Purchasing a rental home in the Fort Collins region can offer a diverse range of financial and investment advantages. However, many first-time landlords don’t fully understand the scope of responsibility that comes with owning an investment home. They assume that they won’t need the services of a Fort Collins property manager, opting instead to handle the many requirements of their rental on their own.
Unfortunately, navigating through various renter and property situations as they arise can promote a wide range of unexpected errors, negatively impacting a rental home’s overall return on investment. Some of the biggest mistakes first-time investment house owners often make when not partnering with a qualified property management firm include:
Miscalculating the Rental Rates
Sure, occupancy is important to maximize ROI; however, beyond having consistent tenants, it’s also essential to establish a competitive rental rate that also holds up against surrounding properties and earns you a profit. Many first-time landlords assume that all they’ll need to do is cover the mortgage when renting. However, determining your monthly rent can be tricky business, relying on a multitude of factors including size of the property, number of bedrooms and bathrooms, desirable amenities, neighborhood, and access to major roadways. An experienced property management team takes the guesswork out of what you can reasonably expect from tenants on a monthly basis. Your firm will carefully assess the property to systematically calculate what will stand in the current market temperature to get you the best final rate possible.
Not Understanding (or Ignoring) Rental Housing Legislation
Like any business, the rental home industry is rife with all manner of legislation that landlords must comply with throughout every tenant agreement. Not having a thorough understanding of what’s required of you on a local, state, and federal level can have dire consequences. Additionally, these laws and requirements can change at any time. Even landlords who have a thorough understanding of compliance standards may not realize legislation has been changed until it’s too late. A professional property management team makes it their mission to stay on top of all rental laws and regulations in your region to mitigate your risk and keep your property compliant at all times.
Dismissing Maintenance Needs
Ignoring even minor repairs and routine rental property maintenance needs can quickly escalate to larger, more expensive issues later. Yes, your tenants will typically alert you to any concerns or issues they may notice. However, that’s not always the case. Additionally, when your home is vacant, it’s completely up to you to find any outstanding maintenance needs before your next tenant moves in. Caught up in the chaos of their busy everyday lives, many rental homeowners may not notice that small compromise that, when unfixed, becomes a major problem. Property managers have the resources, experience, and insight needed to perform routine maintenance checks. Additionally, if they do notice something amiss, they will either be able to make the necessary fix or coordinate the repair on your behalf with a vetted contractor from their network.
Not (Properly) Screening Tenants
Failing to properly screen and qualify renters can prove disastrous for landlords of any property type. Many landlords, driven by the need to turn over a property as quickly as possible, find themselves tempted only to conduct a partial screening – or skip the process entirely. A thorough tenant screening helps ensure your applicants have no major red flags in their renting history and are capable of paying their rent, protecting your investment as well as your best interests. A management firm will prioritize the applicant vetting process, saving you time and money as well as offering you peace of mind that you’re moving forward with a qualified renter.
Not Managing the Paperwork
Many landlords only view their rental home as an investment. However, your rental property is actually a business and should be treated as such. Often, first-time buyers assume that the only paperwork required with their rental is collecting the monthly rent check – they realize too late into the process just how important it is to maintain a thorough and accurate paper trail. Property management firms have an extensive understanding of the documentation needed to comply with local and federal tax requirements, helping to both protect your assets and optimize benefits.
All Property Services partners with residential property owners to streamline the rental process and maximize ROI. When you partner with a qualified, experienced property management company, you can avoid some of the common mistakes rental homeowners make. Contact us today to learn more.