Top 10 Mistakes New Property Managers Make (and How to Avoid Them)
After 6 months interviewing PMs across the country, the patterns are obvious — and avoidable.
We talked to 50+ independent PMs in our first 6 months. The same mistakes come up over and over. Here are the top 10, in order of how much they cost when ignored.
1. Not screening every applicant
"Their friend vouched for them" is not a screening process. Run credit + criminal + eviction on every adult applicant, every time. $35 spent now beats $5,000 in lost rent and eviction costs later.
2. Accepting partial rent payments
The moment you accept $800 of $2,000 owed, you've reset the eviction clock. If you must accept partial, document in writing that it doesn't waive your right to evict for the balance.
3. No written lease (or a generic Rocket Lawyer one)
Generic leases miss state-specific clauses (CA security deposit limits, NY rent stabilization, FL hurricane prep). Use state-compliant templates or pay an attorney $200 to review.
4. Not documenting unit condition with photos
Move-in inspection with photos = your only defense when a tenant claims "it was already broken." Skip this and you forfeit security deposit deductions every time.
5. Mixing personal and rental finances
Use a separate bank account for rentals from day 1. Mixing makes Schedule E impossible to defend in audit and ruins your debt-to-income ratio when you go for the next loan.
6. Underinsuring
Your homeowner's policy doesn't cover renters. You need a landlord policy + ideally a $1M umbrella (~$300/year). One slip-and-fall lawsuit ends your portfolio without it.
7. Not raising rent annually
Even 3% annually keeps you ahead of inflation and signals professionalism. Tenants who get the same rent for 5 years actually leave more often than tenants on small annual bumps — counter-intuitive but well-documented.
8. Manually paying vendors
Track every plumber, electrician, landscaper invoice in your PM software. Otherwise you'll forget who you owe, double-pay, or worse — pay someone you never hired.
9. Ignoring 1099 requirements
You must issue a 1099-NEC to any vendor you paid $600+ in a calendar year. The penalty for missing one is $290 per form, climbing to $580 if late >30 days.
10. Trying to scale before systematizing
The temptation at 5 properties is to "just do it manually, you'll have time." At 15 properties you're drowning, can't tell who paid what, and start losing rent. Set up automation BEFORE you need it.
The good news: every one of these mistakes is solved by software + discipline. Proprietio handles 1-9 by default. #10 is on you.
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