Although a large rental property can serve as a reliable source of passive income, adopting a lackadaisical approach to property management can come back to haunt first-time landlords. The less effective you are at managing a property, the less profitable that property is likely to be. And given how much capital typically goes into such investments, this is far from a favorable outcome. First-time rental property owners looking to become effective, efficient property managers and pave the way for maximum profitability would do well to avoid the following mistakes.
Ignoring Communiques from Tenants
Uncommunicative landlords are among the foremost pet peeves of renters. As the property owner, you play an integral role in determining the level of comfort each unit offers, so it’s perfectly understandable that tenants would want you to be reachable. With this in mind, make sure to provide every renter with a phone number and email address at which you can be reached during business hours, as well as an emergency number to call if maintenance issues occur after-hours. Furthermore, while it’s understandable that you’d be unable to respond to every phone call, email and text message right away, you shouldn’t keep tenants waiting more than one business day for a response.
Regardless of how bothersome you find communicating with tenants to be, it’s an essential part of owning and managing a large rental property – or any rental property, for that matter. If you develop a habit of ignoring tenant communiques, there are a number of undesirable consequences that could come about. For example, in the age of instant feedback, many disgruntled tenants won’t hesitate to make their displeasure known online. Depending on where such feedback is posted and how large a following the poster has, you may find irreparable harm done to your professional reputation. Ignoring messages from tenants can also lead to low renter retention, which can adversely impact your financial bottom line.
Improperly Undertaking Renovations
Large-scale renovations can present a huge inconvenience to tenants. For example, if you plan to carry out sweeping renovations in common areas, like laundry rooms and parking structures, there’s a good chance that renters are going to have their daily lives impacted. While there’s no definitive way to prevent tenants from being inconvenienced by renovations, there are a number of easy ways to minimize the hassle.
To start with, make sure to notify tenants that renovations will be taking place well in advance of starting work. This will help ensure that everyone has time to prepare themselves and plan accordingly. You should also seek out contractors who are able to complete the work quickly and efficiently without compromising on quality and obtain the necessary permits long before work actually commences. High-quality permitting software can prove quite helpful in this endeavor.
Placing No Effort into Vetting Prospective Renters
Adopting a “gut feeling” approach when it comes to prospective tenants can severely limit your ability to generate rental income. As any seasoned landlord can tell you, the fact that someone is able to present themselves well over the phone or in person doesn’t mean they’re being entirely honest – or that they’ll make a good tenant. That being the case, it’s in every property owner’s best interest to carry out a thorough screening process when considering prospective renters.
Among other things, this process should involve looking into each applicant’s credit history, rental history, employment history and criminal history – after obtaining their permission, of course. You’ll also need to confirm proof of income, as an applicant that lacks a consistent source of income is liable to have trouble keeping up with rent, regardless of how inexpensive it happens to be. If you don’t have the bandwidth or patience to devote proper attention to the screening process, consider farming this task out to a dependable screening service.
There’s a big difference between managing a small rental property and a large one. Whereas smaller single-family properties generally don’t require much in terms of constant maintenance, apartment buildings and condo complexes are a very different story. So, if you intend to invest in such a property, it’s important to know exactly what you’re getting into. In the interest of managing a large property in a professional manner – and fully enjoying the profits associated therewith – take care to avoid the blunders described above.