The real estate market is one of the most lucrative industries since time immemorial. That’s why so many people are attracted to joining the sector in various ways, like becoming a real estate broker, buying properties to become a landlord, or setting up their own property management firm.
If you compare these three choices, you might think that becoming a property manager is the easiest thing to do. However, before you allow yourself to become part of the property sector, better read these common mistakes rookie property managers make.
Neglecting to check the current state of rental units
Newbie property managers, especially those who mostly transact virtually, often take the word of the landlords, coupled with some photos or videos, when it comes to the condition of a rental unit. Other property managers visit the area but fail to properly inspect every inch of the property.
Why is this a bad practice? Well, firstly, you don’t want to be embarrassed in front of your clients if you show them a place you barely know yourself. This also leads to possible tenant issues especially if the unit is far from what was advertised.
Moreover, you might be missing out on ways you can improve the value of the property by not checking it out before leasing it to others. What if your property had a pest problem? By checking the property yourself, you would be able to keep pests away from your property whether you choose to hire pest control professionals or by implementing more natural approaches.
Focusing too much on managing money
There’s a reason you’re called a property manager instead of a collections officer. There is more to the job than simply making sure all payments are made and transmitted on time to property owners.
The first thing you have to do after landing a client is to sit down with them to fully understand what you are expected to do. Some owners actually do want you to focus on simply finding tenants and collecting rent, but others will need you to conduct inspections to ensure the units are well-maintained and taken care of.
Once your responsibilities are clear, it’s the only time you can perform your job satisfactorily.
Not fully utilizing digital transactions
The digital age has been on us for quite a while now, so the traditional methods of property management may no longer be enough ground for you to cover.
When potential tenants need a new place, they no longer pick up the phone — they go online, and you have to be there. There are a lot of opportunities to be missed by limiting yourself to brick-and-mortar operations.
Neglecting to audit finances
The bane of any business is mismanaged finances. Rookie property managers tend to commit this mistake simply because the subject intimidates them. But as a professional, you literally cannot afford the same mistake. You will be answering to at least two other people per leased unit if this happens and you wouldn’t want that.
Here’s a tip for you: if you can’t handle the finances all by yourself, then just hire someone else to do it. However, make it a habit to conduct your own audit to double-check the work of your accountant. You’ll thank yourself later for it.
Failing to fully understand property laws
There are statutes and regulations that ensure that both landowners and renters get the worth of their money and investment. Your clients will surely brief you through some of these guidelines, but it pays to do your own research in order to properly manage your clients’ real estate.
In fact, you have to strive to always know more about property laws than your clients — you are supposed to be the expert, after all. It’s one good way to prove that you and your services are indispensable.
This is especially important if you are managing commercial or industrial properties that require more stringent protection.
Speaking of protection, property managers rarely feel like they need professional insurance. However, there are a lot of scenarios where clients could pursue claims against your firm.
As a property manager, you are going to need help from associates and other hired professionals in drafting contracts, contracting repair workers, and conducting maintenance inspections, open houses, and site visits over the properties you manage.
All these tasks carry significant risks to them, and you surely wouldn’t want to pay for someone else’s mistake, deliberate or negligent, out of your own pocket, especially if you’re still starting to build your practice.
Scaling without perfecting existing systems
All property managers have big dreams for their business. However, some managers, especially the rookie ones, try to cut corners and start scaling their coverage area after just a few months.
Scaling operations takes time. But more than that, it requires a mastery of existing systems and best practices for the expansion to succeed. Managers who dream big but act small would eventually fail in the long run.
Now that you know the most common mistakes rookie property managers make when starting their practice, you can avoid each and every one of them to increase your chances of succeeding in the field. There’s no one formula or surefire way to guarantee success, but tilting the odds more in your favor can’t hurt.