As a property owner, you are responsible for providing renters with a safe and comfortable living space. This is not always an easy task—especially in Detroit. Property management experts know that this city is one of the best for real estate investment opportunities, but landlords need to avoid mistakes to maximize success! Today we'll discuss five mistakes Detroit landlords make (and how to avoid them) with expert property management insights.
1. Failing to Screen Tenants Properly
One of those most important things owners need to do is perform a thorough tenant screening process to find quality renters. Skipping this process or using a free or online service can leave you with a bad tenant in your property!
Thorough screening includes verifying income, employment, and rental history. It's essential to check for a criminal background and consider someone's credit score when determining your next resident. If the potential renter has no money saved up for a security deposit or fails their credit inspection, they may not be able to afford your property!
Additionally, if prospective tenants are unable to pass the reference checks with previous landlords or property managers, this tells you that something went wrong in those relationships. It's best to avoid these individuals altogether! Placing bad renters can lead to property damage and rental income loss. In the worse situations, owners face a lengthy and expensive eviction process to remove a terrible resident.
2. Setting the Wrong Monthly Rent Amount
Metro Detroit property management companies know that setting the wrong monthly rent amount can lead to income loss. This is one of the most common mistakes made by landlords—especially for new property owners who are unaware or inexperienced in managing a rental property.
When the rent is too high, residential property owners won't find tenants willing to pay that much to live in a rental home. If the rent is too low, a property manager can tell you that landlords lose money every month—even when their residents pay the rent on time.
To avoid this mistake, work with a property management expert to run a rental market analysis and determine the ideal market value rents are in your area. This will help you determine the ideal rental amount for each property in your real estate investment portfolio.
3. Underestimating Rental Property Expenses
You might be surprised at how much property maintenance can cost. If a property owner isn't prepared for the expenses, they can quickly add up and reduce the property's income-producing potential. However, maintenance isn't the only ongoing cost when operating rental properties in Detroit.
Property managers recommend setting aside a portion of your rental revenue each month for property maintenance and other costs, including landlord insurance, property taxes, and more. Not adding these line items into your budget could leave you with unpleasant financial surprises throughout the year!
When underestimating ongoing costs, rental owners can become disappointed in how long it takes to generate the returns they hoped for as investors. Work with a Metro Detroit property management firm to estimate potential expenses and make sure the monthly rent amount is enough to cover costs and generate positive revenue.
4. Tackling Maintenance On Your Own As the Property Owner
Another common mistake we see as property managers in Detroit, MI, is when owners choose DIY maintenance solutions instead of professional services. While it might seem like you're saving money by responding to maintenance requests and handling repairs yourself, you could actually spend more when those fixes don't hold up over time.
For example, if your rental property has a roof leak when it rains or snows—and this frequently happens in Michigan—you'll need to fix that problem ASAP before further damage occurs! Doing so with unqualified help can lead to even bigger issues down the line and take much longer to repair than hiring a reputable contractor to handle the project correctly. When property owners attempt these types of emergency repairs themselves, they also risk injury—especially because roofs are high off the ground!
Choosing professional maintenance services means landlords have quality repairs to keep properties in excellent condition, maximize budgets, and protect tenant safety.
5. Not Hiring a Property Management Company
The best way to avoid all of these mistakes is to hire the best Detroit property management company! Whether you have a few rentals in your investment portfolio or hundreds of properties, the right property manager sets the ideal rental rate for each unit, handles maintenance with a team of professionals, and ensures every property has a screened and quality resident.
Avoid Costly Mistakes With the Best Detroit Property Management Company
Whether you're a new landlord or have been in the business for years, it's important to know that certain costly pitfalls can be avoided. If your last DIY repair cost more than hiring a contractor, it might be time to find an experienced property management company like Own It Detroit! We have handled hundreds of rentals in the Metro Detroit area, and we know how to avoid expensive mistakes before they happen. Talk with one of our seasoned experts today so we can help you get started with the right property management services and support!
Learn other ways that the right property manager helps you avoid expensive mistakes. Download our free guide and find the best Detroit property management company!