Managing property can be a daunting task if you have no idea what you are doing. But a few helpful tips can ease the process along the way. Making sure you have done your due diligence can save many hours and lots of money, which can help your budgeting bottom line.
Know your Property
You don’t just need to know how many bedrooms and bathrooms your property has (yes that stuff is important too), but get to know the surrounding area. What are the schools like? Is highway access close by? Are a variety of fabulous restaurants within a 30-minute drive of the property? How far away is the nearest department store and grocery stores? How far away are medical facilities? These are the questions your potential tenants want to know when relocating to a new house. Have these answers ready to go before meeting potential tenants.
Monthly Costs are Important too
They also want to know stuff about the property itself. This is where the bedroom/bathroom numbers come in handy. Are the appliances included with the property as part of the rent? What utilities are included in the monthly cost to the management company (rent) and which utilities will the tenants be responsible for each month? Tenants also want to know what the average costs are each month, so make sure to have some of these numbers ready when screening tenants. If the gas is $400 a month in the winter, be ready to have that hard conversation rather than surprising your new tenants with high utility bills, which might cause them to run out in the night.
Prospective tenants are not only looking at property’s overall location, but what benefits are included each month. Is the unit part of a larger complex with fitness and recreational facilities available and is there an extra cost to use these? Are there limitations to yard decorations or window furnishings? (Some property managers only allow certain colors to be shown outside the properties). Who do they call if there is damage or a repair that needs to be made? You want to make sure that potential tenants have all this information before signing a contract with you for the property.
Keep it Organized
This is a lot of stuff to keep track of, and it can get overwhelming if you are managing more than one property. Imagine having to keep track of all that information but for 10 different properties in 10 different towns. Using some type of landlord software to keep all this stuff organized would be a must at this point. Even if you are only managing a couple of properties, maintaining organization is going to be key if you plan on making money on this venture.
In addition to managing all the properties, you might have some instances where you need to take legal action. Having a personal injury lawyer for accidents on the property would also be a smart move. Making sure your tenants have renters insurance (ask for proof) and that you have property insurance in addition to liability insurance can save you thousands in potential lawsuits for issues associated with the property. Check your local regulations for property management to ensure you have met their rules before renting or leasing to any tenants.
It sounds like a huge task to undertake, but once you get yourself organized and are ready to bring in tenants, it can be a moneymaker to fund your retirement. It just takes a little work on the front end to make sure all your work will pay off in the end.