As a property manager, you’re probably well aware of the many things that are out of your control. You may have tenants who decide not to pay or make poor decisions. Or, you may have accidents happen at one or more of your properties. Either way, when these things happen, revenue inevitably takes a hit. But while it’s not possible to avoid all of the risks you face as a property manager, there are certain things you can do to manage that risk in a way that mitigates damages and improves debt recovery. To follow are a few such strategies.
Establish and adhere to a strict tenant screening process
The more careful and proactive you are upfront when evaluating prospective tenants, the less likely you’ll be to experience costly problems down the road. Make sure you’ve got clear and well-documented best practices in place for how each tenant will be assessed, being careful of course to avoid any potential legal missteps along the way. Here are five red flags to look for when screening potential renters.
Be a stickler for collecting and managing data
Having the right data on file is critical to your ongoing success as a property manager. Make it a policy to collect the following personal identifying information from tenants:
- Social Security Number (SSN)
- Driver’s License or State ID Number
- Employer Information
- Personal References
- Emergency Contact
Make sure you’re also carefully and securely storing any data you have, including signed lease agreements. The last thing you want is to lose a critical piece of documentation that could support your position if you were ever to face a legal battle.
Protect your investments.
As a property manager, you can prevent costly damages from occurring in the first place by keeping up with routine maintenance and staying on top of repairs as they are needed. This can save you a lot of money in the long run. For instance, investing in a service agreement with a local HVAC company can keep equipment functioning in good order for longer and prevent expensive breakdowns or replacements.
Requiring tenants to purchase and maintain renter’s insurance may also be a wise policy as it removes you from the mix should a loss occur. And, of course, maintaining your own insurance on the properties you own is also important.
Streamline the debt recovery process.
How much time are you wasting in an attempt to recover debt? Thankfully there are some things you can do to save that time and also reduce the amount of debt you’re chasing to begin with. For instance, you could take proactive measures to reduce rental payment delinquency.
Beyond this, you should also implement practices that will keep debt to a minimum and provide for faster, more streamlined recovery. Act quickly and consistently when attempting to collect debt and leverage automation to shift manual activities from human workers to machine.
As a property manager, you must be vigilant in staying a step ahead of expenses and debt. You may not be able to avoid all risk, but by implementing the four steps listed above, you can reduce that risk exponentially, protecting your company and your bottom line in the process.