When one invests in a rental property, their main goal is to get a good return on investment [ROI]. But to achieve this, you need to have the necessary skills, experience, and knowledge to properly manage your property.
There are common mistakes that are usually made by new property owners. These mistakes can be costly- something you would not want to experience. If you want to protect your investment from bad decisions, then it’s good to know some of the most common mistakes made by new property owners and try to avoid them. Here are some of those mistakes:
- Doing everything on their own
Owning a rental property is one thing, and running the property is another thing altogether. To properly manage a rental unit, you need to have the necessary skills, experience, and knowledge. The skills will help you tackle any challenging issues that may arise in your job as a property owner.
Owning a property has plenty of time-consuming tasks and responsibilities. It becomes even more challenging if you own a number of rental units. So it’s advisable to hire a reputable property manager from Real Estate Management LA to help you manage your properties.
- Hiring a property management company that does not offer comprehensive services
Not all property management companies are created equal. Some of them offer limited services, while others offer comprehensive services. For instance, if a company is only offering leasing services, it may not be the best option because they may not help you find the right type of tenants.
Hiring a property management company that provides comprehensive services can help you handle all the aspects of managing a property. They will help you market your property, screen tenants, collect rent, and handle repairs and maintenance.
- Setting the wrong rent prices
The key to making the most out of your property is to set the right rent prices. If you charge too little, you will end up with negative cash flow, and if you charge too high, you may find it difficult to find tenants for your rental units, leading to a loss.
Working with a property management company can help you with this because one of their responsibilities is to set rent prices. They will assess the real estate market and come up with the right rent price that will enable the property owner get a high return on investment [ROI].
- Not getting an insurance cover
One of the easiest and quickest ways to lose your property is failing to insure your property. Calamity can strike when you least expect. Your property can get burnt due to a fault in the electrical wiring. But if you have insurance against common misfortunes, such as floods, fire, earthquakes, etc., you won’t have to bear the loss alone.
- Failing to draft a detailed lease agreement
This is also another common mistake that new property owners tend to make. The lease agreement specifies the rules and responsibilities of each party [landlord and tenant]. It can help minimize issues between a tenant and a landlord. Unfortunately, many property owners fail to draft a detailed lease agreement- a mistake that can cost them a lot.