Owning property is one of the great benefits of a free society, especially when one can generate income from that property by renting it out as a dwelling place or business location. However, like most things in life, there are challenges that come with property ownership and more specifically with the management of that property. Whether you, as the landlord, manage the property yourself or have hired a property manager, there are some challenges that every manager faces and some very practical ways to overcome them.
Maintenance is an on-going need in the world of property management, but the unexpected maintenance is never fun and can be quite costly. The best way to avoid these unexpected situations is to first, have a reserve account with substantial funds to cover these expenses. Basically, it's having an emergency fund, much like one you might have for your own personal budget. If you have cash reserves to cover unexpected maintenance that will ease a lot of the burden when these situations arise. Additionally, creating and implementing a preventative maintenance plan can go a long way in curtailing these emergencies. Obviously, you can't plan for or anticipate everything, that's why is called "unexpected" but having cash reserves dedicated to these repairs and being diligent with preventative maintenance can certainly help.
This is another challenge that is simply part of the job of property management. When you work with people, there will always be challenges especially when it comes to their dwelling places. It's always best, when dealing with tenants, to make sure they feel "heard" and that their complaints are not being ignored. Ignoring or brushing off tenant complaints will only cause the problem to escalate and in some cases, can bring about legal action. Realizing, as a property manager, that complaints come with the territory will be half the battle. The other half is devising a written plan on how you and your staff will handle these. Perhaps a plan could look something like this: first, try and resolve the complaint over the phone. If the complaint requires more action, have the tenant appear in person to fill out a formal complaint form. Often requiring this from tenants is a great way to discern if the issue is truly valid or just a nit-picky one. If it's truly important to the tenant, they will take the time come in and do the needed paper work.
Collecting rent payments can be a HUGE headache for property managers. Late payments or non-payments happen and there may be times when a tenant has their own set of unexpected circumstances and just needs some grace. What a property manager DOES want to avoid is the habitually late or non-paying tenant. The tenant screening process, before they move in, will certainly be a help in determining what type of tenant they will be. However, having policies in place when dealing with late or non-payments is essential, but there are some other ways to motivate tenants to pay on time. An automatic debit deduction is one way to ensure the payments will come in on time. You can also offer a 5-10% reduction in the rental fee if they choose this option. Another great motivator is to offer a reduction of the rental fee after the first full year of their residency. These are great options that serve as positive motivation instead of just penalizing the tenant.
UGH!! Damage to the rental property is never a fun problem to deal with. Yes, accidents happen and a certain amount of property damage is expected over the course of time. But what does a property manager do if a tenant deliberately damages the property? Requiring them to pay is certainly an option, but let's face it, if someone deliberately damages something, they are likely not going to feel compelled to turn around and pay for those damages. This is why the screening process is so very important. Knowing the type of people to whom you are renting is the first step in avoiding this problem. However, some people, while not deliberately destructive, can just be careless and neglectful. In this case, coming to an agreement with the tenant regarding any damage or neglect may be the best option.
While this certainly does not cover all of the challenges that property managers face, these tend to be the BIGGEST challenges. What about you? What have you done as a property manager that has proven to work well when dealing with tenant challenges?