The good news is we created the 7 Property Management Best Practices for successful property management. And, if you adhere to these best practices, it will put you above 99.9 percent of other managers, and help to ensure your success.
- Screen well and don’t discriminate. You can eliminate 90% of your potential issues by setting high standards and screening applicants thoroughly. But in order to accomplish this, you must have a structured screening process that doesn’t discriminate against any of the protected classes.
- Make rent payments easy and automatic. With over 15+ years managing properties, the action that has improved our business the most is offering (and requiring) tenants to pay rent online. The key to successfully using online rent payments is: Require it in the lease –
Most states allow this, except for California which requires you to allow one other method of payment (any method) and Use a reputable online rent payment company – there are dozens of companies that will help you collect rent online, but most are not very good so be wary.
- Have a rock-solid lease and stick to it. If it’s not in writing, then it doesn’t count. Your ability to be successful is highly dependent on the strength and fairness of your lease. If you don’t use a written lease, then we encourage you to change your ways. Even if you only want to do a month-to-month arrangement, it should still be in writing. Eventually, a tenant will attempt to punch holes in your lease, and if you didn’t invest in a high-quality lease designed for your state, then probably won’t be able to defend yourself.
- Inspect the property once a week. If you’re too busy to inspect a property at least once a week, then you are too busy to be a property manager. Usually, there is some sort of repair or issue, or regular maintenance item once a week that needs my attention. Even if we hire a contractor, we still like to follow up on the work, to ensure it was done properly. Doing so gives us an opportunity to inspect the entire premise.
- Be fair, honest, and make timely repairs. Whether you operate a maid service, build homes, run a law firm, or make the best gluten-free bread on the planet – every successful business knows that quality and trust are the cornerstones of customer satisfaction. As a property manager, if you are fair, honest, and make timely repairs, you will be able to retain residents for longer periods of time and be able to command more rent for your rentals. It’s really that simple.
- Know-how and when to use “notices.” As certain are death and taxes in this life, so are the requirements for proper notice. Proper use of notices, above all, is the most common pain point for landlords and managers. Every state has its 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.
- Only withhold the deposit for actual, itemized damages. Occasionally, something bad will happen. Perhaps it’s a tenant who fails to give proper notice of leaving, or maybe he abandons the lease completely, leaving you with 2 months of unpaid rent. It’s so important that you only withhold the deposit for actual, itemized damages (material or financial). This can be rent, late fees, or the cost to make repairs to excessive damages. You can’t withhold a deposit just because you are mad, or because the tenant found a loophole in your lease. You need to be able to prove the damages with receipts or a contract/lease. You can’t “double-dip” on the rent! Do the right thing! Most importantly, you can’t “double-dip” on the rent. For example, if a tenant fails to give proper notice when vacating, you could hold them responsible for the rent until “proper notice” is fulfilled. But if you find a replacement tenant within a few days, then you can’t keep the new rent AND the former tenant’s deposit – simply because you can’t claim any actual damages (other than a few days of vacancy) since a new tenant started paying.
We sincerely hope your property management business benefits from the 7 Property Management Best Practices.
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Obviously, property management in Northern Michigan towns like Boyne City, Boyne Falls, Charlevoix, Harbor Springs, Petoskey, and Traverse City is complicated and involves more than these seven best practices, but following them will put you above 99.9 percent of other managers, and help to ensure your success.
Good luck to you, and please let me know of any other “best practices” that you follow.