Proper management is the essence of lucrative investment properties. Without proper management, you will not be able to collect rent, regulate the property’s needs, advertise the unit, adhere to the required laws, qualify certain tenants, keep track of expenses, and, last but definitely not least, generate positive cash-flow. As you can see, the success of your property largely depends on accomplished management.
There are generally two ways to manage investment properties, through property management companies or by yourself. Property management companies perform typical management duties, such as the ones mentioned earlier.
It is not much of a hassle to manage a single property. Managing multiple investment properties, on the other hand, is definitely not a walk in the park. When managed properly, though, having multiple properties is a definite cash cow. If you decide to manage your properties by yourself, to gain valuable experience and to generate profitable income, here are some tips to ensure an uncomplicated investment journey.
Be very organized, be on top of things
You need to keep track of many things for all your investment properties. Know when it’s time to collect rent, sign a lease, pay taxes, and conduct maintenance. These details will be very important for you and can cause troubles when not attended to punctually and properly. For example, in terms of maintenance and repairs, make sure the unit does not have any issues that can commonly arise, such as heating or plumbing problems. As another example, make sure you collect rent and pay taxes on time.
Be sure to reserve time for screening tenants, documenting expenses, and visiting the property for inspection. Always be aware that you are in check with the law, it will dictate may management activities you will perform, such as conducting inspections. Thorough documentation will also come in handy once it’s time to claim expenses on your tax forms.
We are living in the Digital Age, so you might as well choose to keep yourself organized with technology. It will take up less physical space for keeping records and can be easily accessible. As the old saying goes, time is money. Keep yourself very organized and on time to avoid complications.
Determine the properties’ market value and create a marketing plan
To find out how much you can rent each investment property; you need to find out their market values. Generally, you can do this with a real estate market analysis. Mashvisor allows you to perform just that. Many factors, such as the location, size, price, neighborhood of your properties will come into play with the analysis.
Advertising is key to keeping your properties occupied, and thus producing positive cash-flow. Advertise your properties online and in print publications. The more effective the advertising, the more applications you will receive for your property. With numerous applications, you will be able to select desirable tenants. Always highlight any special features and characteristics that your properties have that others do not.
Screen prospective tenants meticulously
Finding a tenant is usually pretty simple, but finding the right tenants can be effortful. It’s important that you know who the potential tenants are, especially in aspects that will affect you as the landlord. Does the tenant have a criminal background history? Is the credit of the tenant good and is their income stable? Will they be living with multiple people in the unit? Do they have pets? These are critical questions that you need the answer to. You can even try to reach out to their former landlords if possible to find out how they acted as tenants.
Tenant screening can be demanding, but it is for your benefit. Remember, finding suitable tenants will reduce headaches and problems you can experience in the long run. This is especially true since you will be managing multiple investment properties. The less issues you have to deal with, the better. Some transitory, painstaking screening will be worth it in the long-term.
Related: 8 Things That Make a Good Tenant
Get help from professionals
Sometimes, there is only so much you can do alone in terms of management. Although hiring professionals will come at a cost, it will definitely lessen the load you have to attain to. Laws can be tricky and complex, especially if you are trying to evict a tenant. Get the help of a lawyer so you can better untangle and understand legal complications.
Keeping track of documentation, especially in regard to expenses, can be time consuming. Consider hiring an accountant to take care of your investment properties’ bookkeeping.
Be prepared for the unexpected
Managing an investment property can bring along problems that will need to be dealt with. Managing multiple investment properties increases this probability.
You may never know when one of your properties will encounter maintenance problems, so be sure to have the contact of some sort of contractor, such as an electrician or plumber, or a general handyman who will be able to come fix the issue as soon as possible. Also be sure to have enough money or adequate financial backing (such as insurance) to cover any unanticipated problems and damages.
All this being said, you do not necessarily have to manage your investment properties on your own. You can always consider consulting a property manager company. They will take care of all the management aspects, such as all the ones mentioned in this blog, for you. This obviously comes for a price, but will take some considerable weight off your shoulders. The choice is always yours, however.
Running a one-man management show for multiple investment properties can be challenging. You will need to be well prepared, organized, and savvy to make sure all things go well. Still, self-management can be very rewarding, both in terms of cash-flow and experience. For all things on investment properties, traditional or Airbnb, be sure to visit Mashvisor.