As with other businesses, common property management mistakes in real estate can be costly in both time and money. If you are a landlord or a property owner seeking help from a property management company in Orlando, you should be aware that hiring the wrong company can lead to some mistakes. These errors often occur when you are not dealing with real ethical professionals.
Of course, problems can also arise if the landlord chooses to perform all the tasks by himself. Maintenance, making repairs, and other things related to managing a property can become problematic if the person does not know what he or she is doing.
The following is a list of the most common property management mistakes that you should know about:
Overpaying for Property Management Services
If you have decided that hiring a property management company will help you leverage your time and resources, the next step is to find a reputable property management company in Orlando. Remember, not all property management companies are the same. Read through your contract carefully and watch out for terms that can be easily missed.
High cancellation fees, vacancy fees and erroneous charges all happen way too often in the industry. Sometimes landlords fall for really low monthly rates only to find that they’re stuck with extremely exorbitant cancellation fees and poor service.
Do not simply pick the company based on online reviews as they can be fabricated. And if possible, pay a visit to their real estate office. Does their physical office match their online presence? We have run into too many companies that have really great professional looking websites which makes it seem like a large reputable business, but their physical office is a spare bedroom in their own home or a tiny office that's severely understaffed to handle your home.
If you choose to manage the rental property yourself, you’ll need to choose your contractors carefully. When hiring contractors in Central Florida, it can become a problem because many contractors will just charge with whatever they want for the job. You cannot ensure fair pricing unless you receive several bids for your repair or maintenance project.
Instead of just settling for the first option available, find the one that offers the best value. If possible, choose the contractor that agrees to an hourly rate that you have specified. As much as possible, you should talk with the people who will do the job ahead of time, so that you know how much you should pay them. If it is not reasonable, look for another contractor.
Saving Money by Going for Unskilled Workers
We all want to save money, but one of the common property management mistakes is that landlords hire workers who do not even know what they are doing. The reason behind this is that these people charge a much cheaper rate. Unfortunately, this strategy will only backfire in the long run.
For example, if you pay a contractor in Orlando for $15 per hour and it takes him 10 hours to complete a project, the job will translate to $150 in expenses. Meanwhile, hiring an expert worker for $50 and he takes only two hours to finish the project, it will only cost you $100.
Plus, you get the reassurance that the result is of a much higher caliber than with the previous worker. It can even save you more money because it is possible that you will not require more repair work in the near future.
And most of all, if your project requires a licensed contractor, choosing one without the necessary license will only hurt you in the long run. Failure to obtain the necessary permits will also cause you to face fines and penalties from Seminole or Orange County.
Saving Money Through DIY
If you have the proper skills in fixing the problems on the property, you can undoubtedly save a considerable amount of money that you will pay for labor. You do not have to call a contractor to do building and maintenance work.
The problem here though is that time is crucial, and most frequently, the job is not completed right away. You may have saved on labor costs for your vacant unit, but it took you longer than it would for the pros to finish the job. If you save $800 because you chose to perform the task on your own, you also lose $1,300 in the rental price because you did not get to fill the vacancy immediately.
In this case, you lost more money. If you hired professional workers to paint the walls and replace flooring, they could accomplish these tasks in just a few days. After that, you can have the unit rented.
Remember, if you do your own repair work, make sure you are licensed through the state for the specific job. You are personally liable for any injuries that may occur to the tenants in the future, if it was determined to be a result of faulty workmanship. The money you save in the short run may end up costing you more if you were to face a potential lawsuit.
Tenants Repair the Property
It is sometimes common to allow the tenants to do the repair and just deduct their expenses from the rent. Unfortunately, you are exposing yourself to significant risk. If that tenant gets injured, such as he or she falls from the ladder, you could be responsible for the medical bills.
And again, if the tenant is not licensed for the specific work, you become personally liable in the future for any issues that may arise, and when you choose to sell your home. Permits must be obtained for any work in your home that requires it.
No Regular Inspections
Through inspections performed regularly, you can prevent further damage to the rented unit. It is a frequent occurrence when a long-term tenant moves out, and the landlord just finds out there is already extensive harm to the building. Such damage would have been easily prevented if he checked the property recurrently.
Deferring Maintenance Work
It is no secret that doing maintenance work would add extra expenses. Some landlords believe in “if it is not broken, do not fix it” mentality. However, deferred maintenance can be costlier in the long run, while lowering the value of the property. Additionally, with numerous options for rental homes in Central Florida, the tenants can quickly move to another place where they do not have to worry about repairs.
Not Screening Tenants Properly
Making sure you have well qualified tenants is considered the most crucial step toward protecting rental property. Irresponsible tenants are bad for business since they create problems, including not paying the rent on time, damaging the property, and giving you upset neighbors.
Evictions are expensive and may take months to fulfill. Therefore, proper tenant screening is a must. If you do not know how to do this, you can ask for the help of a property manager who knows how to select a dutiful tenant who will not give you headaches.
Overcharging or Undercharging Rents
When you specify the rental price of your property, emotions can take over most of the time. You can be biased about it so you overcharge. Meanwhile, some owners do not want to lose tenants, so they settle for a lower price.
Whether you are asking for too much or too little, you can only correct this mistake with market research. You should have an honest look at your property, which you should view as a business. Compare your rent with the other properties that are similar in your local neighborhood in Orlando. Think about the amenities you offer and if the property is valuable to the tenants. These factors will allow you to determine how much to charge to achieve fair pricing.
To make sure you neither undercharge nor overcharge on rent, a property manager can help you figure out the price that is not only right for your tenants but also for your property and your business.
Other common property management mistakes include not communicating properly with the tenants, not knowing how to manage them (leniency), and having a chaotic system. All these issues can easily be prevented if you hire a professional who understands and has the knowledge in handling your rental property.
The property manager will find a way to come up with a fast and easy solution to your problems, whether it is related to maintenance, screening tenants and keeping them, or evicting frustrating ones. Additionally, you do not have to worry about storing documents because property managers use a scalable system that offers several services, including a convenient payment system for renters and creating an online management portal for the owners.
If you would like additional assistance with your property, please feel free to reach out to us at anytime. Contact American Dream Homes, Inc.