There is no doubt property managers have a tough job on their hands, possibly one of the toughest jobs out there today!
Reproduced with permission of Darren Hunter
However we consistently see the same mistakes occurring regularly in offices. It is rare to not see them in a department (our hat is off to those of you who do not make these mistakes!).
Here are the 10 big mistakes we see property managers making regularly:
1. Tenant default databases – There are two main databases used by most property managers across the country to check applicants, however what about lodging defaulting tenants on the database when they default? We find property managers either get into a ‘too-busy’ mindset or simply do not use a checklist system when a tenant vacates so the lodgement doesn’t happen. The result is the defaulting tenant goes back into the system and another property manager rents them a property, not knowing that they have defaulted previously.
2. Rent arrears – Not practising effective early intervention techniques can result in action taken when it is too late to quickly fix the problem. Allowing a tenant to get seven days or more behind before taking effective action is simply too late, and our tolerance can result in the tenant going past their point of no return to where they are unable to catch up. Being tolerant can be viewed as pro-eviction, whereas zero tolerance can be seen as pro-tenant as you might be tough on them for getting behind just a few days, but at least they are still in accommodation! In the latter case, the tenant, landlord and the property manager win, however where tolerance is allowed, nobody wins!
3. Routine inspections – Having too many routine inspections to complete in a set time block. Most states with legislation allow for a 2-3 hour time period to be given to the tenant in a letter, and unfortunately many property managers book too many into this time slot. This only results in rushed inspections not being done thoroughly and important issues being missed and not followed up. The final consequence is problems later on connected with the property’s condition.
4. Tenant selection – Not recording qualification details of applicants when processing their application. Most property managers do not record crucial comments when they have processed an application. Information like what comments were made by current and previous landlords or agents when called, who they spoke with and when, who they spoke with to confirm their employment and what information was collected. Other information not confirmed can be necessary identification copies, checking for any anomalies in addresses on identification copies etc. The main problem is later on when a tenancy fails and a landlord may want to hold you to account, what evidence do you have to prove you did your necessary checks and properly qualified the tenant? Certainly food for thought!
5. Discounting – As most property managers receive little-to-no training in winning new business, we can hardly blame them for this mistake! However, when we do not know how to effectively ask for the business using key scripts, and are then not able to overcome common fee objections, the logical solution that we come to is discounting to separate ourselves from our competitors. This action directly impacts the profitability of the business and results in property managers having to manage more properties to justify their position, resulting in burnout and resignation.
6. Signing up all business – Most property managers usually sign up any property that has ‘a roof and a front door’, not considering if the deal is profitable or not. As most do not use key profitability strategies to ensure the business is profitable, this results in a percentage of properties that are not only unprofitable, but also unworkable, contributing to a greater chance of management difficulty later on, and also greatly adding to property manager burnout and subsequent resignation.
7. No Landlord induction – We all understand the importance of tenant induction, however we do not consider that landlords must also be inducted to avoid conflict over issues like wear and tear, repairs and maintenance etc. Property managers regularly struggle with issues with landlords who simply have wrong or indifferent expectations. A solid landlord induction using a property owner’s handbook will overcome this problem, allowing us to thoroughly educate them upfront, proactively dealing with the issues before they can become an item of conflict.
8. Not returning calls and emails – By far the most complained about problem by landlords is that most property managers do not efficiently (if ever) return calls and emails! This is most often caused by not setting aside specific time frames in the day dedicated to returning calls and emails. With email communication on the increase, this issue must be overcome if a property manager is to succeed.
9. No daily planning – Most property managers would not plan their day before it begins. This results in tasks not being completed efficiently, and also greatly contributes to the feeling of being overwhelmed, ending in burnout. Daily planning is simply listing all the tasks and phone calls that must be done for that day, placing them in priority and then making them happen with the most important and urgent matters being handled first.
10. No file notes – When we conduct business performance health checks in most cases property managers are not making file notes of actions and/or conversations. Most justify this by saying ‘I can remember what happened’ and forget that the file note is no good for anyone else to access when the only place it is stored is in their head! If they are sick, go on leave or resign, this is when the ‘memory file noting’ system becomes a problem and can result in costly issues for the company to fix, when in a lot of cases money being paid out may not have been required if a file note was in place explaining how the situation was properly dealt with.
The best way to react if you identify that you are making these mistakes is to acknowledge that you are making them, and then put steps into place immediately to ensure that you do not make them again, otherwise they will just keep happening!
It is a great property manager who recognises that a mistake or error has occurred and then also does something about it!
Where will you stand with your mistakes from this point on?
All the best!
Darren Hunter - of darrenhunter.com is a national and international property management trainer, speaker, consultant and authority on property management, specialising in fee maximisation and profitability as well as time and stress management and property management productivity.