Owning and leasing a property in Colorado can be an extremely lucrative venture. However, renting it out could be challenging. Even when you have the nicest of tenants, they will always have queries, demands, requests, etc. Attending to these in addition to timely maintenance of the property can be stressful, frustrating, and time-consuming. When you put up multiple properties for lease or rent, managing such investment properties on your own could be tough. That’s where a reliable Property Management company like Worthross Colorado can help.
When making use of a property management company, clients need to avoid some common pitfalls. If they are not taken into consideration or discussed before signing a contract, several issues may arise later on, which could turn out to be big headaches.
There are some common pitfalls you should avoid when hiring a property management company in the state of Colorado.
- Not negotiating property management fees and other charges in advance
This is often the reason why many Colorado homeowners choose to take the DIY route rather than hiring a property management company. Most property managers charge a management fee between 7-10% of the rental income. There are additional charges too which include the cost of setting up a property, advanced marketing, organizing showings, and maintenance coordination, among others.
Some companies may even charge cancellation fees, renewals fees, extra maintenance fees, etc. It’s true that all these charges will lower a homeowner’s overall profit. But the mistake many make is to not even negotiate these charges with their short-listed property management companies. Quite a few property management charges are negotiable. So if homeowners do their homework well by getting a few quotes from a handful of property management companies and then negotiate based on what the prevailing market standard rates are, they are likely to be able to lower the costs a bit.
Additionally, you need to keep an eye out for the additional fees. That’s because some property management companies may claim to charge a low management fee but in reality they could end up charging additional fees on the side which makes the total payables escalate.
Keeping these factors in mind would help you hire specialists to manage your property and ensure it continues performing at its peak while enjoying some significant savings.
- Hiring a property management company with a lack of involvement
A reputed and reliable property management company is likely to manage multiple properties – from community associations and multi-use complex regimes to multi-family condos, and more. Thus, if you think the company will manage just your property and be there to solve issues at the drop of a hat, you are mistaken. But this shouldn’t mean the company would display a lack of involvement in the property it manages. Contacting some of the past clients could be a good way to evaluate if your chosen property management company places a high priority on all the properties they manage – irrespective of their sizes.
Sometimes, owners try to make up for their chosen company’s lack of involvement by trying to take a hands-on approach. They try to hover over each move the company makes and attempt to get involved in every decision that the company makes related to their property. However, most property management companies have a hands-off approach and are not likely to involve the homeowner for minor maintenance issues, tenant issues, or other trivial matters.
Since they are equipped to competently deal with such issues and have learned the best way to do so, excessive interference on the homeowner’s part may make their work difficult. So while you should avoid hiring a company with a lack of involvement, you shouldn’t attempt to be hands-on all the time either. A simple way to avoid such pitfalls is to hire a reliable company like Worth Ross in Colorado that has an impressive success rate.
- Inexperienced about Colorado’s laws and regulations
Whenever individuals put up their Colorado property for rent, they would be faced with the possibility of running into some type of landlord-tenant issue. The chosen property management company by such individuals should be aware of the state laws, say Colorado’s Fair Housing Act for instance and help both tenants and landlords comply with them. Additionally, they should be able to get legal help for the most common issues faced by landlords, some of which could be:
- Ensuring the rental lease is in compliance with the state laws.
- The steps that should be taken to evict tenants who are not paying rent.
- Circumstances that allow a landlord to hold a tenant’s security deposit and the period for which such deposit can be held.
- The types of deduction a landlord can make from a tenant’s security deposit.
It’s not just the landlords who have rights. Under Colorado’s leases and rental agreement laws, both landlords and renters have particular rights and responsibilities. So being aware of the laws and regulations as well as legal compliance is a must for property managers. Hiring a company that has been in business for long such as Worth Ross would mean not worrying about whether all the applicable laws and rules of property management would be followed.
But when you put your trust in inexperienced people, usually in an attempt to cut corners, you may end up hiring people who may not be well aware of the legal provisions or know how to navigate issues, as and when they arise. This could cause big inconveniencies and may even make you pay hefty legal bills for violations or lawsuits. Thus, this pitfall is best avoided.
Though competent property management companies charge a fee, they are experts at taking care of rental properties so their owners don’t have to shoulder the burden and invest their time and effort. However, there are certain pitfalls to hiring property management experts as mentioned above, and not exercising due diligence could cost you dearly. Therefore, you should do adequate homework, ask for referrals, and check with a few past clients, if possible, to find licensed and insured Colorado property managers. An easier way is to trust a reliable name in the industry like Worth Ross.