Another Six Costly Property Management Mistakes to Be Avoided By the Rental Property Investor

property management mistakesManaging the properties in your rental portfolio can be an enjoyable, hassle free experience, if done proficiently. Staying on top of repairs and keeping properties occupied with good tenants who pay their rent on time, is the basis on which real estate wealth is built.

For the inexperienced investor, who is challenged with keeping their properties occupied and controlling running costs, managing their assets can be a difficult and testing experience. But this need not be the norm.

Eliminate the following six costly property management mistakes when managing your properties and make administrating them, a hassle free experience.

1. Buying “bargain homes” with big problems
That great bargain bought at auction appeared to look like a bargain because of the hidden problems you were probably not aware of; leaky roof, structural damage, poorly decorated and a host of other issues you could well do without, if you want to do nothing else than simply collect the monthly rent cheque.

2. Accepting less rent and damage deposit
It’s best to enter into the rental agreement on binding terms, where you as the owner set and agree terms and conditions of the tenancy. Accepting less rent that does not cover your mortgage payment and settling for a lower damage deposit puts your tenant in control of the lease. Definite problems ahead!

3. Financing negative cash flow.
Depending on the location and condition of your property, the market rate you’re able to demand for rent maybe lower than your mortgage payment.
In cases like these, it would be better not to add these properties to your real estate holdings. Having to subsidize a property that’s in negative cash flow in the hope rents will recover to meet targets will have an impact on the overall profitability of your business.

4. Tenants in control of rental terms
Just as you as an investor always look to add quality assets to your real estate holdings through favourable negotiations, tenants will also look to negotiate favorable rental agreements which put them in control.
As the owner of a valuable asset, you must also be in control of all rental terms.

5. Renting to tenants with no credit history.
Every potential tenant should be thoroughly vetted, regardless of how strong their application looks on first inspection.
And, any applicant who does not have an established credit history is most probably not worth the effort of managing if the lease goes badly once they enter into the tenancy.

6. Exchanging rent for services
With a downturn in the economy, trying to keep a cap on maintenance costs and having all your rentals occupied, an exchange of rent for services may at first appear to be an ideal arrangement.
A tenant who maybe out of work and is quite capable at maintaining the repairs on your properties could be advantageous in keeping maintenance costs down.

But, as a lasting property management way of operating, it may prove to be not a sensible approach to hassle free property management.

For the new and even the experienced property investor, these costly property management mistakes must be avoided to limit any negative impact on your real estate holdings. Get the full list of costly property management mistakes from the rental experts at Riches with Rentals

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