Why Property Management Companies Fail
Property management may seem like an easy task: just buy some houses and manage the property. But, as you take on more and more units, the workload may become overwhelming, causing your company to fail.
Mistake #1 Taking on Too Much Responsibility
Increasing the number of units to manage seems like a dream because it means more money. Unfortunately, it also means more work, especially if the properties are spread out across the city or even the country. It’s best to start off slow and see how much work you can handle at once. If you really want a lot of property to manage, consider investing in one multi-unit building. You’ll still have a lot of work to do, but it will all be in one central location, making it easy to handle. Don’t forget that as your management company grows, so should your staff. With a full staff, you can ensure all your tenants remain happy without overwhelming yourself.
Mistake #2 Not Hiring a Skilled Bookkeeper
One irreplaceable role you must hire, even when your business is small, is a skilled bookkeeper. It’s easy to justify trying to do the bookkeeping yourself to save money, but you’ll only end up making mistakes, unless you have training in bookkeeping. Some common problems associated with trying to do your own bookkeeping include incorrect tracking of rents, inaccurate expenses and missing income. Having a qualified bookkeeper means your financial information is accurate, which allows you to see potential financial problems in the future and plan accordingly.
Mistake #3 Failure to Actually Manage the Property
Another common mistake property management companies do is forgetting to actually manage the property. This is especially a problem for small, overwhelmed companies. Tenants’ complaints and requests get ignored or forgotten. As you fail to manage the property, the tenants become irritated and are more likely to leave. It is essential make sure to answer tenant concerns as soon as possible. Even better, try to anticipate problems before they occur. For example, if you know the roof is getting old, replace it (or at least have it inspected) before the tenant starts complaining about a leak.
How to Succeed at Property Management
The best way to succeed at property management is to understand that it’s a business, so you should treat it as such. You need to have a business plan and follow through with it, which means understanding potential dangers, hiring a qualified staff, and treating tenants with respect. One great tool we know of for improving your property management company is a website with great tools and features. A good website can make it easy for you and your tenants to communicate.
Don’t let your property management company fail because you forget to treat it like a business. Avoid these three common pitfalls, and ensure your company succeeds.
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