5 Hidden Costs of Poor Property Management
Dustin Edwards • May 21, 2021
Evaluate these Aspects to Maximize Your Investment
When you are considering making a move to a property management company in Long Beach it can be easy to focus on “what are the monthly fees?”. Of course fees are only part of the story when it comes to having a property management company. Find out more about the five hidden costs of poor property management to help you find the best possible match for your goals.
- Vacancy Periods - Each day that your property isn’t occupied with a tenant it is costing you money. Even if you own your property outright there are still baseline expenses of maintenance, taxes, and insurance that you will have to pay if you don’t have a tenant in place. As you are interviewing property management companies to see if they could be a good match for your property, dig deep to understand how long properties that they manage stay vacant. Ask specifically how long properties like yours (i.e. a 3 bedroom/2 bathroom home in the Los Altos neighborhood) stay vacant after a tenant leaves. Get them to be as specific as possible given both current market conditions as well as moments a few years back to help you see how long properties are truly staying empty that they manage.
- Cost of Maintenance - When most people think of the cost of maintenance they are thinking about the hard cost of a specific repair but that is only half the battle. Of course you do want to be cognizant that you are getting a fair deal on repairs ranging from a faucet to a water heater, but more importantly what repairs could be missed that could cost you more money later if they aren’t addressed? Items such as not replacing older dishwashers or having rubber hoses on laundry units (vs. braided lines) can result in massive repairs vs. addressing at smaller increments over time. Take the time to ask prospective property management companies how they approach maintenance, how they ensure on-going maintenance is fairly priced, and their philosophy to mitigate major items that could be avoided.
- Missed Rental Increases - Far too often we hear from new clients that they have had the same rent for years and that is because “they are afraid of losing a great tenant”. While we certainly don’t want properties to be vacant, we also don’t want to see owners miss out on additional income. While it might be easy to avoid a rental increase, not raising the rent (based on solid analysis of competitive market rents) is one of the ways to have your asset truly underperform. To help you avoid this pitfall ask prospective property management companies how they approach increases, when they recommend maintaining rents, and even how much of an increase could be expected when they do raise the rent.
- Unexpected Fees - All too often a good presentation or even a guarantee can have owners miss out on the total costs of a property management company. While most owners ask about the percentage of management fee they sometimes forget to ask if that is ALL of the costs of working with the management company. Don’t forget to ask for a sample invoice to see if there are move-out fees, marketing fees, or other such items that could impact your total cost of engaging with that company.
- Stress and/or Anxiety - Whether it is unexpected fees or something such as a lack of communication, the wrong property management company can cause you stress! Stress and anxiety can hurt your passion for real estate or worse put strains on your relationships with friends and family. To help you minimize the potential for stress, take the time to really ask questions of potential property management companies ranging from their communication strategy to even asking if you can speak to other owners to see how they like working with that company.
Finding the right property management services from the right company can be a challenge. If you’d like to find out how we can help you avoid the above mentioned pitfalls for your Long Beach rental call us today at (562) 888-0247. When you want a quick check to see how much your property could fetch in rent we invite you to fill out our Free Rental Analysis
where we perform a comprehensive comparison to share your rental stacks up to the competition.
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Your property’s roof is its first line of defense from the sun, rain, and wind. Which means it will eventually wear out. Many landlords overlook this since a roof is generally designed to last twenty or so years, and they simply forget until the signs begin to show. Below, we’ve compiled a short list of five signs it’s time to replace your roof for when doing property inspections. Tenant Complaints When your roof has become damaged, your tenants will likely be the first to notice. When tenants report water stains on the walls and ceilings, it's a sign that you should inspect your roof. In severe cases, your tenant may notice water dripping from roof leaks. This moisture, if left unchecked, can lead to the growth of mold and mildew, which can be a health concern for your tenants. Some tenants simply move out, assuming the odors or recurring respiratory issues are caused by the rental and not just the roof. This leaves you with a vacancy to manage, and if you’re unable to find the leak during this period, the following tenant may have a negative experience as well. Many landlords have found it beneficial to have property inspections regularly in order to preserve both the property’s value and the tenant’s trust. Roof’s Age Even with the highest quality materials, a roof still has a shelf life. Most roofs in Long Beach, CA, use asphalt shingles, and these generally last around twenty to twenty-five years. Once they've passed this threshold, the faults begin to show themselves. A sagging roof line is a sign that your roof is due to be replaced, as it's a serious concern. It often indicates that moisture has entered the underlying decking and caused some structural damage. From ground level, you may not be able to notice these problems. However, during an inspection of the property, an experienced inspector should be able to notice soft spots or contours on the roof. These forms of damage often get worse over time. Coordinating these inspections and preventative maintenance can be difficult for landlords with an extensive portfolio, which is why many enlist help. Shingle Damage Damaged shingles are one of the most obvious signs that your roof is deteriorating. If you ever notice cracking, curling, or patches with missing shingles, the roof is no longer providing adequate protection to your property. Although you can buy time with spot repairs, if the entire roof shows signs of damage, it’s likely time to replace the roof. Aside from protecting your property, the roof affects your property’s curb appeal. A patchy and worn-out roof can drive down the rental appeal. Prospective tenants will easily be able to spot the differences between pictures taken in the listing when compared to the property in person. This can not only hurt your chances of filling a vacancy, but it can also hurt your reputation as a landlord. Granules in Gutters After heavy rainfall, it's a good idea to inspect your rain gutters. If you or your property manager notice large amounts of black or gray granules, it means your roof shingles are breaking down. These granules are critical for shedding water off the roof. Once the granules fall off the shingle, the shingle begins to degrade faster under the sun and elements. If you’re not sure how old your roof may be, Loss of granules can be a strong indicator that your roof is nearing the end of its lifespan. Regular gutter cleaning and roof inspections can help catch these problems early before they become expensive repairs . Increase in Utility Bills Your tenants complaining about their utility bills increasing or poor temperature control in the rental may not realize the roof is to blame. A failing roof can result in subpar insulation and ventilation. This can lead to higher heating and cooling bills for your tenant. This can be frustrating for your tenants while putting more strain on the HVAC system. This puts more wear and tear on your HVAC system. Being aware of the warning signs and being proactive can protect your rental property, maintain tenant satisfaction , and avoid emergency repairs. If you need help inspecting your roof or you need help managing your Beach City rental property, we invite you to call us today at (562) 888-0247 or complete our Owner Application online .
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