In our opinion, there are only seven rules that you must adhere to when creating a successful property management company. If you follow these, it will put you above the rest of the competition and help ensure your success:
- Screen well and don’t discriminate
- Make rent payments easy and automatic
- Have a rock-solid lease and stick to it
- Inspect the property once a quarter
- Be fair, honest, and make timely repairs
- Know how and when to use “notices”
- Only withhold the deposit for actual, itemized damages
1. Screen well and don’t discriminate
You can eliminate 90% of any potential issue by setting high standards and screening applicants thoroughly. In order to accomplish this, you must have a structured screening process that doesn’t discriminate against any of the protected classes.
2. Make rent payments easy and automatic
We made the change to automation several years ago and it improved our business almost overnight. Allowing tenants to pay rent online makes your life as a property manager so much easier. In fact, we’ve only had 2 late payments after switching to online rent payments.
Here are a few tips:
Require online payments in your lease (Most states allow this, except for California which requires you to allow one other method of payment (any method).
Do some research and use a reputable online rent payment company.
3. Have a rock-solid lease and stick to it
Remember, if it’s not in writing, then it doesn’t count.
The success of your business is highly dependent on the strength and fairness of your lease. Even if you only want to do a month-to-month arrangement, it should still be in writing.
There will always be that tenant that will try to punch holes in your lease, and if you don’t have a high-quality lease designed for your state, then you probably won’t be able to defend yourself.
4. Inspect the property once a quarter
If you’re not inspecting your rental properties at least once a quarter, then you might want to budget more time to perform this service. Regular maintenance prevents bigger headaches down the road.
If repairs are required, make sure you follow up with your service companies.
5. Be fair, honest, and make timely repairs.
Every successful business understands that quality and trust are the cornerstones of customer satisfaction. Property management is no exception. Making timely repairs will help retain good residents for longer periods of time.
6. Know how and when to use “notices”
Above all, proper use of notices, is the most common pain point for landlords and managers. Every state has their own requirements, and quite frankly, it’s a hassle to give “proper notice” before visiting the property or terminating a lease. But, as certain are death and taxes in this life, so are the requirements for proper notice. Don’t skip on it – you’ll regret it.
7. Only withhold the deposit for actual, itemized damages
It’s inevitable, something bad will happen. For example: A tenant who fails to give proper notice of leaving, or maybe abandons the lease completely, and leaves you with 2 months of unpaid rent.
We cannot stress the importance of only withholding the deposit for actual, itemized damages (material or financial). This can be rent, late fees, or the cost to make repairs to excessive damages.
Please understand that property management is more complicated and involved than these seven rules but following them will put you well above 99.9 percent of other managers and help to ensure your success.