Working as a property manager or landlord of a real estate property can be a great way to bring in extra income while providing housing to people who need it. At the same time, however, there are a lot of responsibilities that come along with managing a real estate property. Even the smallest of mistakes could lead to a major lawsuit or other legal troubles. By avoiding some of the most common property management mistakes, however, you'll be on your way to success as a property manager in no time.
Not Thoroughly Screening Applicants
One of the most important steps to follow before approving a rental applicant is to thoroughly screen him or her. This means not only running a detailed criminal background check, but researching his or her credit history as well. Unfortunately, this will mean paying (likely in the form of a monthly subscription) for professional tenant screening software. However, you'll likely find that this monthly expense is more than worth being able to stay away from high-risk tenants or even tenants who have a criminal record.
Accepting Late Rent
While many landlords have a "grace period" in place when it comes to monthly rental payments, it's important to be firm with your rental due dates and confront tenants as soon as possible when they're late on a payment. There's always a chance that they have simply forgot to make their rental payment, but in the event that they don't have the money, you'll need to have legal documentation that you spoke with the tenant before you can pursue legal action. If you're constantly known for accepting late rental payments, you could be putting your own financial well being at risk.
Failure to Schedule Annual Inspections
Finally, be sure to understand your legal responsibilities as a property manager when renting out residential property. Specifically, you may need to hold an annual inspection of each of your rental units to ensure they're in safe living condition. This may also include taking the time to test all smoke detectors, carbon monoxide detectors, and other safety features of each unit. By taking the time to do this each year, you can reduce the chances of an incident occurring on your property and thus lessen your chances of a lawsuit.
Managing your own residential real estate property can be a great option, but it's important to avoid these mistakes in order to be successful.
For more information, contact Management Services or a similar company.