As you may know we have a property management division within our team, www.AZPropertyManagementGroup.com to help our investment property owners manage their properties and maximize the overall return. There are a few things that commonly pop up as we take on properties that I thought I would discuss here. This is not written to poke fun of anyone, it’s to shed light on the problem areas we are commonly seeing so that you can perhaps make an informed decision on whether you need a property manager to help or not. So here are three very common fails we are seeing…
- Not running it like a business. Real estate is valuable, it can be the single best investment you will make in your life. Don’t run your business on a whim or gut feeling, run it on sound business principals and proven models to ensure success. I’m surprised how many people that own an investment property decide to handle it on their own without any experience whatsoever. There are huge consequences to doing things wrong in this business so be aware!
- Running on emotion. Making decisions on gut feelings or emotions is not the way to operate. You MUST follow a business model to have success. This is very common because the owner may lease the former family home, or has become too emotionally attached to the home while purchasing. Or very commonly we see landlords lease to friend, family or even become friends with the tenants. This can lead to Landlord Tenant violations and other issues like not increasing rent according to market rent or spending too much or too little on maintenance to keep your buddy happy. You need someone to be the buffer, someone to be the bad guy when rent needs to be increased after the lease term. Yes, spending a little on property management will pay for itself over time by avoiding these fails.
- Lease poorly written. We see this one all the time, and perhaps can be the most damaging if ever challenged in court. We take countless classes and attend seminars and meeting with attorneys to learn how to properly write a lease to protect the owner. I’m surprised how many people out there simply write their own without any education on the matter. Be very careful here, you can end up massively in debt and have very serious charges brought against you for simply writing something wrong. And most the pre-printed leases available out there contain provisions that should NOT be used. There are very strict laws out there be very careful.
If you need assistance with property we are happy to help, please let us know.
