenance is an area where problems often arise. To avoid reactive maintenance, prioritize regular inspections and allocate dedicated time for property checks and preventative repairs. By doing so, you can address issues before they become emergencies. Our Go-To Maintenance Guide is an excellent resource to help you get started.
6. Implementing Complicated Technology Solutions
While technology can be beneficial, some landlords make the mistake of investing heavily in unnecessary, overly complex systems. Upgrading and troubleshooting these systems can consume valuable time and resources. Instead, conduct thorough research before implementing new technologies and be realistic about what each unit requires. Simple and reliable tech solutions like automated rent collection and online maintenance requests can add value without overwhelming complexity.
7. Lack of Communication
Contrary to assumptions, tenants appreciate regular communication from their landlords. Email reminders for rent payments and notifications about upcoming property maintenance are well-received. Many of these messages can be scheduled and automated, provided you remain attentive. Maintain open lines of communication with your tenants, promptly respond to their requests and concerns, and establish clear policies and terms in your lease agreements to prevent disputes and provide a course of action when issues arise.
8. Falling Behind on Bookkeeping
Meticulous record-keeping is essential for landlords and property managers. It can be easy to neglect bookkeeping when faced with maintenance requests and occupancy challenges. However, it’s crucial to track your profits meticulously to determine the effectiveness of your efforts. Well-documented finances also Facilitate Management NYC, enabling you to expand your company or invest in new properties by making informed decisions based on your performance.
9. Lack of Knowledge on Fair Housing Laws
Dismissiveness or ignorance of fair housing laws is a major mistake. While exploring the Fair Housing Act in detail is beyond the scope of this article, a general guideline is to highlight the value of your property and amenities in your advertising to attract a wider range of applicants. Implement a fair and transparent screening process to find the right tenants while complying with the law.
10. Treating Real Estate as a Hobby, Not a Business
Whether real estate is your side hustle or your full-time job, it’s vital to treat it as a business rather than a hobby. Property management demands significant time and consistent effort, especially when it comes to tenant relations. Regardless of your real estate venture’s size, adopting a business mindset helps you prioritize tenant requests. handle maintenance issues promptly, and ensure your attention is focused on the success of your enterprise.
By avoiding these 10 common mistakes, even experienced rental owners can maximize their real estate ventures’ potential. Implementing the suggested solutions will contribute to smoother operations, increased profitability, and ultimately, sustainable growth in your rental business.
How Citadel Property Management Corp. can help landlords for property owners?
In navigating the challenges and avoiding common mistakes in property management, partnering with a trusted and experienced property management company. Citadel Property Management Corp. can significantly benefit landlords and property owners. Citadel Property Management Corp. offers a range of services tailored to meet the specific needs of landlords, including rent collection, maintenance coordination, tenant screening, and property marketing.
By entrusting the day-to-day operations to a professional property management team, landlords can free up their time and resources to focus on strategic growth. while ensuring efficient processes, reliable vendor networks, thorough tenant screening, and adherence to legal requirements. Citadel Property Management Corp. brings expertise, industry knowledge, and a track record of success to help landlords maximize their rental property investments and achieve long-term success in the real estate market.