If you are new to property management, some costly mistakes should be avoided. Most property managers who have been in the business for at least a couple of years have either learned these lessons the hard way or learned early on what to avoid. Because we love this industry, we love to share information and encourage new people venturing into the world of property management. Here are the 5 most common mistakes in property management to avoid at all costs.
- Property management agreement
- Lease agreement
- Move-in and move-out procedures
- Legal issues
- Property visits & communication
Property management agreement
The single, biggest mistake we see with new property managers is not having a signed property management agreement. A property management agreement is a contract between you and the property owner that offers mutual protection and establishes expectations for the job. If your neighbor offered you the job of property management for him and all you have is a handshake agreement, it is time to correct this situation and draft a contract for both parties to sign.
The agreement should include specific information about the job responsibilities and expectations for measuring success. Information regarding pay as well as incentives is also important. Both parties should sign the agreement.
Lease agreement
All properties currently being leased should have signed lease agreements. Lease agreements protect both the tenant and the property owner. The terms of the lease are detailed in the agreement along with specifics about what is permitted on the property. There are state-specific laws related to lease agreements that should be followed. As the property manager, it is your responsibility to know your local laws and follow them.
Move-in and move-out procedures
This common mistake is so easy to avoid. When executing a lease agreement and handing over keys, schedule a walk-through of the property with the tenant to photograph and note any issues with the property. Photos of every scratch, dent, hole, or any other cosmetic issue should be properly documented before move-in so that both tenant and owner are protected. Tenants will have the opportunity to ask questions and address any of their concerns with the property manager on-site, and the property manager will know the exact condition of the property when the tenant takes possession.
A second benefit to handing over keys in person is establishing communication with the tenant early on to avoid headaches in the future. Finally, it’s important to discuss move-out procedures at this visit. While move-out may occur in the distant future, communication of expectations now will be helpful as it sets the tone for what will happen eventually. The property manager will still need to communicate move-out procedures again when the time comes, but over-communicating is always better than under-communicating.
Legal issues
The Fair Housing Act prohibits discrimination in housing because of:
- Race
- Color
- National Origin
- Religion
- Sex (including gender identity and sexual orientation)
- Familial Status
- Disability
You have a legal responsibility to follow the law and protect yourself and your property owner from claims of discrimination. Additionally, you have a legal requirement to provide necessary repairs and maintenance on a property. You also have to disclose issues like mold, asbestos, and lead paint if you know of those issues on your property.
Property visits & communication
We mentioned this above, but it is worth repeating. Over-communication with tenants is beneficial to both the tenant and the property manager. It demonstrates that you are a good property manager and intend to take care of your tenant and your property. Regularly scheduled property visits are important to maintain a good relationship with your tenant and keep an eye on your property.
At Weaver Realty, we provide expert property management services with decades of experience. We would love to work with you to meet your property management needs. Call us today at 904-733-0039 to speak with our team of property management professionals.
