Managing a rental property can be a rewarding experience, but it is not without its challenges. Whether you are a seasoned property manager or a new operator, you are likely to face several challenges when it comes to managing your rental property.
In this post, we will discuss four common property management challenges and provide tips on how to tackle them.
Challenge #1: Managing tenant turnover
As a property manager, attracting and retaining good renters is essential for the success of your property. High-quality renters pay rent on time, take good care of the property, and have both direct and indirect impacts on property value.
One of your most important challenges as a property manager is keeping your vacancy rates low while carefully qualifying great residents. We’ve written a whole article on lowering your vacancy rates, but here are some “best-practices” for attracting and retaining high-caliber residents:
Price your property competitively
Pricing your property competitively is essential to attract high-quality renters. Research the local rental market to determine the fair market rent for your property. If your rent is too high, you may scare away potential renters; if it's too low, you will unnecessarily lower your property’s NOI. Setting an appropriate rent price will also help you to avoid certain rental scams.
Use online rental listings
Online rental listings - like those provided by Apartments.com and Avail are an excellent way to attract potential renters. Use high-quality photos and descriptions to showcase your property. Make sure your listing is accurate and up-to-date, including information about the property's amenities, location, and rent.
Be responsive and communicative
Respond promptly to enquiries from potential renters and schedule property tours as soon as possible. Being responsive and flexible with your communication and responding promptly to renter requests and concerns builds trust and goodwill.
Offer flexible leasing options
Be flexible with lease terms, such as allowing renters to lease month-to-month, renew their lease easily, or secure reasonable accommodations for pets. Offer security deposit alternatives and other flexible options that cater to variety of renters, including the growing demographic of freelancers and gig workers.
Conduct thorough tenant screening
Conducting thorough tenant screening is essential to managing turnover well. Conduct background checks on all potential residents, including credit checks, criminal history checks, and eviction history checks. Verify employment and income to ensure that the renter can afford the rent. Consider requiring a minimum credit score or income level for renters to qualify.
Use modern technology
It's worth looking at some of the proptech solutions in the real estate industry that may help you out where renter screening, unit turnover, and other common challenges are concerned. Renter screening services provided by Avail and First Advantage offer a number of incredible tools at an affordable rate. Lease guarantee and rent coverage insurance products like TheGuarantors' Rent and Deposit Coverage offer options that mitigate your risks of rental income loss while qualifying a wider pool of renters. These services can help streamline your operations, fill vacancies faster, avoid evictions or rent defaults, and protect your property’s rental income in the event of rent defaults, vacancies, lease breaks, holdovers, damages, and more.
Challenge #2: Managing prompt rent collection
Collecting rent in a timely manner is essential to maintain healthy cash flow and keep your rental property profitable. Late or missed rent payments can cause financial strain and make it difficult to cover expenses such as maintenance, repairs, and more. It can be challenging to ensure that all of your residents pay their rent on time, but with the right processes, it’s possible to procure on-time payments regularly from residents.
Set clear expectations
Setting clear expectations with your renters is essential to collecting rent in a timely manner. Make sure your lease agreement includes clear and concise language about rent due dates, late fees, and acceptable forms of payment. Communicate these expectations to your renters at the beginning of the lease term and provide reminders as necessary.
Offer convenient payment options
Offering convenient payment options can make it easier for renters to pay their rent on time. Consider accepting online payments, automatic withdrawals, or mobile payments. Make sure your payment options are easy to use and accessible to all renters, regardless of their technological proficiency. You can also consider offering your residents a discounted rate or some other incentive for paying rent early.
Send payment reminders
Sending payment reminders can help prevent late or missed rent payments. Send reminders via email, text message, and/or resident app a few days before rent is due, and again on the due date if payment has not been received. Consider offering incentives for renters who pay their rent on time, such as a discount on rent or a small gift card.
Be proactive with delinquent tenants
Being proactive with delinquent tenants is essential to collecting rent in a timely manner. Reach out to renters who are behind on their rent as soon as possible to discuss payment options and address any underlying issues. Consider offering payment plans or other accommodations to help renters get back on track.
Use rent coverage insurance products
All of the above mentioned practices are crucial for collecting rent on-time. But sometimes, no matter how optimized your processes are, your renters can still struggle to make payments. In this case, it’s important to prioritize protecting your property’s income - for your security, and that of your other renters. Rent coverage insurance products are one way of insuring your property’s income in the event that a renter defaults on their payments or breaks their lease.
Challenge #3: Managing maintenance and repairs
One of your central responsibilities as a property manager is to ensure that the properties you manage are in excellent condition for both new and existing residents. This includes managing maintenance and repair costs, which can quickly add up if not properly controlled, and managing maintenance vendors to ensure they are providing prompt, high-quality repairs. Luckily, there are some general property maintenance guidelines you can follow to ensure that you’re on the right track:
Establish a maintenance schedule
One of the best ways to manage maintenance and repair costs is to establish a maintenance schedule. A maintenance schedule will help you keep track of when certain tasks need to be done and whether repairs are being completed in a timely manner for your residents.
When dealing with repairs, prioritize them based on urgency. Urgent repairs, such as broken pipes or electrical issues, should be addressed immediately. Non-urgent repairs, such as damaged paint or loose cupboard hinges, can be scheduled for a later date, when it's more convenient and cost-effective for you and your renters.
Get multiple bids
When seeking out repair services, especially if you don’t already have a trusted vendor list for your property, get multiple bids from different contractors. This will help you compare prices and ensure that you are getting a fair price for the work being done. Additionally, you may be able to negotiate a lower price by getting multiple bids.
Complete routine preventive maintenance
Preventive property maintenance involves performing regular maintenance tasks in order to prevent problems from occurring in the first place. This can include tasks such as cleaning gutters, replacing air filters, and checking for leaks. By performing preventive maintenance, you can avoid more expensive repairs down the line.
Use proptech apps to streamline maintenance processes
There are many technology solutions available that can help streamline the maintenance and repair process. For example, property management software can help you keep track of maintenance schedules, prioritize repairs, and manage work orders. Additionally, some contractors may use software that allows them to provide real-time updates on the status of repairs.
Challenge #4: Managing property security
Crime prevention and security are always concerns to consider as a property manager. Ensuring the safety and security of your properties and residents requires an approach that covers both potential criminal activity and potential safety hazards within the property itself:
Maintain good lighting
Well-lit parking areas, stairwells, common areas, and outdoor property areas and grounds serve the dual purpose of deterring crime and improving safety (for example, a dark stairwell is more of a tripping hazard than a well-lit one). Motion-sensor lights are useful for areas where constant illumination might bother residents at night.
Use security cameras
Security cameras are an excellent way to deter - and track - potential criminal activity on your property. They should be placed in outdoor areas to give a good view of building entrances and exits and outdoor common spaces, and may also be placed in lobby areas, common rooms, or building hallways, depending on your building’s security needs.
Install an alarm system
In large buildings, a PA system or alarm system that allows you to address all of your residents and provide instructions in the event of an emergency is a good safety investment. Additionally, a building alarm that will trigger in the event of fire, or in the event that someone attempts to break in through a gate, door, or window is essential.
Have a written emergency plan - and make sure your residents know it
In the event of a disaster or emergency, you should have emergency plans in place for property evacuation, shelter-in-place, building intruders, or other safety concerns. Make sure your residents are aware of these procedures via posted signs, or even resident events that focus on “health and safety” training. Regularly review and update your security measures to ensure that they are still effective and up-to-date, and ensure that your staff and residents know where to access emergency features like fire escapes, first aid kits, etc.
Conduct regular property inspections
Beyond potential criminal activity, it is important to ensure that your properties are free from hazards that could harm tenants. Conduct regular inspections of the to identify and address potential hazards such as faulty wiring, leaky roofs, mold, burned-out lighting, damaged locks or gates, etc., as well as compliance issues like ADA accessibility. Check all smoke detectors, carbon monoxide detectors, and fire extinguishers regularly. Train your maintenance team to recognize and report potential hazards and have a process in place to address them.
By taking a comprehensive approach to property safety and security, you can help protect your residents, minimize risk and liability, and create a safe, welcoming environment at your properties.
Successful property management
Managing a rental property comes with a variety of challenges, but with the right strategies and tools, you can turn them into opportunities to improve your residents’ wellbeing and your property’s success.
Whether you’re managing turnover, rent collection, maintenance, security, or any other property management challenge, there are innovative solutions available to help your properties operate at their fullest potential.
If you are interested in solutions that help you mitigate risk, qualify great tenants, and insure your property’s income, TheGuarantors would be happy to put together a custom plan for your rental properties. With the right partner to help you, property management challenges can become property management successes.