7 Rules of Property Management
Whether you are new to property management or a seasoned veteran, there are 7 things that are very important for any properly manager to follow and live by to be successful:
1. Screen well and don’t discriminate
You can eliminate 90% of your potential issues by setting high standards and screening applicants thoroughly. But in order to accomplish this, you must have a structured screening process that doesn’t discriminate against any of the protected classes.
2. Make rent payments easy and automatic
Forcing tenants to make monthly rent payments online has been a prooven method to collecting the rent you are owed on your property promotly and without issues.
The key to successfully using online rent payments is:
Require it in the lease!
Most states allow this, except for California which requires you to allow one other method of payment (any method)
Use a reputable online rent payment company.
3. Have a rock-solid lease and stick to it
If it’s not in writing, then it doesn’t count.
Your ability to be successful is highly dependent on the strength and fairness of your lease. If you don’t use a written lease, then I want to encourage you to change your ways. Even if you only want to do a month-to-month arrangement, it should still be in writing.
Eventually, a tenant will attempt to punch holes in your lease, and if you didn’t invest in a high-quality lease designed for your state, then probably won’t be able to defend yourself. If you don’t have one, check out our recommended state-specific lease providers.
4. Inspect the property once a quarter
If you’re too busy to inspect a property at least once a quarter, then you are too busy to be a property manager.
Usually, there is some sort of repair or issue, or regular maintenance item once a quarter that require attention. Even you hire a contractor, it’s important to follow-up on the work, to ensure it was done properly. Doing so gives you an opportunity to inspect the entire premise.
5. Be fair, honest, and make timely repairs.
Whether you operate a maid service, build homes, or run a law firm, every successful business knows that quality and trust are the cornerstones of customer satisfaction.
As a property manager, if you are fair, honest, and make timely repairs, you will be able to retain residents for longer periods of time, and be able to command more rent for your rentals. It’s really that simple.
6. Know how and when to use “notices”
As certain are death and taxes in this life, so are the requirements for proper notice.
Proper use of notices, above all, is the most common pain point for landlords and managers. Every state has their own requirements, and quite frankly, it’s a hassle to give “proper notice” before visiting the property, or terminating a lease. But, as certain are death and taxes in this life, so are the requirements for proper notice. Don’t skip on it – you’ll regret it.
7. Only withhold the deposit for actual, itemized damages
Occasionally, something bad will happen. Perhaps it’s a tenant who fails to give proper notice of leaving, or maybe he abandons the lease completely, leaving you with 2 month’s of unpaid rent.
It’s so important that you only withhold the deposit for actual, itemized damages (material or financial). This can be rent, late fees, or the cost to make repairs to excessive damages.
You can’t withhold a deposit just because you are mad, or because the tenant found a loophole in your lease. You need to be able to prove the damages with receipts or a contract/lease.
Most importantly, you can’t “double dip” on the rent. For example, if a tenant fails to give proper notice when vacating, you could hold them responsible for the rent until “proper notice” is fulfilled. But if you find a replacement tenant within a few days, then you can’t keep the new rent AND the former tenant’s deposit – simply because you can’t claim any actual damages (other than a few days of vacancy) since a new tenant started paying.
Obviously, property management is more complicated and involved than these seven rules, but following them will put you above 99.9 percent of other managers, and help to ensure your success.
If you have any questions about managing your property, click here to speak to one of our property management professional. We are here to help with all your property management needs.