Success as a landlorddoesn’t come naturally. It’s a skill which needs to be developed and as youbecome a better manager, the property makes more money and your stress levelsdecline dramatically.
Here are 7 essentials every landlord should know about property asset management:
Treat Property Asset Management Like a Business
Rental real estate management is a business and should not be treated as a pastime. Too many landlords fail to put in the required effort in managing properties. This leads to arguments with tenants, neighbours and their spouses. So commit to treating your investment property as a business.
If you’re a first-time investor or don’t have much time, consider hiring the services of a professional property management services company. They already have the knowledge, systems and online processes required to manage several properties simultaneously.
Present Well-Appointed Properties to Prospective Tenants
Poorly presented properties attract poor quality tenants nasty belongings, which is why maintaining properties in good condition is an important part of property asset management.
Well-maintained properties require fewer repairs and attract a higher quality of tenants who will take better care of the property.
Get Maximum Exposure for Your Property Listing
When renting out your property, use as many media sources as you can to maximise the exposure so you have a large number of inquiries from people interested in renting out properties like yours.
The danger of having only a few people interested in renting out your property would mean you’re compelled to make to make a choice from a smaller pool which decreases the chances of finding your ideal tenant.
Aside from listing on Property websites, such as Domain and Real Estate.com, make the best use of social media platforms like Facebook, Twitter and Pinterest to gain the additional exposure which will help you attract more prospects.
Screen Tenants Carefully
Screening tenants to find the ones who pay the rent on time and look after the property as if it were their own is a key component of rental real estate management.
When screening tenants, look at three general areas:
1. Income – which should be approximately three times the rent
2. Job Stability – Ensure the job isn’t temporary and that they have been in the job for at least six months
3. Rental History – They should have positive reviews from previous landlords and no prior evictions
When it comes to human nature, people don’t really change all that much. How a tenant has been is probably how they’re going to be no matter what they say or how much they try to convince you that they’ve changed.
Awareness of Rental Laws
Be mindful of fair tenancy laws so that in the unlikely event you need to evict a tenant, you can legally do so. If your tenant decides to bring in a dog after moving into your rental apartment or perhaps disturbs neighbours by being noisy in the middle of the night, there is a cause for concern.
However, you cannot discriminate against tenants for reasons such as race, colour, religion or national origin. So don’t inquire how many kids they have or why they’re in a wheelchair or what religion they are as this could be asking for a lawsuit.
Be sure to research your local laws and remember this is a business and business owners are required to know the law and abide by them.
Sign a rock-solid lease agreement with your tenant. Rules are there to keep everybody on the same page and having a rock-solid lease is a fundamental requirement of property asset management.
The lease agreement is a legal document that spells out all the terms of the rental period as well as the rules and regulations that govern the relationship between landlord and tenant. They take a lot of the shooting from the hip decisions out of the picture and give you the manager something powerful to rely on.
When making decisions, a solid lease can protect you and the property legally in case something goes wrong like a tenant wants to move out early, there’s garbage piling up on their deck or anything else.
Different states have different rules, so it’s important to have a state-specific lease, not just something that you pulled off the internet.
Fairness and Firmness
Rental real estate management requires that landlords should be firm but fair with tenants. Ensure that the rules and guidelines which have been put in place have penalties such as late fees when tenants break the rules and don’t bend the rules because you heard a sob story from the tenant. Not only does it hurt you and your finances, it actually hurts the tenant.
Imagine a tenant calls to say his paycheck was late and they would be a week behind on rent. You let it slide and now you have trained them to think that’s acceptable. Two months later it happens again but this time it’s a couple weeks late and later it’s a month late.
Pretty soon the tenant is three months behind rent they’re not answering your calls and you’ve given an eviction notice a tenant costing you money. The tenant, on the other hand, will struggle to find a place to rent because he now has an eviction notice on record. All because you were too soft on him.
Such scenarios play out time and time again with landlords all around the world and always ends badly. Instead be fair but firm. Follow your rules because you are running a business.
The world of property asset management has seen a sea change with new technology-based property management systems which provide a high level of transparency and make it easier for landlords and tenants to manage multiple properties.
As a result of utilising these technologies, tenants can ensure landlords are aware of any repair work or other matters to be attended to by property managers. Landlords no longer have to call a tenant on the phone to get repairs done, but simply compare quotes in the property asset management portal and approve them straight away, so the job can be done.