Before getting into the Dallas property management business, you may get a lot of advice from previous landlords telling you not to worry about this or that aspect of managing a rental home. There are a lot of myths circulating out there that say self-managing a rental property is easy, and in a do-it-yourself era, this is something that you alone can handle. As one of the most experienced Dallas real estate management companies, we at Specialized Property Management Dallas know that trying to do everything yourself is almost always a recipe for disaster. We’ve known too many DIY landlords who come to us after years of struggle, tired of the headaches and the hassle. At Specialized, we want to help you sort out the myths vs. facts and understand the realities of managing a rental property.
Myth #1: Leasing a Rental Property is Simple
You may think that if you can quickly sell an old bike or a baby stroller on websites like Craig’s List or Facebook Marketplace, it should be the same with a rental property. After all, you can buy a “For Rent” sign from your local store, stick in it in the yard, and list it on these websites for free. Why pay a property management company to do it?
Fact: The leasing process is not simple, especially if you’ve never done it before.
Most DIY landlords don’t have the expertise to price their property at the right market value. That means a home that should be renting for $1500 a month won’t get a second glance from prospective tenants if the rental rate is $1750. And even if the rental price is right, the average number of days a home stays vacant is almost 52 days! If your home is not rent-ready it can stay empty for even a longer period of time. You are losing money if your home is vacant for even just one month. In fact, the cost of a vacancy is the single highest expense for owners. When you do have prospective tenants ask to view your home, you are in charge of physically meeting them there, showing them the home, and answering any questions they might have. This can be extremely time-consuming and frustrating when the people who seemed so interested at the showing never commit to the home.
Where We Come In
At Specialized Property Management Dallas, we lease most of our homes within the first 30-days on the market! Like other Dallas real estate management companies, we ask that you pay a small fee that includes a full property assessment, marketing the home on over 90+ sites including MLS, all showings, screening of each applicant, signing the lease contract with the tenant, and the collection of funds. We take care of the ins and outs of leasing your home so that you don’t have to do it.
Myth #2: All property management companies offer the same services, so it’s best to go with the cheapest price to save money.
You might think that all professional Dallas property managers are created equal, but if you really and truly do your research, you’ll learn that this just simply isn’t the case.
Fact: If you go with the cheapest company, you can expect to “get what you pay for”.
Most Dallas real estate management companies expect their employees to multi-task and
perform all required property management tasks, such as marketing, leasing, maintenance, evictions, accounting, inspections, and legal compliance. While you might luck out and find a property manager that knows everything about all these areas, you may also get someone who is inexperienced and learning as they go. Either way, they will not be able to keep up with the best practices in all functions, and you may end up losing valuable time and money.
Where We Come In
At Specialized Property Management, we have a team of specialists dedicated to each and every aspect of the rental property management business. Our employees are extensively trained and know the ins and outs of each specific area in which they’re assigned. That includes: marketing, leasing, property management, maintenance, collections, evictions, accounting, inspection services, monthly audits of your trust account, or legal compliance oversight by an individual who specializes in real estate law.
Myth #3: Finding a tenant that will take care of my home and pay on time is easy
Sorting through prospective tenants may seem relatively straightforward. You may also think that if one tenant doesn’t work out, you can just put the home back on the market and find a different tenant that will be better.
Fact: Dallas real estate management companies know that placing the wrong tenant will cost you 4-6 times the monthly rent rate
If you don’t have an effective tenant screening method, you can end up with a tenant who never pays on time and costs you thousands of lost dollars. With today’s technology, it is easier than ever for tenants to falsify documents or appear more credit-worthy than they are— potential pitfalls for those who do are not well-versed in identifying these issues.
For example, let’s say your home rental rate is $1,000 per month. If a tenant fails to pay for one month, you’re losing about $1,500. Then, if you decide to evict the tenant for failing to pay, you’re looking at eviction court fees of around $500, depending on if you have to hire an attorney and/or have to file a writ of possession. Some tenants don’t move out right away, and it may take an additional 21-28 days to evict them, costing you another $750. Then if your tenant causes any damage to your home, you can expect to shell out another $1,750 to pay for that. If you get lucky and you are able to re-market your home within 45 days, you’re still going to have to cover rent for a while, at about $2,250. That means the total cost to you is $6,750!!
Where We Come In
At Specialized Property Management Dallas, we are experts at placing reliable tenants. Our tenant screening methods are proven to help you find a responsible tenant who pays on time and takes care of your home. Unlike other Dallas real estate management companies, less than 1% of our placements result in an eviction, and we have the legal support staff to help you in case an eviction is necessary.
Myth #4: My home is in good shape and I can expect to receive a high enough rent to cover my costs.
Fact: Even if your home is updated and considered one of the nicest in the neighborhood, that doesn’t mean you can charge more than others for rent.
Most Rental Property is cash flow neutral due to the supply of vacant homes exceeding the demand. This means some owners have to reduce the monthly rent rate to be competitive. The real estate market is indifferent to an Owner’s expenses and “PITI” (Principal, Interest, Taxes, Insurance). In many cases, owners of rental property must come out of pocket to cover the disparity between their PITI and rental amount. *The positive is that Owners can use rental property as a tax strategy and/or realize significant returns as the home appreciates in future years, and property management fees may be tax-deductible expenses per the IRS.
Where We Come In
The team members at Specialized have local expertise to help you set the appropriate rental rate and counsel you about ways to profit from your investment, even if you have to set the monthly rent lower than you would like to.
Myth #5: I can handle tenant maintenance requests by myself or call someone else to fix it.
Fact: Unless you are a certified electrician, plumber, etc you shouldn’t take the legal risk.
There are certain Property Code, local city ordinances, and Federal Landlord Laws that you have to follow when it comes to maintenance repairs. These laws state what must be fixed by the landlord, the process of the communication by the Landlord and Tenant, and even specify what type of technician must complete the repair. Don’t end up in court over a maintenance issue that you tried to handle yourself, but couldn’t. Also, if you don’t hire maintenance staff that has the proper licensing and insurance, and the worker does not follow code or gets hurt on the job, the landlord is usually liable for those costs.
Where We Come In
At Specialized Property Management Dallas, we have a 24/7 maintenance hotline where tenants can call in, request a repair, and get assistance as soon as possible from a licensed professional without you ever having to leave your couch. We hire only the best, most experienced maintenance staff who specialize in specific repairs so you don’t have to stress about ending up in court.
Myth #6: I don’t have to worry about legal compliance, because I have an attorney friend I can ask for help.
Fact: You probably don’t have the time or the expertise to know all the legal ins and outs of managing a rental property, and your friend may not either.
Dallas property managers have to be well-versed in many different areas of the law in order to stay in compliance, and sometimes these can change frequently. Managing rentals requires a landlord to be an expert in the following areas:
- Property Code Laws & City Ordinances
- Federal Housing Laws
- Marketing Homes for Lease
- Real Estate Contract Law on Residential Leases per your State’s Real Estate Commission
- Trust & Escrow Laws on Security Deposits and Monthly Rental Payments
- Tenant & Landlord Maintenance Laws
- Managing Renter Demands
- Accounting for Tax Purposes
- Collection Laws
- Eviction Laws
- Tenant Security Deposit Refunds
- Property Inspection Regulations
- Tenant Screening
Where We Come In
Dallas real estate management companies should have a legal team dedicated to knowing all the specific rules and regulations that go along with property management to keep you in compliance. At Specialized Property Management Dallas, we do! We help you avoid legal risk and costly court fees by staying abreast of all the local, state, and federal laws for your area.
PUT OUR TEAM, EXPERIENCE, AND ETHICS TO WORK FOR YOU!