How to Fail Managing Your Property

A typical amateur investor's next move right after getting his newly acquired and fixed property is to find a renter right away. There is nothing wrong with that except if he neglected to know the important aspects of effective property management, he's destined to fail.

Here are some of the "Amateur Investors Syndrome" that you have to watch out and avoid failing as a property manager.

1. Buying "fixer uppers" - there are plenty of money to make in buying fixer uppers but make sure that you have lots of cash on hand to fix all the flaws in these homes. You have probably depleted a hefty amount of cash due to the repair by the time you have completed all the necessary repairs to get that property back in the market. Renting this property means that it will take some time to recoup the cost you spent in that fixer upper.

2. Buying bargain homes with big problems - as real estate investor, solving people's problem is one of your title. But it doesn't mean that you are the one who's going to be stuck with these problems. If you're buying bargain homes be ready for surprises because unknown problems could either "make" or "break" you. Do your homework first if there's really a quick way to profit from these types of homes.

3. Renting to "warm bodies" because the mortgage payment is due - this one is like playing the "Russian Roulette". Would you trust anyone to live into one of your most valuable asset for the sake of you making the mortgage payment? How can you be so sure that this stranger will pay the rent on time?

4. Accepting less than a full month's rent and security deposit - if you failed to collect these two payments right even before the tenant occupies your place, you are heading for rent collection headache. You will find out that people's promises are only good in words most of the time.

5. Financing for negative cash flow - this is real estate investing in reverse order - to lose money! What's the sense of getting involve with real estate if you're in negative cash flow?

6. Letting your tenant run you - don't forget that once you decided to manage your property and have tenants that you're the so-called "manager".

7. Renting to "job hoppers" - this means that rent payment will be coming whenever he gets paid. And get used to the lame excuse of "next month's rent will be full" as soon as they get a job.

8. Afraid to run a credit check because it might be bad - you think it's bad to run a credit check? Maybe it's not bad to let a habitual delinquent tenant live into your most precious asset.

9. Renting to people with no credit history - another roll of dice on you as a property manager of allowing complete "nobody" to live your property that's worth in the hundred thousands.

10. Negotiating rent - do you ever negotiate to the reception desk of any hotels before they even let you occupy their room just for the night?

11. Exchanging rent for services - the reality is this, you have monthly mortgage payment due to your bank regardless of your life's situation. The rent you received monthly is supposed to make up your mortgage payment. Other non-monetary payment made to you is nothing

12. Not enforcing lease terms - you are going to be at the mercy of your tenants promises and excuses if you fail to enforce your lease terms "in paper".

13. Delaying the legal process because of tenant promises - you will find out the "hard way" the more you delay dealing with your tenants when it's time to evict them that it's going to be longer stress for you renting to these deadbeats. It's going to be a terrible situation for you since you're leasing your property for free.

14. Buying tenant's stories - just what's mentioned before that their stories and promises only sounds good at first and even believable the first time. And every deadbeat tenants will have the most encouraging stories for you just to occupy your place.

15. Not inspecting the property - have you ever tried guessing what's inside Pandora's box after your tenant moved out without notice?

16. Underpricing or overpricing the rent - you rent too low, you will never run out of tenants but you're shortchanging yourself profit wise. You charged too much, you will have an extended vacancy and still you have to pay the mortgage.