Now that you’ve invested in real estate, signed all the paperwork, cleared your loan with the bank, and finished repairs and renovations, it’s time to turn your attention to managing your property.
And likely, you’re quickly becoming familiar with the challenges of property management. Luckily, you can anticipate the most common issues that might come your way, ensuring your property is profitable, tenants are happy, and your stress levels remain low.
While cleaning toilet bowls and repairing washing machines may not be how you envisioned the next step on your real estate mogul journey, there’s no need to worry.
This article will discuss the top 5 sticky situations you can expect as a landlord and how to proactively solve them.
The best way to handle disputes between tenants is before they occur, by outlining the expectations around noise, the right to habitability, and the right to a quiet environment in their leasing agreement. Then, when clashes occur, you’ll point to previously signed paperwork to remind tenants of what they’ve agreed to.
Generally, tenants will settle disputes on their own, long before you catch wind of it, but when repeated flare-ups between the same neighbors arise, you may need to step in as a mediator at some point. If you find yourself in this position, ensure you’ve armed yourself with the tools you need to resolve conflict efficiently, fairly, and respectfully.
Hear the tenant’s complaint fully, and with genuine concern before contacting the offending party. Once you’ve given proper attention to both sides, be sure to document any communications, including meetings you have to resolve the issue.
The other type of conflict you may encounter will be between you and the tenants. When this occurs, first take a moment to leave your emotions at the door. There’s a difference between running a business and arguing with a neighbor. Then, check where you stand legally, depending on the situation. Finally, if you discover you’re in the wrong, then correct the problem amicably in a reasonable time frame.
Landlords that can recognize and correct mistakes without unnecessary conflict are rewarded with higher levels of tenant retention. People like to live in places where they feel seen, heard, and cared for.
Leasing to the right tenant is crucial to keep your property both occupied and profitable. It pays to get it right the first time. While sometimes tenant turnover is out of your hands, costs can get out of hand if you are not vigilant.
According to TransUnion, the eviction process can cost an average of $3,500. This comes from the time and money you spend in advertising and showing the property, running background checks on potential tenants, the administrative work required to onboard a new tenant, and the fact that you aren’t collecting rental income while the property is vacant.
A good landlord or property manager will shorten the time between tenants by:
If tenant turnover is a tricky issue for your property, you may want to explore APM’s more thorough guide on tenant retention.
To avoid late payments, your property’s late fee policy should be clearly communicated with tenants as early as the interview process, then reiterated several times within the paperwork signed to secure the lease.
If communicated effectively from the get-go, you can avoid imposing late fees for the most part. Clarify the wording in tenant paperwork to specify how late fees will be calculated and when they will apply. Do you accept rent through the 6th of the month at midnight? Or is it until 8 am on the 1st of each month?
Whatever you decide, build the application of late fees automatically into your rent collection systems. As soon as the deadline of your grace period passes, a penalty automatically jumps into action.
To new landlords, this may sound coldhearted, but it’s the type of system you need to stay profitable and run your business efficiently. Your tenants are signing off on what will happen to them past their grace period. Ensure that penalties around late rent payments are spelled out clearly in the lease, that you’re aligned with local laws, and that you stick to the agreement rigidly.
Maintenance issues are one the most common and time-consuming types of problems a landlord can expect to crop up regularly. Don’t let maintenance get messy. Instead, stay ahead of the game by keeping these five key maintenance mainstays on your radar.
Landlords are responsible for building maintenance and protecting the safety of their tenants. One essential way to do that is to verify that you’re adhering to building codes. This can include safety needs such as smoke and carbon monoxide detectors and accessibility offerings like ramps and elevators. These can vary state-to-state, so make sure to check your local guidelines.
Before renting your unit, double-check the trash and sanitation schedule. Does it run smoothly and regularly? What will tenants need to do each week with their trash? Including these details in rental agreements guarantees that communication on sanitation is spick and span from the get-go.
Between tenants, you’ll want to review the utility situation on your property. If you’re covering any utilities as the landlord, make sure to double-check all meters are working correctly and that there aren’t any leaks anywhere along the way. Even a small leak can be costly in the long run. Also, see if your local ordinances include air conditioning as a landlord's responsibility. Finally, you’ll want to make sure fast internet is available in your area. While you’ll rarely cover that expense as a landlord, it’s a necessary utility to provide access to.
Security is a big selling point for many potential tenants. Make sure yours is up to date and fully functional before renting a property. Are all cameras recording as they should? Do doors to common areas lock automatically and close easily? If your building has security that goes above and beyond what’s expected for your neighborhood, you can even include this as part of a property’s advertisement. Security sells!
In multifamily properties, you’ll likely have a few common areas. Are they all clean and ready for new tenant use? Do the washing machines work? Is the gym equipment maintained? Does the pool need a new filter? Are there any other landlord repairs necessary? Between tenants is a great time to check in on the regular maintenance needs.
While we’ve outlined a few of the basics here, if maintenance is a particularly persistent issue for you, peruse APM’s complete Go-To Maintenance Guide.
As a landlord, you have many plates to keep spinning, especially if you have more than one property to run. Lack of organization can really hamstring your operation and future scalability. It’s imperative to stay organized to effectively manage your property and boost profitability.
You’ll need to create streamlined systems, automating tasks where you can, to keep things running smoothly. There are countless online organizational tools to digitally keep track of accounting, rent payments, maintenance requests, and more. Some examples include TurboTenant and Tenant Magic for specific parts of the job and comprehensive property management software like Buildium, to name a few. Whatever you choose, repeatable systems and timelines are a landlord’s best friend.
And if organization was never your strong suit, then don’t worry. There are always experts to hire to overcome organizational hurdles for you.
If you’re looking for an easy button to conquer these common landlord issues, consider partnering with a property management company. Working with a property manager means you’ll have an expert in all the areas where you may lack experience. Plus, many property management companies only charge a percentage of your profits, incentivizing everyone to earn more!
Property management can be unpredictable, but that doesn’t mean there aren’t simple steps you can take to handle common issues. With these tips, you’ll be ready for what’s ahead.