By Nat Kunes
Nat Kunes is the Vice President of Product for AppFolio. He works on a daily basis with property management professionals to identify industry trends and product features that are included in AppFolio's property management software. AppFolio is an IREM President Level Industry Partner. This article is published as part of that partnership.
As a property manager, how much of an emphasis do you place on managing risk? If you're not taking it seriously, now is a good time to start. Any sort of lapse in judgment when it comes to everything from your tenants to how you prepare for emergencies doesn't just have the potential to put a dent in your business -- but to end it once and for all.
Automate Your Screening Process
If you're serious about risk mitigation, the first thing you should do is automate the tenant screening process. Why? Not only does it streamline the entire move-in process, but it also takes bias and emotion out of decision-making. This also removes the possibility of discrimination that may occur, keeping you in compliance with the rules and regulations concerning fair housing. Making decisions based on emotion is where things can really get sticky.
A common example: You receive an application from a prospective tenant who doesn’t qualify to reside on your property for one reason or another. Through the power of persuasion, he talks you into giving him the keys anyway. You let emotions guide your decision, and that’s where you have the potential to get burned.
An automated tenant screening program doesn't just give you the information you need to make a decision on a prospective tenant in a fast, efficient manner, but it takes emotion out of the decision so you can do what's best for your business.
Be Ready For Anything
It's not uncommon for many property managers to be reactive — rather than proactive — when it comes to emergencies or natural disasters. Your insurance plan should include coverage for any potential disaster, and we recommend having all of your important data stored (or backed up) in the cloud. This way if the unthinkable were to happen, not all would be lost.
It’s critical to keep all of your data in one secure place. Not only does this save money and time since you won't have to toggle back and forth between different programs, but keeping it stored in the cloud is crucial should your servers or hardware ever become damaged or stolen. It could be the difference between starting from scratch or picking right back up from where you left off.
Encourage Renter’s Insurance
No matter where your properties are located, unpredictable things can happen. That's why we suggest that your tenants have some sort of renter's insurance policy. Renters insurance is an important yet often overlooked type of insurance made specifically to cover a renter’s personal belongings. It offers protection and replacement of a renter’s valuables in the event that they are damaged or stolen, and it’s highly recommended that renters consider this type of insurance and have a policy in place well before it’s needed. This protects you, your owners, and your renters in the event that something unexpected happens.
Being proactive when it comes to managing risk is key to a business being able to pick up the pieces and move on if the unplanned were to occur.