Looking to get into Boston Property Management on your own? Make sure to avoid these costly mistakes.
Boston property management is a competitive business that attracts investors looking to make a quick buck in a budding market. But the reality is that owning and self-managing rental properties in Boston isn’t nearly as glamorous as it may sound. Between tenant issues, scams, and urgent maintenance problems, a lot of people quickly find they’ve bitten off more than they can chew.
But in the same vein, there’s a reason Boston property management has the reputation it does. With the right attitude and the right knowledge, it is certainly possible to make a lucrative business out of owning and self-managing properties in the Greater Boston Area.
We’ve seen a lot of people succeed and a lot more fail. If you’re thinking about self-managing a rental property in Boston, here are a few mistakes to avoid.
Mistake #1: Not getting the right repair services
There are a lot of home repair services in the Greater Boston Area, but as a property owner, you need to be extremely selective. Obviously, you’ll want to find a reliable company that does good work and can handle quick turnaround times. (Trust us, you will have tenants calling you day and night asking when their sink will be fixed.)
What might not be so obvious is that, as a self-manager, you could be missing out on the discounts that every other property management company is getting. When a property management company establishes a relationship with a repair company, they get a heavily discounted rate. As a self-manager, you’ll want to do your best to get those discounts.
That might mean forming your own LLC or just having a candid conversation with the service to let them know you’re serious about property management and you’ll be bringing them more business in the future. You could also lie to them about how many properties you have, although we’d strongly advise against it.
Mistake #2: Not knowing Massachusetts tenant-landlord laws
We’re not going to beat around the bush here—Massachusetts is one of the most difficult states for landlords to operate in. In order to avoid wasting your time and money on lawsuits and scams, you’ll need to get clear on a lot of state-specific laws.
Without going too in-depth (that’s for another post), let’s cover a few basics. First and foremost, there are strict anti-discrimination laws that will determine what questions you can and can’t ask on an application and restrict you from discriminating against many types of prospective tenants. People with good intentions will often screw up here, and just one small mistake could mean a costly lawsuit.
Additionally, you’ll need to comply with laws surrounding when tenants must receive their security deposits, how much the security deposit can be, and when you can begin the eviction process. There are still more laws when it comes to how you construct your lease, how you evict a tenant, and what information you must disclose to your tenants.
We’ve just scratched the surface here, but know that you’ll need to do plenty of research and, most likely, hire a lawyer before you even think about self-managing a property in Boston. If you have questions about this, feel free to drop us a line.
Mistake #3: Being too nice to your tenants!
You’re a nice person, right? Well, being a nice landlord could be your downfall. Unfortunately, there are a lot of ways tenants will try to get out of paying rent or avoid paying for damage they’ve done. We guarantee you’ll get plenty of sob stories, illegal tactics, and even a fake lawsuit or two.
In order to avoid being taken advantage of, you need to be strict and direct with your tenants. Your livelihood depends on it.
Mistake #4: Missing crucial times of the year
Timing is crucial for property owners and managers in Boston. When it comes to putting your property on the market for rent, starting a lease and sending renewals, you need to be on your game and make sure you’re doing everything at the exact right time. If not, you might take a financial hit or, even worse, you could face legal troubles.
Property management companies are well-versed in these dates—because they deal with this stuff day in and day out—and can make sure their property owners are complying with the law and getting the most out of their rental property. When self-managing, you’ll want to do your research or get in touch with someone in the industry to make sure you’re doing things right.
Mistake #5: Inconsistent procedures and protocols
Property management companies might get a bad rap for having too much red tape and formal processes, but there’s a reason why they’re set up that way. When managing a property, you need to be sure to follow a standard set of procedures and protocols with all tenants. This becomes even more important when you’re dealing with multiple properties.
If you simply try to handle everything on a case-by-case basis, you’ll quickly run into troubles. When legal issues arise, you need to be able to clearly explain—and prove without a doubt—what happened and how you dealt with it. Creating standard procedures and protocols means you’ll be able to handle every situation the same way and you’ll have a clear paper trail of everything that happened.
Ultimately, self-managing properties in the Greater Boston Area can often be more headache than it’s worth. For only a small fee (we charge a flat 5%) you can take all of these problems (and more) off your plate. If you want to see what we can help you with, submit a proposal! We love chatting about this stuff.