If you own properties that you rent out, either as a full-time or part-time income source, then you know that the amount of time required to manage each property can come as a surprise. It is common for newer owners and investors to become involved in the world of property ownership in pursuit of passive income, only to find themselves feeling a little overwhelmed after the first few issues arise.
Especially if you have other life or professional commitments, finding the time to deal with every aspect of the property can feel like a chore, right? Fortunately, there are several ways you can help alleviate the burden you feel. Where do you start?
Build A List Of Contacts
The first thing every property owner needs is to have people they can call upon when they need help. If your property encounters a problem, such as a broken boiler or a damaged roof, do you know a qualified local trade expert you can call to prevent disaster? It makes sense to invest some time in finding the best professional support available on the market.
Build relationships with these companies. Not only can long-term partnerships help you move up the priority ladder in terms of having problems addressed, but they can also yield better deals in the future. Build a list of contacts, and you’ll no longer experience that sense of panic when those overnight calls come from tenants.
Consider Your Tenant Type Carefully
Another challenge arises from the type of tenant you choose for your property. If you fail to conduct thorough due diligence during the vetting process, your next tenant may become a constant source of tasks and cause you more complications than you want to deal with. If your property is attached to others, too, consider the potential liability that your tenant could present to you and those around them. As such, set your “type” very carefully.
Renting in an area with high student populations can sometimes present a higher risk of property damage, if those student tenants are inclined to a festive lifestyle. They may also have a lack of financial security due to a lack of stable income or credit worthiness. In these cases, it’s advantageous to mandate that parents cosign the lease.
Another example of a potential tenant issue is pets. Pets are very common and banning them from your property may limit your pool of prospective tenants. You may also find that tenants bring pets in without disclosing it to you, so it’s typically best to make your property as pet-friendly as possible, to encourage transparency and present a fair pet fee that will help protect the property from any pet-related damages that may arise.
It’s important to understand the type of tenant you want to market to, and how well your property fits their expectations. Marketing, staging, and property aesthetics can be a great way to match your tenant goals with the tenant pool in your target market.
Get Legal Advice ASAP
Many landlords move people in with minimal contractual planning and then run into problems when tenants damage the property, miss rent payments, or breach the lease. Without clear, firm guidelines on issues such as who is responsible for maintenance and the consequences of breaking the terms of the lease, you run the risk of having more problems than you have the time, resources, or expertise to deal with.
Always get a lease template and broader legal advice from a trusted property lawyer in your area. They can help you draw up contracts and also provide valuable insights into state and area-specific regulations that you need to abide by. At the same time, a professional can provide you with valuable advice on the type of insurance and protection you need so you can sleep easily knowing your investment portfolio is well protected.
There are many hidden challenges within property ownership that many owners are not aware of until it is too late. With solid, accessible legal advice, though, you can get ahead of the curve and avoid numerous of potential future problems.
Hire A Property Manager
Of course, there is always the option to outsource every part of the property management process. By hiring a property management company, trusted property experts can take over the management of your property and allow you to focus on everything else you care about. While you pay a fee – often ranging from 4 to 12% of the monthly rent – this does limit you from having to deal with issues such as finding a tenant, arranging property contracts, collecting rent, and handling repairs and maintenance check-ups, among others.
There is a reason why the property management industry employs around 910,000 people. By using a trusted third-party service to manage your properties, you are achieving real passive income and maximizing time you can spend on your career, with your family, or expanding your investment portfolio. Instead of being a landlord, you are providing yourself with the peace of mind necessary to ensure your assets reach their full potential in the future. By hiring a property management company you can trust, one with years of experience in the field, you can ensure less stress on your shoulders because you know things are being handled correctly, the first time, without needing your precious time and attention.
With the above in mind, you should feel a little more confident about maximizing the value of your property portfolio. What options will you invest in?
