Property management is rewarding in so many ways. First, it’s a career path that allows you to live with and serve people. Secondly, it helps you develop transferable life skills such as organizational and communication skills. Thirdly, a career in property management offers the mostly elusive work-life balance that many working citizens seek. Property managers work flexible hours and without round-the-clock supervision. Fourthly and most importantly, property management opens up the real estate industry for you to explore, earn a livelihood from, and invest. On top of getting insider real estate information, you can also earn a decent income which you can later invest in the industry for a steady passive income.
But then there’s a handful of challenges to becoming a successful property manager. For starters, you have to deal with difficult tenants and demanding property owners. That’s on top of having to meet complex accounting requirements, legal obligations, and other regulatory requirements. Sometimes you will be required to attend to tenants’ emergencies and maintenance requests during late hours, weekends, or during the holidays.
To be effective as a property manager, it’s best to pursue property management certification programs. That will help you understand every nook and cranny of property ownership and management, as well as real estate laws, regulations, and demands within your local market. That done, be sure to avoid these costly property management mistakes that many budding new property managers make:
- Poor marketing practices
To succeed in the modern property market, you must attract high-quality tenants, improve the visibility of vacancies, and build trust with potential tenants. You can only achieve that through deliberate, proactive, and precise property marketing. But then, marketing can be too tedious, time-consuming, and expensive. That’s why many property managers opt to forego it and instead cross their fingers and hope for miracles. Unfortunately for them, miracles in business are hard to come by.
Property marketing often involves staging your unit, sharing appealing visuals (photos and videos of the property) on social media, and placing ads in real estate magazines/websites. Here’s what you must do in order to run successful marketing campaigns:
- Invest in high-quality professional photos and videos. Images that are blurry, poorly lit, low-resolution, and whose camera angles are haphazard may prove counter-productive.
- Work on your digital presence. This means ensuring that your website is user-friendly and optimized for search engines. Your social media platforms should also be professional and active.
- Take advantage of all online listings and property portals available to you. Don’t limit your listing to a single platform.
- Be proactive in shaping your property’s online reviews and ratings. You can do this by incentivizing existing tenants to share positive reviews on different online platforms.
- Make sure that your property descriptions across the internet are truthful, honest, and catchy. You want the description to do justice to your property- not to undersell or oversell. You should also avoid vague, technical, cliche, or generic language. Always be specific when describing the property’s unique features, amenities, or location.
- Identify your ideal tenant and target him/her with all your marketing efforts. Find out where he/she lives, the social media platforms he/she is on, and the marketing language he/she understands best.
- Regularly review your competition and the local market to ensure that your pricing is always within reasonable margins.
- Incompetent routine inspections
What makes routine inspections incompetent?
- Cramming too many inspections in a day. This necessitates speed and leads to unwanted burnout. It also forces you to take shortcuts, overlook important details, and make unnecessary improvisations. It’s important to create a schedule in order to space out inspections and ensure that you’re thorough all the time.
- Overlooking the importance of condition reports and photos, leaving your property vulnerable to costly damages. You need to work with tenants to ensure that the property is in the best possible condition. Most importantly, you need to keep updated photos and other relevant condition reports in your file for reference.
- Allowing your good relationship with a tenant to be your blind spot, so you end up allowing them to breach some rules.
- Allowing repair and maintenance requests to pile up, which can easily get you overwhelmed.
- Not clustering your properties by geographic location. That leads to time wastage because you’ll be driving all around the town attending to different properties. Clustering properties allows you to inspect properties within the same geographic clusters at the same time, before moving on to a different cluster.
- Not reminding tenants of the date and time of the inspection. You should send an SMS and call them a day or two before the inspection so that they can accommodate you in their schedules.
- Being too concerned with issues that don’t affect the rental property directly, e.g. how clean the sink is. You should know your boundaries and work within those boundaries.
- Treating tenants as second-class citizens during inspections. You have to respect their home and treat them with respect because, technically, on top of being humans like you, they’re also your employers.
Note: If you’re a landlord looking to take your property inspection to the next level, it’s best to work with trained professionals. Trained property inspection experts, such as these experts in residential property management, know where to inspect and what to look for. They know how to deal with difficult tenants during inspections and to conduct themselves in a manner that doesn’t offend any tenant. Experts also know their way around property laws and regulations. You will never land in legal trouble with a property inspection specialist in your corner.
- Poor communication practices
To enhance tenant satisfaction and maintain healthy relationships with landlords, property managers must be effective communicators. But many managers fail in this aspect due to:
- Being inconsistent in sharing updates, giving feedback, and responding to emails.
- Giving vague instructions and causing unwanted confusion, frustration, and mistrust.
- Using communication channels that tenants are uncomfortable with or that aren’t accessible to the tenants.
- Poor listening skills. You need to practice active listening to understand and address the underlying causes of the challenges that tenants face.
- Choosing generic communication over personalized communication. Tenants feel seen and valued when you interact with them at a personal level. Adding a personal touch to your communication gets them more connected to you and your property, which enhances tenant loyalty and retention.
- Inconsistency in addressing different tenant issues, e.g. beginning eviction proceedings fast for some tenants and delaying evictions for others. That sends the wrong message of discrimination and favoritism.
- Superiority complex. Some property managers think they can stop by any time without notice or let themselves into their tenants’ homes without permission. This form of superiority complex inhibits open communication and leads to messy fallouts with tenants.
- Failing to communicate with landlords. It’s your job as a property manager to update your landlords on issues of concern, e.g. repair and maintenance needs, and to create a good rapport with them. How you relate with a landlord will greatly influence your relationship with tenants.
- Choosing the wrong property management software
Some property managers actually don’t own property management software- They still have a false belief that they can match the efficiency and effectiveness of tech tools & platforms. These managers end up spending a fortune on manual operations, wasting time, unimpressing tenants, and losing revenue. Other property managers have invested in the wrong software that doesn’t suit their needs or budget.
When picking new property management software, be sure to avoid these mistakes:
- Starting without a plan. You need to know which exact pain points the software must solve. For example, do you want your software to manage documents for you? Do you need analytics reporting? Do you need an accounting tool? Etc.
- Not having a specified budget- you’ll end up buying software that hurts your profitability.
- Opting for many “affordable” single-solution options instead of an all-in-one solution. You need software that puts everything together on a single platform for added efficiency. Such a tool allows you to send automated communications to tenants, manage vacancies, do accounting, manage rent, manage feedback, etc. That saves you time and eliminates unwanted confusion.
- Choosing the cheapest software available and ignoring the obvious limitations that cheap technologies often have.
- Choosing a tool that doesn’t provide the data-based insights that you need for enhancing tenant experience.
- Ignoring scalability. You need tech tools that can grow along with your property management business.
- Hasty tenant screening
Some property managers think of tenant screening as nothing more than a formality. As such, they either do it hastily or skip it altogether. They forego background and credit checks, fail to verify information provided by applicants, and ask shallow questions during tenant interviews. What they fail to understand is that tenant screening is a critical step in the leasing process. Thorough screening reveals a tenant’s reliability in terms of both finances and socialization. A tenant who lies about his financial health is likely to give you a hard time with late rent payments and non-payment. A poorly socialized tenant, on the other hand, can bring violence, unwanted conflicts, malicious damages, unwanted legal issues, and reputational damage to your property/brand.
- Lease agreement mistakes
The common lease agreement mistakes that property managers make include:
- Failure to thoroughly review the contents of a lease agreement as they rush to fill vacant units. You need to understand the legal language used within the agreement in order to implement it effectively. You need to understand, for example, what it says about security deposits, pet ownership, tenant responsibilities & limitations, subletting rules, etc.
- Leniency in demanding security deposits from tenants, encouraging tenant negligence and recklessness. This can lead to losses in terms of repairs and appliance replacements.
- Failure to explain some important aspects of the rent agreement to tenants. You need to explain to each tenant the rent due date, penalties (if any) due to late payment, grace period (if any), appropriate payment methods, and what is covered by the rent.
- Non-compliance with legal requirements as spelled out in the lease agreement. This may result in strained relationships with tenants, tedious lawsuits, or reputational damage.
- Failure to emphasize the role tenants have to play with regard to property maintenance and repairs.
- Failure to clarify lease termination and renewal procedures to tenants.
- Reluctance to enforce the terms of the lease agreement due to favoritism.
- Not keeping written documentation of communications between you and tenants. Keeping records of every interaction you have with tenants can help you stand toe to toe with an estranged tenant in a legal battle.
If you're considering a career in professional property management, make sure you're ready to assume the role of a landlord. Take your time to understand the expectations and requirements that come with the job. While you’re at it, be careful not to make the 6 costly mistakes that we have explained in this article. That’s how you will become a successful property manager.