3 Things That DIY Landlords Skim On But Professional Property Managers Don’t
Imagine that you’d just acquired a new investment property. Managing your rental seems easy enough, so a lot of people do it on their own. They will take photos, list their property on rental sites, schedule interviews, conduct interviews, and background checks. First time landlords are usually on a tight budget and do not have the means to hire a professional property manager–so, can’t blame them there. However, this may cost them money in the long run. Here are 3 things that DIY landlords may skim on, but professional property managers don’t.
Not rekeying locks
90% of the DIY landlords who transfer their property management to us admitted that they didn’t change the locks from tenant to tenant. Some of them do that out of good conscience and want to be green. After all, changing locks every 2-3 years is indeed very wasteful. Think about the amount of metal pile-up in the landfill if everyone tossed their old locks every couple of years. Truth is, you can just hire a locksmith to REKEY a lock. You can think of rekeying as reprogramming the locks so that they no longer work with the old keys and only opens with the new key. 99% of the residential locks can be rekeyed by a locksmith and it usually only costs $100-$130 to rekey all the locks in a residential unit (usually no more than 5 locks). Rekeying them gives the landlord liability protection against any kind of claims arising out of break-ins that new tenants may experience after they move in.
Going with the cheapest vendor
There are many handyman and service vendors out there that can service your rental properties. As a consumer, it’s natural to go with the cheapest option, assuming that the quality is the same everywhere you go. As professional property managers, we choose our vendors very carefully as we believe that it is important to build a good relationship with a team of vendors who we can rely on. Reliability is often the most neglected factor when it comes to the service industry. When a tenant calls us for a repair request, we make an appointment with the tenant for a handyman to go take care of the issue. Once the appointment is set, we will make sure that he will show up on time. In our experience, vendors who charge the lowest rate are typically overbooked. If one job is slightly delayed, it will have a domino effect on his schedule. When we take over the management from other property owners, the most common complaint we heard from tenants is that the handyman hired by the landlord failed to show up/was late to the appointment. This is usually the first crack in the landlord-tenant relationship.
Skipping annual inspection
After months of showings, DIY landlords often celebrate after they get the first month of rent. If tenants don’t contact them, that’s good news. No news is good news. They are afraid that having extra contact would cause the tenants to bring up unnecessary issues. “By the way, since I have you on the phone, the faucet is a little loose. Can you send someone to check on it?” Some may even forgo opportunities to raise the rent for this reason. One of my clients said “I haven’t raised the rent for 10 years because the tenants don’t complain. It’s been years since I stepped foot inside the property.” This is a red flag! While most tenants are good people, landlords and property managers shouldn’t have a mentality of “no news is good news”.
As property managers, we conduct a yearly inspection of all properties that we manage. This allows us to spot any potential maintenance issues before they become real issues. We will make sure that tenants are not keeping pets, there is no mold build-up, and no illegal activities are going on in the property. This way, we can prevent prohibited pets from ruining the carpet, potential liability arising out of the mold or lack of ventilation, prevent rental properties from turning into illegal marijuana grow houses–you name it. With an annual inspection, we can prevent a $200 problem from becoming a $2,000 problem.
Managing rental properties by yourself is like driving a car without insurance. It’s okay for 99% of the time, but when things go wrong, it can be very costly. Do not skim on these issues.