Handling a lease agreement on your own is a great way for property managers to save a little extra and gain valuable experience. Property management isn’t easy, and lease agreements can get particularly tricky for do-it-yourselfers, with numerous pitfalls that promise to trip you up along the way. As a New York property management company here in New York, Peridot Management Group has been through it all. That’s why we’ve put together this list of the top 5 mistakes DIY property managers make when they choose to take on lease agreements themselves.
Most property managers post available listings on Craigslist and other websites or realty groups. Creating a new post for every hosting platform available can be a daunting task, and owners often end up posting in only one or two specific places. This can reduce your chances of finding the best possible tenant or prolong the vacancy of a unit. Take the time to research beyond the most popular listing sites. And, be sure to update and repost regularly, as places like Craigslist prioritize the most recent listings.
Poor Background Checks
Finding the right tenant should always be the priority. It can be tiresome maintaining the listings of a vacant home or apartment. A tenant that doesn’t pay rent can cost you much more money down the road than waiting weeks or months for a tenant that pays on time for years. A property management company will have the proper screening process for finding an honest and reliable tenant.
Below Market Lease Rents
It may seem like a good idea to keep rent rates lower to attract more applicants. Don’t be fooled. Keeping the rent competitively priced will guarantee that you find higher quality tenants and you’ll be better able to maintain the building. As property units age, the maintenance becomes more frequent and more expensive. Keeping your rent rates up to par will set you up for success when it comes to maintaining your property value. Tenants will stay longer in a building that is well taken care of, too. Pricing your rental rates can properly be handled by an experienced and knowledgeable property management company, as they are in the know with current property trends and rates.
Inconsistent Lease Enforcements
Rules are rules. Whatever the lease agreement states, as far as when rent is due, how the tenant may contact you, etc., enforcing these rules consistently can be a giant hurdle. Allowing tenants to fall behind on rent, or making exceptions because of personal circumstances or on a case by case basis is never a good idea. By having a property management company enforce these lease agreements, you can save yourself the hassle and stress of having to enforce these rules alone.
Complete the Rental Agreement and Move-In Condition Report
Owners will sometimes forget to complete the move-in condition report. Updating the rental agreement forms so they reflect the current legislature, rent rate, and policies is another task that you will have to handle on your own if you choose to go without a property management company. These forms will protect your investment and give you the right to withhold the security deposit if the apartment is left in poor condition. Mishandling this process can result in lost revenue and damage to your properties.
Peridot Management Group
Property management isn’t easy. Most property owners prefer to let a company manage their lease agreements for them because a property management company will have the resources, time and expertise to take the best care of a rental unit. Peridot Management Group is one of the best New York Property management companies in business today. For more information on how we can help with your residential lease agreement, don’t hesitate to contact us.
Are you trying to determine which of the New York property management companies is right for your needs? We can help you make this decision. At Peridot Management Group, we manage commercial, industrial, and residential buildings in New York and surrounding areas. Our goal is to make life easier for a property owner with our comprehensive package of services. Whether it be renovation oversight and furnishing procurement, rental management, accounting, expense tracking, and more, we have you covered.
Owning real estate in New York can be stressful, and the competition is fierce. But, our team will take care of all the details and ensure that your enterprise is profitable. Here are a few of the services we provide that will maximize your profits, while keeping your costs down.
Renovation Oversight: Our Commitment to High Standards
Getting the job done correctly, on time, and within budget is imperative. You need a team that can oversee the project from beginning to end to ensure timely completion. It is essential that your renovation project meets market expectations. At Peridot Management Group, we work with the most highly skilled contractors and vendors. Throughout the project, we maintain direct contact and supervision to make sure no unexpected problems or costs arise. From concept to completion, your renovation project will be handled with utmost proficiency to provide a truly positive outcome.
Furniture Procurement and Inventory Services
Furniture procurement services are an excellent resource for property owners. Furnishing your commercial property can be time-consuming and expensive, especially if you aren’t familiar with the market. Using a professional procurement company can take the guesswork out of this aspect of your business, and save you time and money. How do they do it? At Peridot Management Group, we utilize an extensive network of decorators who are experienced with commercial accounts. These highly skilled individuals know what to buy and where to buy it in order to minimize costs.
Once your furnishings are in place, the services extend to helping you keep inventory. This is a vital service you’ll need if you have tenants. Part of the inventory process involves having tenants sign an inventory statement. This document will be used when the tenant vacates the premises to ensure that any damaged or missing items are replaced.
Other Property Management Services Available
Hiring a property management service can be perplexing. You want a company that is ethical in all aspects of the business. After all, this is your livelihood, and your investment must be protected. In your search for the best property management companies in New York, you’ll find that they differ in the range of services offered. For instance, do they provide services such as expense tracking, rent collection, transparent accounting and tax information, or respond promptly to maintenance issues? Peridot Management Group provides those services and many more.
It’s also important that you look for a management company that will respect your tenants to ensure long-term occupancy. Another valuable service you should expect is a communication strategy that works for everyone. You need to know what’s going on with your property at all times. The “no news is good news” approach isn’t acceptable. Agree on times, frequency, and methods of contact that accommodate your needs.
These are just a few highlights of the things you should expect from a property management company. For more information about how Peridot Management Group can help you create wealth and success, contact us today. We will be pleased to answer any questions you may have about our services. Our professional property management team is committed to making sure your role as a property owner is stress-free and profitable. We look forward to hearing from you.
Managing your own property may seem like an ideal situation when first starting out. You will save money on real-estate fees from a property management company and be able to directly manage your units and interact with your tenants. This may seem like a win-win scenario. But, it is important to know that DIY property management can hold considerable risks. Whether you are considering residential or commercial property management, investors should first consider these pitfalls common to DIY property management before deciding whether or not to hire a real property management company.
Inadequate Tenant Screening
Failing to screen tenants properly can lead to costly problems down the road. Often, private landlords are not equipped with the tools or expertise to screen applicants thoroughly. They instead rely on limited information and intuition. Landlords may not have access to an applicant’s past rental history (available to property management companies through an industry database). Due to this they may not be able to conduct adequate background checks. Failing to check all of these screening criteria can mean renting to a tenant who can end up costing valuable time and money. A property management company can carry out all of these checks on tenants. They can look into their financial, personal and work histories to find the best tenant for your vacancy.
Not Understanding Legal Rights and Responsibilities
A landlord should be up to date on both their legal rights and responsibilities, as well as those of their tenants. These rights cover a broad spectrum of obligations, from security and repairs to eviction and rent increases. As a landlord, you will need to be sure all leasing documents are current and compliant with the law, as well as ensure that both parties are following the rental agreement. There is a complicated and fluid system of laws surrounding landlord/tenant relationships. And, not understanding these laws may lead to a breach of law (from either party) with costly mistakes.
Failing to Collect Security Bonds
A bond is a security deposit which the landlord holds in the event a tenant defaults on their rental obligations or causes property damage. Many private landlords fail to collect this bond, which is an essential part of the landlord/tenant agreement. This leaves them no recourse at the end of a bad tenancy. This bond ensures some degree of compensation and coverage of your financial losses, should it be required.
Failing to Conduct Regular Inspections
Inspections are essential to ensure tenants are both compliant with leasing agreements and happy as well. Inspections are also set out by law in each state. And, failing to implement regular checks may lead to legal action and/or penalties. Many private landlords fail to conduct regular inspections, either from lack of time and organization or because they want to avoid confrontations with tenants or maintenance costs. There are many reasons landlords fail at regular inspection. But, the risks can be costly. Regular inspections give you both the peace of mind that your property is in good condition and that tenants are following the rules.
Professional Property Management
Engaging the services of a professional and reputable property management company can reduce your risks substantially as a property investor. They will ensure the tenants in your units are properly screened. They will also take care of issues like tenant disputes, delinquent rent payments and maintenance problems. All these things can save you time, stress and money. For those thinking about cutting out the middleman to save money, take into consideration these common risks to determine whether DIY property management really will save you money in the end.