5 Tips To Help Self Manage Your Rental Property
By Paul Esajian on October 28, 2016
In a perfect world you would never have to worry about your rental property. There would be amble cash flow for you to hire a property manager who would handle every aspect of the property. Your only concern would be when to deposit your rent checks every month. While this scenario is possible it is not always realistic, especially for new landlords. It is more likely that cash flow margins are slim enough that you need to manage the property on your own. This can be a challenge but with the right pieces in place doesn’t have to consume your business. If you opt to manage your rental property here are five tips you need to remember.
- Pay For Protection. Not every rental property warrants or justifies the 10% monthly property manager fee. Some properties are close enough or small enough that you can comfortably manage on your own. With any rental property all it takes is one mistake or oversight to change things for the worse. Where you may not want to pay for a property manager you need to pay for protection. Spending a few extra bucks to make sure the right lease or insurance is in place can save you thousands of dollars down the road. Many new landlords print off the first free lease they find online and simply change the names, numbers and dates. It is only when a property issues comes up that they realize their mistake. Reach out to a local real estate attorney and make sure the lease has the right language and protects you from the unexpected. You should also reach out to your insurance agent and ask if you are covered in the event a weather issue, flood or any other scenario that concerns you. The monthly costs may be slightly higher but you will be glad you paid them if something comes up.
- Open Line Of Communication With Your Tenants. Your work does not end with finding new tenants. Even if you spent days finding the best, most qualified, tenants there are always unexpected issues. You need to be able to communicate with your tenants at all times. If there is a running toilet or a problem with the refrigerator you want to know about it as soon as possible. A running toilet can cost you hundreds of dollars on your next water bill. Tell your tenants that they will not be blamed for every issue that comes up with the property. If they are afraid you are going to keep their security deposit they are not going to tell you when small issues come up. It is the small issues that turn into bigger, most expensive ones over time. In this day and age of technology you need as many methods of communication as possible. Don’t be afraid to ask for an email, cell phone and even work number. The more open the lines of communication are the better chance you will have a good relationship with your tenants.
- Act Quickly. A small problem to you may be a major issue to your tenant. As soon as you are called with a complaint, question, issue or concern you should get on it right away. Something like a broken washing machine can cause your tenant to sour on the property. They will not be as excited to take care of the property or send their rent check in on time every month. On the flip side by taking care of any problems within 24 hours you show your tenant just how much the property means to you. They will be more likely to extend their lease when it expires or recommend someone for the property. Depending on the issue handling it quickly can also save you money. Taking care of a faulty furnace as soon as problems strike can add years of useful life. Acting quickly not only helps with your reputation but it is best for the property.
- Tenant Turnover. One of the most difficult aspects of property management is dealing with tenant turnover. Not only do you need to find new tenants but you need to find the right ones. This starts with giving yourself enough time to go through various tenant applications and perform proper due diligence. You should never let the process beat you down where you rent to the next best available tenant that comes your way. You need to prepare yourself to take several trips to the property and talk to several prospective tenants. You can make your life much easier by putting as much information as possible online. The more photos, videos, dates, figures, rules and expectations you can get out there before a tenant sees the property the easier your job will be. The right tenant will make your job as property manager much easier.
- Stay On Top Of Property. As much as you respect your tenants you also need to stay on top of the property. Not hearing from your tenants for weeks is not necessarily always a good thing. Prior to signing the lease you need to make it clear that you will perform monthly or bimonthly inspections of the property. You are doing so more to protect your investment than to spy on what your tenants are doing. Walk the property to make sure there are no problems with the foundation, basement, windows or any other issues you can see. All it takes is one issue to change the financial picture of the property.
There are many landlords who manage their rental property on their own. If you are considering self-management use these five tips to help make the process as easy as possible.