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Top 5 Property Management Mistakes
April 17, 2021

Top 5 Property Management Mistakes

Property management can be a rewarding investment, but all too often property owners don’t realize how complex this investment can be. Property management often involves detailed agreements and a diverse clientele, which means that there is a lot of room for error. Chances are, you don’t want to learn the hard way how property management mistakes can quickly make a dent in your budget. Avoid these common property management mistakes from the beginning to reduce your costs and your headaches.
Mistake #1: Not screening tenants
Though the risks are high, it is not uncommon for landlords to bypass screening new tenants. Unfortunately, there are tenants that know how to exploit this trust, and will inevitably cause you months of grief. Though paperwork can be a pain, it’s nothing compared to the financial losses you can potentially suffer.
Solution: There is no way to tell whether or not an applicant is trustworthy without the proper background information, which is why a tenant screening is always necessary. Have the potential tenant fill out a rental application, request a criminal background check, collect the fee for a credit report, and call to confirm their employment. In addition, be certain to verify the applicant’s identity by getting a copy of their driver’s license, passport, or other valid form of identification.
Mistake #2: Failing to do a routine inspection of your property
One of the most important parts of investing in a property is property maintenance. A lot can happen to a property between tenants, from minor issues such as a cracked window or flaky appliances to more serious concerns that can influence a tenant’s safety such as a faulty smoke alarm or malfunctioning HVAC.
Solution: One of the best ways to catch these problems before they become worse is by doing a routine inspection of the property. Not only will an inspection protect you from any potential financial liabilities, but it will also ensure the safety and comfort of your tenant. In order to complete the most thorough inspection possible, take along a notepad, printed checklist, or digital camera to document any problems. Depending on the age of the property you can do yearly inspections, bi-annually, or quarterly.
Free Guide: Learn how to earn 5% more for each listing with this free checklist.
Mistake #3: Having weak documentation
Conducting efficient property management practices all rests on the details. It’s likely that you will encounter tenants who will try to make you look bad by fabricating stories or twisting your words, even when it’s the tenant who broke the lease agreement. Having weak documentation or lacking the proper written agreements is often the cause of these disputes.
Solution: Constructing solid, written agreements and thorough documentation will allow you to avoid costly misunderstandings with tenants. This includes more than just a lease agreement. You should keep a written record of all aspects of your business interactions with your tenant such as late fees, rent due dates, pet policies, notations regarding face-to-face and phone conversations, and any other property management information. Having strong documentation will keep both you and your client on the same page.
Mistake #4: Discriminating against clients
One tenant will never be the same as the next. It could a single mother, a growing family, a college student, a senior, or a single professional. Whatever the case may be, it is neither acceptable or legal to discriminate against potential tenants due to their personal characteristics or lifestyle choices.
Solution: Being aware of fair housing laws is perhaps one of the best ways to avoid discriminating against potential tenants. It is important that you use objective criteria such as credit-worthiness or rental history, rather than judge them by categories such as age, race, religion, or sexual orientation. There are certain questions you may have to ask regarding some of these categories, so if you are declining a potential tenant be certain that you always use a credit or background check to justify the reasoning behind your decision.
Mistake #5: Not enforcing late rent policies
As a property manager, it is essential that you develop the right habits with your tenants. You are not doing yourself or your tenants any favors by allowing them to bend the rules concerning their rent. In fact, being lax about rent policies may cause your tenant to develop poor payment habits which could continue throughout the duration of their lease.
Solution: You must take on the position of the enforcer in your relationships with your clients. It is important that you confront your tenant as soon as you determine that their rent is overdue. Establishing your authority is particularly important at the beginning of the manager-tenant relationship, so as to discourage repeat behavior. This includes implementing late charges and, if necessary, starting the eviction process.

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