How to Mitigate Risk with a Property Management Company
For both residential and commercial property management firms, there will always be an inherent risk that owners face. How property management professionals mitigate these risks is what sets them apart from owner-managed properties as well as those who have less-that-standard management practices.
As a property owner, things are bound to happen when people from various walks of life and backgrounds cohabitate on the same property – particularly in apartment complexes in a multi-unit dwelling. Rental units are subject to normal wear and tear, but property damage sometimes goes beyond what is considered normal. Of course, it is practically impossible to completely avoid even minor property damage, with the right practices and Professional Property Management the risk can be significantly lower.
How Property Management Mitigates Risk for Owners
So how do property managers mitigate risk for owners? The first step is comprehensive screening of potential tenants. While there is no way to know for sure if a tenant will damage the property at some point, there are some warning signs that experienced property managers look for. Legal record of damaging property can be easily obtained as well as conversations with prior property managers or landlord, however some other telltale signs may indicate that a tenant is not a good fit for the property.
When it comes to identifying potentially problematic tenants, credit reporting and identity verification are critical. With the advent of technology, property management pros have seen an increase in applicants who submit fraudulent documentation. Experienced property managers have all the necessary tools to properly vet prospective tenants as well as verify the validity of any documents submitted during the application process.
Even for tenants that seem to be good candidates based on their credit profile and income could still be problematic. For this reason, professional property managers go a step further by verifying information with past landlords. A prospective tenant may not have a derogatory credit report, however, their prior landlord may reveal issues surrounding their tenancy such as regularly paying late, law enforcement being called to the property multiple times, as well as complaints from neighbors. These are all things that will not be immediately visible running a standard tenant screening, so it pays to have the assistance of an experienced property management team to dig deeper.
Additional Ways Property Managers Mitigate Risk
Other ways property managers mitigate risk is by requiring and enforcing adequate renter’s insurance for each tenant. By requiring all tenants to carry renter’s insurance and communicating with insurers regularly, owners assume less liability in the event of tenant caused damage. This means that when the tenant destroys part or all of the property their insurance there a claim will be made against their insurance versus the owners’ insurance.
Security deposits also serve as a way to deter tenants from damaging property. Professional property managers have very clear verbiage inserted into leasing documents that advised tenants on what is considered normal wear and tear versus what is considered property damage. This verbiage is will also clearly explain in what instances the tenant’s deposit will be forfeited, either in whole or in part.
Trust the Professionals
The risks that come with property ownership are apparent and going it alone can be a mistake that many owners are not willing to make. If you need professional property management services from a team of experienced professionals serving greater Dallas, TX, look no further than Herman Boswell Property Management. A staple in the Dallas, Texas community for over 30 years, Herman Boswell Property Management provides the best in the industry to help owners realize greater profits, develop favorable reputations in the community, and mitigate risk.