When you purchase a new rental property, you’re expecting an ample return on your investment. Of course, this should be the logic behind any business, you’re in the industry to earn more money. However, it can happen that you lose sight of ways in which you actually lose money.
To prevent this from happening, independent landlords look for property management services and keep their rental units in Pacific Beach occupied with reliable and well-paying tenants. Here you’ll learn about some common mistakes landlords make that reduce their profit.
What are some errors landlords should avoid?
When you’re new in the rental market, you shouldn’t blame yourself for not knowing all the tricks of the trade. However, you can easily take some things for granted. Here are eight examples of pitfalls of poor rental administration:
Not figuring out expenses
As a landlord, you need to crunch the numbers right. Doing the math correctly should include all expenses to keep your rental safe and sound. You should include the following items in your budget:
- Unit turnover costs
- Advertising vacancies
- Homeowner association costs, etc.
Don’t forget the expenses you’ll have when hiring a professional to handle your unit.
Picking an unsuitable rental location
You should do thorough research in order to buy a rental unit at an attractive location. If you have bought a property at a fairly affordable price, it isn’t necessarily going to lead to a fast turnover, so you should check the area first.
Not taking maintenance issues seriously
If you decide to ignore what appears to be minor maintenance problems, it can lead to serious issues in the long run. Make a clear difference between the usual wear and tear, minor damages, and serious hazards that can impact the value of your unit and make it less attractive to paying tenants.
Downplaying tenant verification
You can’t put enough emphasis on finding reputable and trustworthy tenants to occupy your rental. If you don’t interview and screen prospective tenants, you’re likely to:
- face delays in rent collection,
- have to mitigate property damage,
- experience issues with your insurance,
- decrease in the value of your rental.
While eviction procedures can help get rid of unreliable renters, they come at a certain price, so it’s going to cause you more financial stress.
Ignoring the importance of the security deposit
You should be perfectly clear about a couple of things: you should know what would be covered by the security deposit, how much will you collect, and what are the state legal regulations. Make sure to follow legal guidelines, as collecting a deposit over the legal limit can lead to high penalties. The collected deposit would serve as a powerful tool in cases where a tenant breaks a lease agreement.
Keeping sloppy paperwork
You should keep all documentation and important paperwork organized and handy. If this isn’t done in an orderly manner, it can lead to a great waste of time, money, and cause further inconveniences to all parties involved.
Skipping move-in and move-out inspections
If you don’t conduct an inspection after your tenants leave the property and document the condition, it becomes difficult to prove that the new tenant caused damage. You’ll also lose sight of necessary maintenance tasks and potential upgrades.
Being too friendly
While it isn’t wrong to have amicable relationships with your tenants remember that the nature of your relationship is professional. It’s perfectly fine to be up to date and to have an open conversation, for instance when your tenants want to make some small changes in the unit.
However, it’s crucial to protect your investment and set clear boundaries. Provide straightforward notices if they are late with the rent, inform them about pending inspections and maintenance, and try to remain as consistent as possible.
Who offers reliable property management services in Pacific Beach, and the vicinity?
Whether you own rental units in the area around Tourmaline Surfing Park or elsewhere in Pacific Beach, you deserve to have your mind at ease. With the help of Lofty Property Management, you wouldn’t have to worry about unreliable tenants, delays in rent collection, poor maintenance, or irregular property inspections. You can also count on us to market your vacant property, screen tenants, and connect you with reputable repair contractors. Leave all operations up to our experienced team and enjoy more free time on hobbies, friends, and family.
To receive a walkthrough through our process, give us a call!