Seattle Property Management: 5 Common DIY Property Owner Mistakes

Do you consider yourself a DIY property owner? Perhaps you know how to fix a faucet leak or are skilled at preparing spreadsheets and forecasting. We all like to save some money, and being involved as much as possible in property management is a great way to learn more about the business and become a top investor. 

However, whether you're a new investment property owner or have a couple of assets under your belt, there are always blind spots that can cost time and money! 

That's why this blog looks at the five most common mistakes property owners make when doing it themselves, plus how Seattle property management companies can help keep things on track.

5 Common DIY Mistakes Property Owners Should Avoid

So, what could you potentially do wrong (with the intention of doing everything right) when managing a rental property? These five issues could be the reasons why your property doesn't generate the returns you need. 

1. Inadequate Tenant Screening 

In many ways, a solid tenant screening process is your first line of defense against poor tenants, which can lead to ongoing issues, legal battles, costs, and in the worst-case scenario, the dreaded eviction. 

A thorough tenant screening process should include a background check, criminal history check, proof of income, and reference follow-up, including with a previous landlord. Tenant screening also requires a knowledge of the relevant statutes and anti-discrimination laws to avoid illegal questioning or practices. 

The screening process is critical for all property owners looking to protect their investments and maintain good owner-resident relations. So, if you're skipping any of the elements we mentioned above, you're putting your properties and income at risk. 

2. Failure to Perform Adequate Rental Analysis to Set an Appropriate Rate

There's an art to setting the perfect rental rate. This process requires an analysis of several factors, such as the location of your property, proximity to amenities, cost of the property, rental demand, and more. 

One of the most common processes is to run 'comps' (comparables), which is an analysis of the local rental market by comparing the rental rates of similar properties in your area. Rather than starting with the question of "how much can I rent my house for," investors will look at how much comparable homes are renting for in the area and work backward.  

Many will consider the assistance of property management companies at this stage. Not only do property managers have a good idea of how much rent to set, but they have access to databases such as the MLS (multiple listing service), which provides data on rent and rates in the local area. Without a property manager or real estate agent, the MLS is not accessible to the general public. 

By setting the wrong rental rate, you're locking yourself into a contract in which the cash flow may not be adequate to cover costs such as a mortgage, maintenance, and more!

3. Performing Maintenance in Place of a Professional

Fixing it yourself seems like a good idea and a great way to save money. Even after a couple of YouTube videos, you might feel like you know what you're doing. However, performing high-level maintenance tasks in place of a professional can be more costly in the long run.

There is also the question of public liability ramifications, licensing, and insurance. Depending on local regulations, doing your own plumbing and electricity may be illegal. At the very least, you may need specific permits to conduct some repairs. 

In most cases, you're much better off financially (and mentally) leaving jobs in the hands of the professional. If you're not sure where to find the experts you need, property managers such as Real Property Associates have long-standing relationships with trusted vendors and maintenance professionals who will do the job to the highest possible standards.   

4. Poor Financial Forecasting or Unrealistic Expectations 

As a property investor, there's more that goes into success than collecting monthly rent and making mortgage repayments to build equity.

From appliances to ongoing maintenance costs and even maintenance emergencies, underestimating costs will leave you high and dry with very little wiggle room if things get tough. In addition, overestimating your cash flow may lead to mismanagement or taking on too much debt. A Seattle property management group can set you up with the right financial plan and forecasting to help you achieve your property investment goals.  

Part of this is taking a conservative approach to financial expectations and being cautious when forecasting expenses and cash flow. 

5. Not Utilizing a Property Manager to Help

While we've mentioned some of the most common mistakes DIY property owners make, investors can commit many more errors without professional guidance.

Thanks to experience, insight, and network, a property management company will set you up for success by tackling all the above steps (and more). The right property managers know the tricks of the trade to help you avoid costly mistakes. 

Use a Seattle Property Management Group for Stress-Free Management

By leaving your property in the hands of a competent property management group, you're eliminating errors and setting yourself up for property investment success! Reach out to Real Property Associates to learn more about how we can help you avoid expensive mistakes and, instead, reach your real estate investment goals. 

To learn more about what you need in a property management expert, download our free "Guide to Finding the Best Property Manager in Seattle!"