Managing a rental property seems like a walk in the park, but all the moving parts can quickly fall apart if not done correctly. So, once you have the property, the work is far from done. Whether you are a novice or seasoned landlord, there are numerous aspects to consider, including ensuring the contracts are legally binding, maintaining your books and costs, chasing down late fees, and making sure the property is up to code. Fortunately, there are multiple ways to become a successful landlord, be it being completely hands-off, outsourcing some of it or doing it all on your own. However, starting the management yourself allows you to see all the moving parts needed, and therefore know what to outsource. In this post, we are going to discuss the common rental property management strategies and if it is a good idea to do it on your own.
Strategy 1. Mastering the Basic Processes
It is quite obvious you’ll need to manage tenants in your rental property. Being a successful landlord does not mean sitting back and watching the rent checks flow in. There is a lot of work involved, from finding tenants and vetting them to handling requests, late payments, and evictions.
This is the first step to have your property units occupied. The best way to do this is by casting your net far and wide. Of course, the number of units you need to be occupied and your region’s rental market are big factors. Some of the best ways to find great tenants include:
-Hosting an open house
-Advertising on rental websites and Craiglist
-Using social media to garner attention through word of mouth.
After finding potential candidates, you’ll need to screen them. This means ensuring you understand and comply with fair housing laws. Also, you will need to perform background checks to show the potential tenants’ rental and criminal history. Once you are satisfied, verify their credit by doing a credit check.
Ensuring the Property is Habitable and Safe
As a landlord, it’s your duty to provide a rental property of a particular standard. That being said, here are several considerations to make:
-The property is up to code
-It has safety equipment such as fire extinguishers
-It’s free of rodents, roaches and pests
-Heat, hot water and other basics
When the tenant moves in, you will also need to manage complaints as well as repair requests. In order to streamline the process, consider setting up processes and systems to fix any issues. This can include providing various communication channels, prioritizing repairs, and whether you want to hire professionals or do it on your own.
Strategy 2. Outsourcing
The process of becoming a thriving landlord may feel overwhelming or intimidating for most people, especially if you are a novice. That is why there are options, do everything on your own, outsource all of it, or part of it.
If you decide to manage the property on your own, you get to know exactly what’s going on in your business. However, you will be tied up and might be able to handle issues in a prompt manner. You might find yourself spending too much time in the business that you do not have the time to strategize on how to grow and scale.
On the other hand, you might lack expertise in the legalities and taxes, which might cost you more than you bargained for. Perhaps you overlooked some things in the lease agreement and need to attend to the legal issues that spruce up.
Even though it can cost more to outsource rental property management, doing so frees time and space to spend on other aspects of the investment. This is particularly the case if you have multiple rental properties or do not live close to the residence.
Keep in mind that you do not need to outsource every aspect and can always go back to doing it yourself if things don’t work out.