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Episode #6: Property Management: 10 Mistakes You Never Want to Make
10 Property Management Mistakes You Never Want to MakeWhen I started buying rental properties, I made a lot of mistakes as a Property Manager. Here are some of the most common and irritating ones in no particular order.Not screening tenants. You should always do some kind of background check on your tenants. A bad tenant is worse than no tenant. Keep your unit vacant until you find a good tenant.Not maintaining your property. If you let your property get run down, you will attract bad tenants who will run it down even more. You will also have a high turnover of tenants.Letting your tenants pay late. I have heard just about every story imaginable. My good nature has cost me thousands of dollars in unpaid rents. Now I start the eviction process that day the rent payment is returned.Not having a lease in place. Make sure you always have a lease with your tenant that describes all the terms and conditions. Get your lease form reviewed by your lawyer or use one from a reputable source (government or realtor).Not collecting a deposit (or last month’s rent). Lots of people have asked if they can pay the deposit later. It rarely happens. Make sure the deposits are collected and deposited properly. Make sure you get cash, certified cheque and that they clear before you hand over the keys.Not getting post-dated cheques. If you don’t have post-dated cheques or automatic deposit, then you will have to meet the tenant every month and that is a pain. They never come to you.Not having the utilities switched over. Some tenants can’t get the utilities put in their name due to some unpaid bills with the utility company. Don’t offer to keep the utilities in your name and then have the tenant pay you for them. They rarely do.Making friends with your tenants. Real Estate Investing is a business. You don’t want your friendship getting in the way of dealing with tenant problems.Allowing animals. I have too many bad news stories that involve pet damage and noise-related problems due to pets. Being too nice. I have lost a lot of money trying to be understanding about a tenant’s “difficult” situation. A lot of stories are made up. Most times it just delays the action you have to take, and you end up paying too much in lost rents.
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10 Property Management Mistakes You Never Want to MakeWhen I started buying rental properties, I made a lot of mistakes as a Property Manager. Here are some of the most common and irritating ones in no particular order.Not screening tenants. You should always do some kind of background check on your tenants. A bad tenant is worse than no tenant. Keep your unit vacant until you find a good tenant.Not maintaining your property. If you let your property get run down, you will attract bad tenants who will run it down even more. You will also have a high turnover of tenants.Letting your tenants pay late. I have heard just about every story imaginable. My good nature has cost me thousands of dollars in unpaid rents. Now I start the eviction process that day the rent payment is returned.Not having a lease in place. Make sure you always have a lease with your tenant that describes all the terms and conditions. Get your lease form reviewed by your lawyer or use one from a reputable source (government or realtor).Not collecting a deposit (or last month’s rent). Lots of people have asked if they can pay the deposit later. It rarely happens. Make sure the deposits are collected and deposited properly. Make sure you get cash, certified cheque and that they clear before you hand over the keys.Not getting post-dated cheques. If you don’t have post-dated cheques or automatic deposit, then you will have to meet the tenant every month and that is a pain. They never come to you.Not having the utilities switched over. Some tenants can’t get the utilities put in their name due to some unpaid bills with the utility company. Don’t offer to keep the utilities in your name and then have the tenant pay you for them. They rarely do.Making friends with your tenants. Real Estate Investing is a business. You don’t want your friendship getting in the way of dealing with tenant problems.Allowing animals. I have too many bad news stories that involve pet damage and noise-related problems due to pets. Being too nice. I have lost a lot of money trying to be understanding about a tenant’s “difficult” situation. A lot of stories are made up. Most times it just delays the action you have to take, and you end up paying too much in lost rents.