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.
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.
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. 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.
You need to keep track of many things for all your investment properties. Know when it’s time to:
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 many 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.
As the old saying goes, time is money. Keep yourself very organized and on time to avoid complications.
Keep up with the Maintenance
This is important for a simple reason, if your property is maintained, you will not have a hard time finding and keeping tenants. No one wants a leaking roof or even a leaking tap when they move into a house.
Avoid Tenant Turnover
The next important way to successfully manage your rental property is to keep your tenants happy by simple things, such as quickly responding to repair requests and making an effort to place other good tenants in the property. One of the main reasons tenants move is because they are not happy with their neighbours. Having strict tenant screening procedures in place will help you weed out the good from the bad.
To find out how much you can rent each of your property, you need to find out their market values. Generally, you can do this with a real estate market analysis. ANP Holding allows you to perform just that. Many factors, such as the location, size, price, neighbourhood of your properties come into play with the analysis.Advertising is key to keeping your properties occupied, and thus producing positive cash-flow. Always highlight any special features and characteristics that your properties have that others do not.
Finding a tenant is usually pretty simple, but finding the right tenants can be effortful. Tenant screening can be demanding, but it is for your benefit. 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.
Finally, to make money as a property investor, you need to make sure you are properly managing your financial obligations. One large obligation every investor has is to pay their taxes. Paying taxes as a rental property owner can be confusing. Since it is a business, you can often deduct home office expenses and since it is property, there are many deductions involving depreciation that you are allowed to take.
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. 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.It is often in your best interest to hire an accountant who is skilled in investment property tax law. He or she can help you to understand the deductions you are allowed to take, as well as the deductions that could raise a red flag with the IRS.
Managing a rental property can be overwhelming and time-consuming. Hiring a professional real estate consultancy or a property manager is the right way to solve this problem for some property investors.
Hiring a property manager is a big decision and it is not cheap. You need to weigh the financial pros and cons to determine if it might be the right choice for you. Keep in mind that there are many bad property managers out there who can completely destroy your rental property, so you need to screen property managers very thoroughly, just as you would prospective tenants.
Managing an investment property can bring along problems that will need to be dealt with. Managing multiple investment properties increases this probability.
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 our own. You can always consider consulting a professionals. 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.