Managing rental property in Salt Lake City is hard enough, but when investors make some of these common landlord mistakes it make being your job even harder. After managing rental property for over 30 years, we have seen it all. We often take over managing rental property that was managed by the investor and are forced to deal with the consequences.
Here are some of the most common landlord mistakes that make owning and managing rental property even harder.
1. Not properly screening tenants
It sounds crazy, but you would be surprised how often properties come to us with no application, no credit report, no tenant information other then a phone number that is often turned off, and sometimes even without a lease. Screening applicants is critical to your success as a real estate investor, and a common landlord mistake to avoid!
2. Not increasing the rents regularly
Many investors are afraid to raise the rents because they don’t want to risk losing the tenant. Years down the road they find that their property is hundreds of dollars below market. Not only has the landlord lost thousands of dollars, but they are also forced to raise the rent in large amounts and risk losing the very tenant they were trying to keep. Tenants find it much easier to handle and tend to stay longer with regular increases to the rent.
3. Not treating tenants as valued customers
Just as with any business, and this is a business, in order to successful they must take care of the customer. As a landlord, your rental property is your product and the tenant is your customer. As a property management company one of our main roles is to manage a customer service relationship with the tenant on behalf of the owner. As with any customer, service is key. Prompt response to maintenance requests, regular improvements to the product (the rental property), and genuine concern for their wellbeing are all factors that will help keep them returning as customers when lease renewal time comes.
4. Failing to keep the property maintained
Owning rental property is not a passive investment, it is an active one. As with any investment, rental properties take continued attention. One mistake many investment property owners make is they stop investing in it. They stop maintaining, improving and making their product better. These same investors then wonder why their product doesn’t sell for as much as it did last time. Properly maintaining your rental will help ensure its value, reduce tenant turnover, help get competitive rents, and increase your overall success and profitability. A complex, but important landlord mistake to avoid!
5. Developing a personal relationship with the tenants
As stated earlier, a good customer relationship is important. However, there is a difference between a business relationship and a personal one. Managing a rental property is difficult and sometimes requires a landlord to make difficult decisions. The more personal a relationship is the more difficult making some of those business decisions can be. This can be the most difficult landlord mistake to avoid, there is a fine line between caring for the tenant, and protecting your investment.
6. Asking for unrealistic rents
Renting a property quickly, and reducing turnover are important to the success of any rental investment. A landlord almost always loses more money in lost rents from their property sitting vacant, then they would have by reducing the price and asking market rents in the first place. I have also found that because interest in the property is so low, rental property owners often become desperate and approve tenants to rent their property that are not qualified, leading to further financial problems.
Higher priced properties also have a lot higher turnover. It has been my experience over my years as a property manager in Salt Lake City that if a property rents for the above market price (and that’s a big if), it is often someone moving from out of state who is not familiar with the market. Once they find out what rents are in the area, they often decide to move at the end of the first term of their lease, starting the cycle all over again.
7. Not hiring a property manager
As a property manager myself I have some obvious personal bias here. However I would not be a property manage if I did not truly believe that what we offer as a company was not really in the best interest of the property investor. A good property manager will significantly reduce liability, help reduce vacancy, help get higher rents and drastically increase an investor’s likelihood of success. Most, if not all, of these common mistakes made by landlords are totally eliminated. As investors listen to the advice, and draw from the knowledge and experience of and expert in the field, they will drastically reduce their learning curve and increase their ability to be successful.
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