Property management, like many jobs, gets easier with time. That is, if you’re doing it right.
There are some strategies that only get worse. If you are considering one of these, you may want to think again:
1. Long-distance management. There are any number of reasons why people get into the rental business. For some, it’s accidental. A common desire today is to move into another home, but hold onto the previous house, renting it out while it gains in value. But, if you don’t live nearby, that dream soon could wind up being a nightmare.
If you are not available to stop into the property to perform inspections, oversee repairs, or respond to emergencies, you may actually lose money on the proposition. If the tenants know you are not around, you are virtually guaranteeing income loss.
Geography isn’t the only thing that causes distance. A landlord who works a full-time job and can’t take time off to respond to emergencies also may need to consider an alternative plan to actively manage the property.
The fix: bring in a professional property manager. Chances are, any fees paid to the manager will be recovered by avoiding property damage or tenant disputes.
2. Automation. We all love the ease of technology, but tenancies don’t work on autopilot.
Landlords should avoid accepting rental applications online unless they’ve met the tenants in person. The form rental application provided may not be suitable. By allowing free access to the form to a potentially unqualified applicant, the landlord creates a false sense of hope and the applicant who is then rejected may lash out. Also, the anonymity of the online process makes it tempting to create false information.
Leases must be properly vetted, so using a form provided by someone else may be risky. The tenant needs to understand the provisions of the lease, and automating the process encourages the tenant to simply click the box without reading the content.
When there are problems at the property, tenants want to know there is someone on the other end of the line to come and help. Forcing tenants to fill out forms and wait for a response can be frustrating. Make sure the process is fast and efficient, and follow up using your actual voice.
Automating, particularly when a landlord oversees multiple units, makes individual tenants feel generic. A person may lose interest in the property, and in caring for it. Nothing beats face-to-face interactions when it comes to tenant screening, and property management.
3. Short-term vacation rentals. With so much in the news about the high profitability of short-term rentals, it seems likes a viable option. The online websites for vacation rentals make it look easy. But, getting into the hotel business takes some forethought, so stop and consider all the options before jumping in.
Imagine condensing the work needed to secure a successful tenancy into a matter of an hour or so, and then repeating this process each day. Increasing the volume of tenants also increases the risk of being duped by a professional scammer.
Unsupervised rentals are the highest risk for damage and crime. Keep in mind that the person you screened may not be the person who picks up the keys.
The risk of property damage is higher with short-term rentals because of more frequent move-ins, and these tenants are there to have fun, not to care for the property.
Also, be aware that these rentals are prohibited in many major cities.
If you do consider short-term rentals, do your best to damage-proof the property and heighten your tenant screening vigilance.
This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).
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Disclaimer: The information provided in this post in not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.