Any rental property owner can tell you that it’s no simple task, which is why owners often seek out assistance from property management companies. But, if you’re wondering how to manage rental property effectively on your own, there are a few things to consider.
In this article, we’ll take a closer look at managing the different aspects of your property and what options you have as an owner in seeking out assistance.
Learning how to manage rental property comes with time and experience, but if you’re short on both, here’s a glance at how to become a pro:
- How to Manage Rental Property
- Managing Residents
- Managing Maintenance and Inspection
- Managing Finances
- Rental Property Management Strategies
- Do-It-Yourself
- Half Do It Yourself/Half Outsource
- Outsource Management
How to Manage Rental Property
To properly understand how to manage a rental property, you need to break it down into three main categories: managing residents, managing maintenance and inspection, and managing finances.
Managing Residents
The first aspect of being an effective property manager is understanding how to manage your residents. As you can imagine, this does require a good amount of people skills. In addition to everyday conversations, you need to be sure to handle any concerns of your residents professionally.
Here are a few pointers on how to effectively manage your residents and their concerns:
- Conduct regularly scheduled property inspections
- Have a good idea of what common problems are with residents
- Understand how you can be proactive about these concerns
- Follow up with your residents once you’ve handled their concerns
- Always act respectfully to your residents
- Respond promptly to any concerns
Managing Maintenance and Inspection
In addition to wanting to provide a safe and habitable housing option for your residents, it is also required by law. Not only are you obligated legally as a rental property owner, but staying on top of your property’s maintenance is in your best interest to find and keep quality residents.
If you are only handling maintenance issues on an emergency basis, you’ll find that your costs will add up quickly. Instead of managing your property this way, it’s better to conduct regularly scheduled property inspections. Not only is it more cost-effective to stay on top of your maintenance, but it will also help to alleviate some of the concerns that come from dealing with more significant problems that are a direct result of not handling them immediately.
Some specific areas around your home that you might keep an eye out for to help minimize your risk of water-related damages may include:
- Replacing supply hoses in your dishwasher
- Switching out drain lines in your washing machine
- Changing out sink faucets in your kitchen
- Swapping water valves in your bathrooms
Managing Finances
Lastly, as a property owner, you’ll need to make sure you properly manage your finances. It’s essential to keep track of what money you have coming in and what money is going out in terms of your rental property.
Here’s a list of some of the finances you’ll need to keep track of with your property every month:
- Rent
- Mortgage
- Fees or fines
- Utilities
- Taxes
- Insurance
Rental Property Management Strategies
Along with understanding the different aspects of managing a property, there are multiple approaches you can take in terms of how you want to manage your rental property. As a property owner, you have the option to do it yourself, half do it yourself/half outsource, or outsource the management completely.
Do-It-Yourself
In the do-it-yourself property management, you as the property owner are responsible for all aspects of owning and operating your rental property. You will take care of everything from listing and leasing your property to routine maintenance and collecting rent payments.
The do-it-yourself management approach is best recommended for property owners with few rental units to manage. For those who have any experience in running their own business or even with managing rentals, this approach might come more naturally.
If you’re interested in having full control of your property, it’s best to stick with the do-it-yourself management style. In these scenarios you can be made aware of problems quickly and manage them as you see fit. Alternatively, it can be a bit overwhelming at times, so it’s important to make sure you are up for the challenge.
Half Do It Yourself/Half Outsource
Some property management companies offer a program known as an Easy Resident Finder. The whole goal of the program is to work with the management company to lease your home while you manage it.
The property management company will rent the house and charge you a one-month leasing fee in these situations. So, for example, if the house rents for $1,000, it’ll cost you $1,000. If it rents for $1500, it’ll cost you $1500.
It’s important to note that managing your property with the help of a property management company may require that you buy into their underwriting criteria. Essentially, you will use the management company’s underwriting criteria to underwrite your resident.
Although this step may seem unnecessary, it’s better for all parties involved. This process ensures that you don’t run into any potential violations of Fair Housing Laws. So, as long as you’re on board with following the company’s underwriting criteria, there are no issues with setting you up with the Easy Resident Finder.
Outsource Management
For anyone looking to have a more hands-off approach to managing their property, outsourcing is the best option. In these scenarios, the property management company will handle everything from making sure your property is leased to handling resident evictions.
Outsourcing management entirely is an excellent option for anyone who owns rental properties far away from where they reside or who owns a large number of properties. Anyone looking to diversify their investments through real estate might also seek the most benefits out of property management companies, which will allow them to focus their time and attention elsewhere while still collecting income from their rental property.
In Closing
Hopefully, you don’t have to wonder how to manage rental property effectively. Instead, you can take what you’ve learned and determine what is the best approach for your financial situation. Remember that there are multiple aspects to managing as well as multiple management styles to consider.
