When you have an income property, you have the option of managing it yourself or having a professional property manager do it for you.
Running a rental property is a business, and handling all aspects of your investment involves more than making sure the property itself is taken care of. You’ll also need to manage advertising of the unit, process applications, collect rent, and meet all applicable laws and requirements in Washington DC.
While managing your own investment property is certainly doable, it’s not for everyone. What are some of the potential pitfalls for DIY property management in Washington DC?
DC Landlord Laws and Regulations Are Constantly Changing
DC rental laws and regulations aren’t merely suggestions for running your property—you’re required to follow them, and not abiding by local laws can expose you to legal liability as a landlord.
For example, your building not only needs to be up to code, but you’ll need to attain a Basic Business License, a Certificate of Occupancy, and additional forms if you have a property that has more than one unit. You’ll also need to keep up with these legal requirements as they’re updated.
There are also potential issues that can arise from the lease. The lease is a contract and is essential to enforcing the terms of your tenants’ stay. You should never use a generic lease which doesn’t take local regulations into account!
Screening Tenants Can Present Challenges
Some DIY property managers in Washington DC make the mistake of renting their unit to people they haven’t done a credit or a background check on.
Not only do you need to have a reputable source to run a credit and background check, but you also need to disclose that you’re going to perform both of these checks on the application and have the potential tenant agree to the terms.
There are also federal fair housing rental laws in place that you must follow when screening tenants. For example, you may not allow pets in your rental, but you can’t ban service animals or reject an application just because the person has a service animal that lives with them.
You should never skip the tenant screening process—it’s going to help protect both you and your investment!
Failing to Accurately Estimate Expenses
Many first-time landlords or inexperienced property managers underestimate exactly how much it costs to keep a successful income property running.
Underestimating maintenance costs can hurt your profit, but so can inaccurately pricing your rental. Not all landlords have experience determining a fair market value for their unit.
Reviewing your profits and losses every month can help prevent unexpected losses. You should also have emergency funds available for unforeseen maintenance costs or for when the unit is vacant.
Other property owners make the mistake of not keeping their rental income separate from their personal finances. Keeping these accounts separate is smart not only for more efficient managing of expenses related to your income property, but also for tax purposes.
Not Regularly Inspecting the Properly
Another problem that DIY property managers run into is not setting aside time to regularly inspect the property, or neglecting to put this information in the lease.
You can’t rely on your renters to notice issues or to inform you that something’s wrong. Small problems can turn into major costs if ignored, especially if it’s a maintenance concern such as a leak.
Remember, you can’t legally enter the residence without advance notice, but you can specify at what points the unit will be inspected on the lease.
Not inspecting your income property regularly can lead to unnecessary expenses in repairs, but could also cause health hazards for your tenants and expose you to liability.
Need Help with Your Income Property in Washington DC?
At FAS Management, we’re experienced property managers in Washington DC and are familiar with many of the pitfalls that can plague first-time property owners. Our professionals are here to help you manage your investment for long-term success. Contact us today for assistance with your rental property in Washington DC at (202) 337-5080!