Whether you’re an experienced investor or a newbie that recently took out their first home buyers loan, you’re bound to encounter problems along your real estate journey.
This article highlights the top 5 property management challenges and how to avoid them.
If you’d like to learn how to overcome some of your rental obstacles and improve your business, read till the end.
5 Common Challenges Landlords Face
1. Collecting Rent Effectively
Residential rental properties rarely generate any other income than your tenants’ rent. Even if you provide auxiliary services for a fee, the cash flow from such ventures is unlikely to offset rental arrears.
Several obstacles can hinder you from collecting rent effectively. For instance, if you own multiple properties across the state, going from door to door to issue a reminder isn’t practical.
Thus, it would be in your best interest to make collecting rent as easy as possible. You can hire a professional to manage your rental property and make rent collection easier with innovative solutions.
2. Reducing Vacancies and Tenant Turnover Rates
Another common challenge landlords face is the issue of empty units and turnover. While experts recommend budgeting for at least two months, prolonged vacancies can eat your revenue. After all, without tenants, your property runs at a loss.
That’s not to say that empty units are always inherently your fault. Sometimes renters have to move due to a job relocation, change in family size, or financial situation. However, if you cannot attract or retain tenants because your property is subpar, you need to consider a change.
3. Communicating Efficiently with Tenants
Establishing a healthy landlord-tenant relationship with your tenants makes your life a lot easier. When you have a cordial, or even friendly, rapport with your renters, they’re more inclined to pay their rent on time and be more respectful to the property. On the other hand, when you’re hostile, you might have to deal with more repairs and higher turnover rates.
The key to a healthy relationship lies in communication. When a tenant has an issue, are you easily reachable? Before entering their apartments, do you give proper notice to conduct inspections or make repairs?
If you do not establish a convenient means of communication, your relationship with your tenants will suffer.
4. Managing Property Damage
No rental budget is complete without an allocation for maintenance and repairs.
Property damage is an inevitable nuisance that all landlords have to manage. Normal wear and tear can take a hit on your investment in the form of leaking pipes, broken shingles, and faulty appliances. Additionally, accidents or the weather could cause significant damage with pricey bills.
Thus, if you want to turn a profit, you have to look for ways to keep property damage at a minimum. That might include proactive solutions like getting insurance or more durable materials and services.
5. Finding the Right Professionals
Finally, landlords also struggle with finding the right professionals to work with. After all, real estate is a capital-intensive investment, and you want only the best team working on your property.
The last thing any rental owner needs is a shoddy repairman that wastes their time and money. On the other hand, you can make your property more attractive, efficient, and profitable with the right crew.
Related Guide: Major Real Estate Investing Mistakes You Need To Avoid
How to Overcome Property Management Challenges
1. Use Digital Solutions
Using digital solutions can help you overcome challenges one through three, which we highlighted earlier. For example, setting up an automated payment schedule reduces the chances of late payments and the effort to send out reminders.
Additionally, automatic home upgrades can significantly boost your rental value and help you increase tenant satisfaction. As a result, you’ll be able to improve traction and reduce turnover rates.
Lastly, property management software such as short term vacation rental software and other digital apps can help you communicate effectively and promptly with tech-savvy renters.
2. Conduct Proper Tenant Screening
As a property owner, you should never underestimate the value of proper tenant screening. It’s not enough to conduct an interview and ask a few questions.
Do a background check to confirm the renter can meet up with their monthly rent. Also, ask for previous landlord references and find out if the tenant is challenging, has a history of paying rent late, or damaging the property.
3. Perform Routine Maintenance
While, some repairs can spring upon you, like the ones from a fire or accident. Most costs associated with property damage tend to develop over time.
However, when you conduct routine maintenance, you’re more likely to catch these at the early stages. By arresting the problem in its earlier stages, you stand to save yourself a lot of money in the long run.
Also, it helps you spot weak areas you can optimize to increase efficiency and tenant satisfaction.
4. Get Recommendations
Whatever service you’re trying to acquire, it’s best to start with recommendations from family and friends. If you run in a circle of property owners, it’s unlikely that someone wouldn’t know a reputable cleaning service, a great real estate lawyer, or a good electrician.
Conclusion
All investments have their pros and cons, but you can overcome them with forward-thinking solutions. We hope you find this article on the top 5 property management challenges helpful and our answers to avoid them applicable. If you’re currently facing any problem and need some guidance, seek help from a local property management company.
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