Renting property can be fraught with many uncertainties. As the landlord, you’ll have to mitigate issues with damaged furniture, interior and exterior walls can be deteriorating, windows wearing out etc. You’ll also have a lot of paperwork to handle, find reliable tenants, and make sure that the rent is collected. Adequate planning can leave these risks at bay.
Property management in San Diego is an ongoing responsibility that requires you to be proactive in order to minimize risks and protect your investment. For this reason it’s best to leave it up to a company with an extensive portfolio, who will take care of your property and details for you. Read on to learn how to handle potential risks before problems arise.
What types of property risk are there?
First, let’s take a closer look at the potential risks you’ll face when renting a property:
- Physical property risk – regardless of your property portfolio, there’s a chance of damage over time that can’t be entirely avoided.
- Tenant risk – there’s nothing more important than filling up vacancies with reliable tenants, and this is why it should be in the focus of anyone involved in the industry
- Administration risk – handling a lot of information, especially when it comes to a number of contracts, different properties, rent rolls, claims and maintenance tasks poses a challenge.
- Market risk. There’s always a chance of an economic downturn, and this can influence the time needed to fill a vacancy, overall upkeep costs, rent collection, etc.
- Legal conflict risk. There could be disputes over property ownership, misleading statements in the contract, or potential tenant discrimination.
What are the ways to avoid risks in managing property?
In case of any risk scenario, you have three possible ways to handle the situation and protect your investment:
- Risk avoidance. This means that you’ll not engage in any potentially risky action. For instance, you could go against adding a second story to a house, as it bears too many risks.
- Risk control, also known as hazard control, involves taking action to mitigate or minimize risks. One way is to conduct in-house check-ups in order to identify and prevent damage.
- Risk transfer. Instead of taking full responsibility, a manager can shift it to another party, be it the tenant or the insurance company.
Experienced professionals combine all three approaches to mitigate against risk and by doing so, maintain and protect the value of your investment.
How do you manage property risk?
Risk management isn’t just about transferring responsibility via insurance. It requires vigilance, control, and proactive action. Practically, there are at least six ways to mitigate risk in managing your investment:
- Emergency planning before anything happens. This involves making plans of action before the issue occurs.
- Budget projections to plan for unexpected repairs or liabilities that arise due to the condition of your investment
- Legal assistance and guidance when needed (for example, eviction notices)
- Liability protection via insurance; Consider purchasing an umbrella policy if you think their coverage needs will increase in the future, for example with renovations, or additions like ADUs or pools.
- Property inspections done regularly by both staff and owners/tenants to identify problems sooner rather than later so that issues do not become more costly and difficult to resolve.
- A proactive relationship with your insurance agent: this involves learning about all the risks involved, what coverage exists for them, and being updated about new types of liabilities. Also, you should keep track of when policies are set to expire so that they can be renewed early enough.
Being prepared is key: if something goes wrong at one of your properties, there’s no need to panic. The more prepared you have been up front, the better off everyone will be during an emergency situation.
Who offers top-grade property management in San Diego, California?
One way to make sure that your investment is in good hands is to hire qualified professionals to take care of it. If you’re based in Mission Bay, or anywhere else in San Diego, you don’t have to look far. Here at Lofty Property Management, landlords can count on us to keep their investment secure and the cash flow steady, and tenants can rely on prompt risk mitigation.
We can carry out a number of services on your behalf, including marketing your vacancy, collecting rent, doing background checks, and connecting you with reliable contractors. Our staff comprises qualified and experienced professionals who have extensive experience and passion for their work.
Call us today to check our services and enjoy the benefits we offer!