The success of your investment property largely depends on proper property management. Generally, there are two ways to manage an investment property: through professional property management companies or by yourself. Professional property management companies pretty much do all the work for you, from collecting rent, through regulating the rental property’s needs, qualifying certain tenants, keeping track of rental expenses, to generating positive cash flow.
If you decide to manage your rental properties on your own, you need to have the necessary resources and experience and know which mistakes to avoid to ensure an uncomplicated investment. Here are some tips to help you manage multiple rental properties like a professional realtor.
Create a Marketing Strategy
When investing in multiple rental properties, vacancies are the last thing a real estate investor needs. To keep every rental occupied and cash flowing in, you need qualified tenants to see and apply to rent your properties. This is why it is necessary to have an effective marketing strategy.
Make sure to advertise your available investment properties online and in print publications that ideal tenants use when searching for their next home. The way in which you present your rental property plays a role in receiving more applications, thus, it’s important to make it as appealing as possible. For an effective advertisement, try to highlight special features and characteristics that your rental properties have and others do not.
Real estate investors need to have a system in place to keep their rental properties in good conditions and make sure to always handle repairs and maintenance issues as soon as they are identified. If there is a lot of work to be done, consider hiring a full-time handyman to handle these issues. Moreover, when managing multiple rental properties on your own, you need to have access to other contractors such as a good plumber, an air conditioning company, a painter, an electrician, and a roofer.
Keep in mind that repairs and maintenance can be much more than you projected when you manage multiple rental properties. Every time a tenant is evicted, the real estate investor will be responsible for making the property rentable again. This includes cleaning up and repairing the investment property. This will not only cost money, but it also means that while cleaning and repairing the rental property, the real estate investor won’t be receiving any rental income.
Finding tenants is usually quite simple, but finding the right tenants needs work. It’s important that real estate investors know who potential tenants are. A thorough tenant screening process is the best tool to eliminate undesirable candidates and identify those who fully meet your criteria.
Some critical questions that you need the answer to include: Does the tenant have a criminal background? Is the credit of the tenant good and is his/her income stable? Will he/she be living with multiple people in the unit? Does he/she have pets? If possible, you should even reach out to his/her former landlords to find out how your potential tenants acted as a tenant before. Without going through this process, you could easily end up with wrong tenants who, for example, don’t pay rent on time or damage your investment property.
This process can be challenging, and it might take time, but it is for your benefit – finding suitable tenants will reduce headaches and problems you can experience in the long run, especially since you will managing multiple rental properties. The fewer issues you have to deal with, the better.
Related: 8 Things That Make a Good Tenant
Maintain Good Relationships with Tenants
Some multiple rental properties managers fail to understand that the rented property becomes the home and refuge of tenants. If you, as the manager of the rental property, don’t take this into account and treats tenants as mere files or numbers, then you will be making an already difficult task even more problematic.
You need to be kind and civil. It’s crucial that you do not discriminate between tenants based on race, ethnicity, sex, religion, disability, sexual orientation, age, political viewpoints, and any other violations of Federal Housing Laws.
Nevertheless, do not become overly friendly with tenants and do not let your emotions get in the way of reason. You are the landlord and they are your tenants, and it is very important for that relationship to stay that way. For example, if tenants are late on a payment, charge a late payment fee, so they know that this is not acceptable if they don’t want to be evicted.
Stay Organized and Schedule Visits
When managing multiple rental properties by yourself, there are plenty of tasks to be done such as collecting rents, keeping up with maintenance, conducting inspections, etc. In order to stay on track and on top of things, successful real estate investors must be organized and follow a specific schedule.
This schedule should include payments schemes and actions to be taken as well as when the best time for visits is. Speaking of visits, property management requires a real estate investor to visit and check the properties on regular basis. This shows management presence as well as allowing the landlord to speak directly with tenants to ensure all parties are satisfied. Many multiple rental properties owners fail to see that their presence and listening ear help in addressing problems and resolving issues at a faster rate.
Expect the Unexpected
Managing multiple rental properties can bring along unexpected problems that you will need to deal with. You never know when one of your investment properties will encounter maintenance problems, so be sure to have the contact of a contractor or a general handyman who will be able to come fix the issue as soon as possible. Moreover, be sure to have insurance to cover any unexpected problems and damages.
Get Professional Help
In some cases, there is only so much you can do alone when you manage multiple rental properties. Hiring professionals will come at a cost; however, it will definitely lessen the load of work you have to attain to.
Laws can be complex and you should always make sure that you are in check with the law, especially when evicting tenants. Get the help of a lawyer so you can better understand these legal complications. Additionally, keeping track of documentation, especially expenses, can be time-consuming. Thus, consider hiring an accountant to take care of your multiple rental properties’ bookkeeping.
Having all said, if you’re struggling to manage multiple rental properties on your own, you can always consider hiring a professional property management company to take care of all legal and management aspects. This will be a huge relief if you have multiple properties in different locations, difficult tenants, and older properties in need of lots of repairs, or if you’re managing your investment as a side job. It will take weights off your shoulders but obviously comes with a price.
Managing multiple rental properties can be challenging – you will need to be well prepared, organized, and savvy to make sure everything goes well. You can always hire a professional property management company. Still, self-management can be very rewarding both in terms of cash flow and experience. For all things on multiple rental properties – traditional or Airbnb – and how to become a real estate expert, be sure to visit Mashvisor.