We all have an “oops” moment from time to time. As a landlord, you might have realized too late that you forgot to attach a late fee to a late rent payment or you neglected to send a plumber over to check a dripping toilet when you said you would.
Minor missteps are one thing. You’re bound to make mistakes, even if you’ve done all this before.
Larger oversights, however, are more difficult to recover from. Suppose you violate a fair housing law. It may have been unintentional, but that’s a mistake that may cost you $16,000.
Oversights can be avoided, and one of the best ways to avoid them is by working with a knowledgeable, local, and expert property management partner. Why suffer through a string of mistakes that will leave you with less money and a lot more stress?
Let’s not do that. Instead, let’s allow a New Jersey property management expert to help you navigate the leasing process, take care of the day-to-day management and tenant relationship issues that pop up, and protect the condition and value of your investment by responding to maintenance issues.
You don’t have to do it alone.
In fact, you shouldn’t.
Here are some of the oversights a property management company can help you prevent.
Choosing Your Investment Property
Expensive mistakes can be made before you even have a tenant in place. What if you choose the wrong property? If you decide to invest in rental real estate, you need to know what you’re likely to charge in rent, what you can plan to spend on maintenance, and what kind of tenants will be interested in renting your home.
There are a lot of variables.
The right investment property will remain occupied and in good condition. You’ll earn great short-term cash flow and impressive long-term returns on your investment.
The wrong investment property will cost you more than it earns you.
Property managers have a wealth of knowledge when it comes to the local real estate market, and your property manager can help you identify properties that have the potential for high returns. You can expect valuable insight into the property’s condition.
Here are some of the most common oversights we see when investors buy a property, and how a property manager can help you choose the right rental property.
PROPERTY MANAGEMENT SOLUTIONS
|Choosing the Wrong Property||Property managers understand what tenants are looking for. You’ll avoid the mistake of buying a property that residents won’t be interested in renting.|
|Misjudging a Location||Location is everything when it comes to the real estate market, whether we’re talking about sales or rentals. Lean on a property manager to tell you whether the location is a desirable one.|
|Missing Potential Problems||A fixer-upper may save you money at the point of purchase, but it’s going to cost you when you have to make the renovations necessary to get the property ready for the market. Property managers can point out what will be needed and help you decide if it’s worth your time and money.|
Choosing the wrong investment property is expensive and disheartening. Partner with a management company before you invest – not after.
Pricing is not always easy, especially if you don’t know the market or what competing properties are renting for.
Mistakes are common when it comes to pricing a rental property. Either owners price their homes too high or they price their homes too low, or they don’t adequately raise the rent when the lease renews.
- Danger in Pricing Your Home Too High
Vacancies are longer
Unqualified tenants are the only people willing to pay higher rents
You’ll eventually have to lower the price
- Danger in Pricing Your Home Too Low
You’re leaving money on the table
It’s more difficult to bring that rent to market rates
Good tenants may assume something is wrong
- Danger in Not Raising Rents at Renewal Time
Your costs rise but your profits don’t
You are losing money and not earning market rents
It will be more difficult to adequately raise rent at the next renewal
The benefits of relying on a property manager to price your rental home are numerous. Property managers understand that your investment’s rental value will depend largely on the local rental market. Your management partner will look at what similar homes are renting for, and compare those homes to the one you’re renting out.
Property managers will conduct a Comparative Market Analysis
Good data leads to good pricing. Yes, there are sites like Zillow and Trulia and HotPads that will tell you what properties are listed for, but what you really want to know is what those properties ultimately rented for. A local New Jersey property management company can help you conduct a thorough and accurate market analysis. Consider using our more accurate data and leveraging our deep market knowledge. This will prevent pricing mistakes.
The Problem with Tenant Screening Oversights
Many mistakes, as we’ve said, can be easily overcome. The wrong tenant, however, is an oversight that’s going to stick around for at least the length of your lease term.
The tenant you ultimately screen and place will impact your entire rental experience. Some of the landlords we work with now came to us for help when they realized that they made a big mistake in the tenant that they chose. They realized, too late, that they had not screened their tenants thoroughly. Maybe they glanced at a credit report or didn’t bother to verify income. Very few landlords will call former landlord references.
Rigorous tenant screening is essential.
And, it’s best handled by a professional property manager.
If you’re not careful about who you put into your property, you will waste a lot of time trying to collect late and unpaid rent. You’ll find yourself managing a number of conflicts and disputes, and you may end up with expensive property damage at the end of a lease.
Bad tenants often need to be evicted, and it’s sometimes challenging to hold them accountable or have them removed once they’ve taken possession of your property.
Skipping the screening process or not giving it enough attention is one of the most damaging oversights that landlords find themselves regretting. This can be extremely costly in the long run. Always look at rental history, measure income against what you’re charging in rent, and check for past evictions.
How Can Property Managers Prevent this Oversight?
|Establish and share standard qualifying rental criteria.||Check national eviction and criminal databases.||Evaluate credit and financial stability.|
|Take a look at criminal backgrounds.||Verify an applicant’s income and employment.||Talk to rental references (at least two).|
These are the most important parts of screening and placing a good tenant. You’re looking for a stress-free rental process, which requires a tenant paying rent on time, helping you take care of your property, and following the terms of the lease agreement.
Property managers are already equipped to screen tenants. We have resources and tools – as well as expertise – that independent landlords do not.
How Many Maintenance Oversights Are Even Possible?
You’d Be Surprised
One of the easiest places to make a mistake or fall victim to an oversight is with your maintenance.
Or, your lack of maintenance.
Property managers can help you avoid the many maintenance pitfalls that are easy to stumble into. It starts with good organization. Most property management companies will have a plan in place to address every type of maintenance that your property might need, whether it’s preventative maintenance, emergency repairs, or a routine fix.
This comprehensive approach to maintaining your investment will protect you from potential problems such as:
- Deferred maintenance
- Unreported maintenance
- Unnecessary repairs
A good management team with a solid maintenance process will help you prevent the expensive oversights of deferred and unreported maintenance.
If you put off repairs or you don’t hear about a leaking sink for a few months, the repairs you’re called upon to make will always be more expensive and complicated than they would have been if you’d responded right away.
You’ll also face additional deterioration of your entire property. Property managers won’t allow this oversight to happen.
Here’s how we protect your property and its value and condition
Property managers will explain the importance of reporting repair needs right away.
By helping your tenants to understand that everything should be documented and reported right away, we’ll keep a better handle on how and when things are repaired. We won’t let small problems become large catastrophes.
Property managers will document the condition of your property accurately and with inspection technology. You’ll receive copies of inspection reports, with photographs, so you can see exactly how your property looks.
A preventative maintenance plan means you can have all of your major systems and functions inspected and serviced. We recommend getting the heating and cooling system inspected and serviced annually. We want the roof and the gutters cleaned annually. Let us hire a pest control service to do routine treatments.
Responsive maintenance can help you avoid the oversight and expense of deferred maintenance. Make sure you’re prioritizing preventative maintenance in order to save money, retain tenants, and protect the condition of your investment.
Avoiding Unlicensed and Uninsured Vendors
Another oversight? Trying to save money and cutting corners on the labor you hire.
Working with professional vendors and contractors who are licensed, insured, and bonded has to be non-negotiable when you’re renting out a property.
Every single one of us is concerned with the cost of repairs. We’ll make the work as cost-effective as possible. But, you’ll find that if you cut corners and hire any guy off the street, it’s going to be far more expensive for you to fix the problems that are caused by the cheap labor you hired.
When you need work done at your property, hire professionals who are reputable and have the necessary licensure and insurance. If a worker falls off a ladder while repairing your roof and they don’t have insurance, you’ll be the party who is held responsible for medical bills, loss of wages, and who knows what else.
Cheap labor is not just an oversight. It’s neglect.
You can have a cost-effective maintenance plan that isn’t dangerous for you, your tenants, or your investment. Don’t make the mistake of seeking out the cheapest possible workers or using sub-standard materials when you’re attending to routine maintenance.
Property managers are more preventative. We already have relationships in place with good, qualified vendors who stand by their work.
Limiting Your Legal Liability
How well do you know the laws?
Well enough to avoid all the potential mistakes that can be made when it comes to following those laws and complying with the requirements in place?
Plenty of state and federal rental laws need your attention. If you don’t know the laws, you’re at risk of making an expensive legal mistake.
A property manager won’t let that happen. We’ll keep you compliant.
Here are some of the biggest oversights when it comes to legal compliance. These mistakes will not only cost you money, they’ll potentially land you in court.
If you’re not up to date on fair housing laws, there’s a lot of room for error. Not knowing the protected classes, the difference between a pet and a service animal, and what types of accommodations are needed for people with disabilities can be a huge oversight.
The way you screen, market, and respond to tenants can have fair housing implications. Property managers know this, and we eliminate your risk.
New Jersey Lease Agreements
What goes into a strong lease? Do you know?
What about where to find a lease template? You’re not just pulling a sample off the internet, are you? Your lease agreement is going to be the most important document of your tenancy.
This will protect you and your tenants and your property. Make sure your lease is both legally compliant and legally enforceable in the state of New Jersey.
When your property manager is taking care of the lease agreement, you know it’s going to be thorough, complete, and compliant.
Don’t screw up the security deposit. This can be one of the most expensive oversights landlords make.
Security deposit oversights can happen as you’re collecting the deposit, holding it, and especially returning it. In New Jersey, you have 30 days after the tenant moves out to return the deposit and itemized statement. It’s a tight window, and property managers can prevent you from missing the deadline. We can also make sure that only lawful deductions have been made from that deposit.
There’s a process to evictions in New Jersey, and you need to follow that process to every detail. You can easily make an expensive mistake while serving the notice, filling out the paperwork, or missing something that’s required by the court. Working with a property manager will reduce the risk that you even need to evict; professionally managed homes are usually less likely to require an eviction.
Eviction is bad for you, your tenants, and your property. A good management company will help you avoid eviction.
Enforcing Your Lease Agreement
It seems easy enough, right? You have a lease in place to ensure that the mistakes are minimal and everyone is on board with what’s happening throughout the tenancy.
A lease is great. Your lease agreement is a written contract between you and your tenants. It’s fantastic that you have one.
But, are you enforcing it?
You have to enforce the lease agreement and hold both yourself and your residents accountable for what’s included there.
Examples of Lease Enforcement:
- If there are late fees for rent that isn’t paid on time, make sure you charge those fees even if rent is one day late. Even if it’s a few hours late.
- If the lease agreement says there’s no smoking on the property and your maintenance vendors report that they’ve noticed your tenants smoking while they’re there, making repairs, you’ll want to address the issue with your residents.
- Put violations in writing. Highlight the part of the lease with which they are not in compliance, share the documentation you have, and then give them a date by which they need to be in full compliance with the lease agreement.
The lease contains important information about who is responsible for what at the property. There are expectations and responsibilities clearly spelled out. But, it means nothing if you don’t follow the lease. Make sure you pay attention to it, and make sure your tenants know that they are accountable to it as well.
Property managers enforce lease agreements by collecting rent on time, conducting inspections, and communicating with tenants. There’s no risk that something will be missed.
We know that perfection is impossible. We also know that a lot of these oversights are unnecessary, especially when a property manager can help.
Please contact us at Realty Solutions if you want to prevent easy mistakes like these. We lease, manage, and maintain homes in Audubon, Collingswood, Cherry Hill, Haddon Heights, Blackwood, and the surrounding communities.