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Property management can be hugely rewarding, and DIY landlords often reap many benefits. If you’re willing to tackle the big job that managing your own property represents, you can save money and get hands-on experience. Managing your property can be cost-effective. However, it’s essential to be aware of common mistakes that can cost you time, money, and your tenant’s satisfaction. Ultimately, falling into too many pitfalls of DIY property management can undercut your profits and make your job less rewarding.
1. Improper Tenant Screening
When you search for new tenants to rent your property, setting yourself up for success is crucial. But the complexity of screening tenants in the Portland area should not be understated. New legislation has introduced many additional requirements for landlords during the screening process. However, be sure you follow these three steps while also staying in compliance with local regulations:
- Checking credit reports and rental history.
- Verifying employment and income.
- Contacting previous landlords for references.
A comprehensive screening process helps ensure you select reliable tenants who are more likely to pay rent on time and take care of your property.
2. Inadequate Lease Agreements
A generic or outdated lease agreement can leave you vulnerable to legal complications and tenant disputes. It may take a lot of extra time, effort, and research, but creating an airtight and customized lease agreement for your property is crucial. An explicit, comprehensive agreement must cover rent, security deposits, maintenance responsibilities, and tenant expectations. It’s also essential to stay informed about local and state laws, as they may affect the requirements of your lease.
3. Delaying Property Maintenance
Neglecting property maintenance is a common mistake among DIY property managers. Regular seasonal maintenance keeps your property in good condition and prevents minor issues from snowballing into costly repairs. Create a schedule that considers essential maintenance from winter to summer, and promptly address tenant-reported issues to protect your investment and keep your tenants happy.
4. Poor Communication
Communication is the bedrock on which you build a successful property management business. Failing to maintain open lines of communication with your tenants can lead to misunderstandings. In time, poor communication can lead to higher tenant turnover, unreported maintenance requiring more expensive repairs, and stressful disputes between tenants. Keep an open line of contact between your tenants and yourself and maintain a respectful tone in all interactions. In the end, you’ll build a solid professional relationship with your tenants that benefits all parties involved.
5. Overlooking Legal Compliance
Property management involves many legal responsibilities, from fair housing laws to eviction procedures. Portland itself has seen many new housing-related regulations emerge in the past few years alone. Ignoring or misunderstanding these laws can lead to costly legal battles. As such, be sure to stay informed about federal, state, and local regulations that apply to your property. You should also consider consulting with an attorney or property management expert to ensure compliance.
6. Poor Budgeting
Managing the financial aspect of your property is crucial for long-term success. Failing to keep accurate financial records, update your rent roll, or set aside funds for unexpected expenses can undercut your ROI and lead to economic instability. Use the right property management software or hire a professional accountant to help you manage your finances and maintain a healthy cash flow.
7. Handling Tenant Disputes Ineffectively
Dealing with disputes is always stressful, whether your tenants are unhappy with you or your other tenants. Unfortunately, these issues are virtually inevitable in the property management business. Mishandling these disputes can lead to tension and legal troubles. Develop a transparent and fair dispute resolution process, and always strive to mediate conflicts amicably before they can escalate.
8. Ignoring Tenant Retention
Tenant turnover is costly and disruptive. Failing to focus on your tenant retention can result in frequent vacancies, increased marketing expenses, and potential rent loss. It’s always wise to focus on what tenants in Portland want from their renting experience alongside quality communication and a skilled hand at mediating disputes. You can calculate your property’s vacancy rate to get a good idea of whether you need to do something differently when it comes to your retention strategy.
9. Inconsistent Documentation
Maintaining adequate documentation for your rental property often takes more work than DIY landlords expect. However, you can’t afford to let it fall by the wayside. If you don’t keep records of all property-related transactions and communications, it can come back to haunt you in case of a dispute or legal issue. To avoid this mistake, create a system for organizing and storing all documents related to your property, such as leases, maintenance requests, rent receipts, and correspondence with tenants.
10. Underestimating the Time Commitment
Managing rental properties, even on a small scale, can be time-consuming. Some DIY property managers jump into the business without fully understanding the time required for tenant screening, maintenance, inspections, and emergency repairs. This can quickly lead to stress and burnout. To avoid this mistake, realistically assess the time and resources you’re ready to sink into a rental property before taking on property management responsibilities. But if you want to benefit from the passive income of a rental property without the stress of management—or if you’ve already started managing a property and are feeling overwhelmed—working with a property management company is always a good solution.
DIY Property Management Is A Lot of Work
Property management can be hugely profitable when done correctly, but it’s not without its challenges. By avoiding these common DIY property management mistakes, you can protect your investment and continue to enjoy the experience of being a DIY landlord. However, no matter what you do, juggling the commitments of property management takes a lot of time and work. If you’re feeling stressed out or financially strained by your rental property, you might want to look for a few surefire signs that it’s time to work with a property manager.
Rent Portland Homes by Darla Andrew is ready to be a partner in your rental business, handling all the ins and outs of property management with professionalism and care. To hear more about our service package and how we can support you, call or text us at (503) 515-3170 or learn more on our website.
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