Everyone makes mistakes. But your mistakes could cost you money and tenants. Find out the common mistakes and how to avoid them.
Finding a new tenant for your property is an exciting time. You’re building a new relationship with a potential long-term rental. And the tenant is ready to start a new chapter in their lives.
However, that hopeful start can sour quickly. Chronic mistakes over time can deteriorate this budding relationship. Eventually, it can get to the point where the tenant has had enough.
They leave the property.
Tenants who quit your property can leave you with a myriad of problems. You’ll have to contend with the reduced cash flow because you aren’t receiving rent from the property. Also, you’ll have to deal with the costs of finding a new tenant.
Finding a new tenant can also have a psychological cost. Anxiety and stress are commonplace in a tenant search.
As a landlord, you want to avoid this situation as much as possible. Finding great tenants can be difficult. So you want to keep the great ones on your property as long as possible.
There may be something holding you back, though. And that’s mistakes you may make as a property owner.
Mistakes happen. But these common mistakes are avoidable if you know ahead of time.
Mistake #1 – Using a Bad Property Manager
You trust your property manager to take care of your rental. Their job is to find good tenants and take care of issues that arise.
However, a bad property manager can sour the tenant-landlord relationship. And some property investors don’t use a property manager at all.
The right property manager, though, can make all the difference in the world.
Steven and Monica wanted to plan for retirement. But with a family of 5 to worry about, they were afraid of debt.
They decided to take the plunge with Wealth for Life. In addition to helping them build a property portfolio, we also helped with property management services.
Not only did the property manager find a good tenant right away. They also sent regular updates and feedback.
The right managing agent looks after the property and takes care of issues that arise. They’re an essential bridge between happy tenants and happy landlords.
Mistake #2 – Lack of Communication
Another mistake that landlords make is a lack of communication with tenants. This could be because your property management service doesn’t respond promptly. Or it may apply to you if you manage the property directly.
Lack of communication can take a variety of forms like:
- Not answering calls or messages
- Never being available
- Not letting the tenant know if/when repairs happen
- Not following up with issues after the resolution
Communication can go a long way towards making tenants happy. They want to feel heard, not ignored. Tenants may feel frustrated if they think the landlord or property manager doesn’t take their concerns seriously.
Mistake #3 – Dragging Their Feet On Repairs
Repairs are a big issue for tenants. Depending on the severity, it can impede their daily life. Every day that goes by is an inconvenience for your tenants.
Not only is it an inconvenience for your tenants, but it can also cost you additional money. Important repairs can cause damage to your property if you don’t handle them properly.
Respect your tenants and your investment by taking care of repairs in a timely manner. Be reasonable with your timeline. But let your tenants know when the repairs will happen and follow through.
Mistake #4 – Not Considering the Tenant’s Emotions
Great landlord and property manager know that tenant emotions are important. Don’t make the mistake of acting overly friendly. However, take the time to hear what your tenants are saying.
Use compassion and empathy when they have issues. And try to answer or reply to their communications as soon as possible.
Mistake #5 – Treating Investment as a Hobby
A lot of time and money goes into letting out a property. So, many landlords need to understand that an investment isn’t a pastime. It’s a business.
That means that you need to give it the appropriate attention it deserves. You may not manage this business directly. But it still requires active consideration.
Mistake #6 – Increasing Rents Without a Good Argument
Rents go up all the time. It’s expected from time to time. However, the mistake comes from increasing rent without a good reason.
It’s a good idea to review market rates regularly. Make sure that your rents keep up with market levels. It may also be a good idea to keep in contact with other rentals that are like yours.
Check some out if they’re open for inspections and see how they compare to your property. Additionally, you can also do a gross yield calculation to compare it to your suburb’s rental yields.
Remember that most tenants won’t have a problem with paying an increase as long as it’s reasonable. Doing small reviews regularly may also help reduce sticker shock. If you do infrequent rental reviews, you may have to increase rent so high that the tenant moves out.
Mistake #7 – Thinking in Terms of “Home” Instead of “Investment”
This is a common problem for new property investors. They like to look for properties they can imagine themselves in. However, that’s the wrong way to look at it.
Landlords need to think of how their potential tenants see the value. Not whether or not they themselves can make it a home.
One example may be the property location. A landlord may not want to live in an apartment that doesn’t have a parking spot. But it can be a sound investment if it’s close to public transport and near a university.
Another example may be the interior decorating choices for the property. New owners may enjoy painting or decorating the inside of the home. However, they also need to consider their future tenants.
The colour scheme may look great to a new landlord. But a bright orange carpet and blue walls may not appeal to too many future tenants. Instead, it’s a better idea to err on the side of caution and go with neutrals.
Mistake #8 – Getting Too Friendly with Tenants
Forming direct relationships with tenants can turn into a trap in the long run. It may make it difficult for you to enforce business decisions in a direct relationship.
Also, tenants may unintentionally take advantage of you if you’re too friendly with them. After all, why worry about late rent if your landlord is also your “buddy”?
You may mitigate many of these problems if you hire a good property manager. Property management services are an effective bridge between you and the tenants.
Keep Tenants Happy by Avoiding Common Mistakes
There are many reasons why tenants leave a property. But don’t let some common landlord mistakes be the reason why you lose a tenant.
Avoiding these common mistakes often takes pre-emptive measures. This may include getting into the right mindset or putting proper protocols in place prior to putting up a property for rent.
You can also avoid common mistakes by hiring a great property management service.
The right property manager delivers professional and courteous service to your tenants in a timely manner. And they can keep on top of repairs and potential issues for you.
Bad property managers can sour the owner-tenant relationship and push your renters out the door. Without a doubt, one of the best things you can do for happy tenants and stable cash flow is to hire a good property manager.
Are you ready to start your renter relationship on the right foot?
Wealth for Life offers great property management solutions. We know how to keep tenants happy. Contact us today to find out more.