Most landlords think that managing their own properties will save them money; but if you don’t have systems in place, it can end up being costly in the long run. Owning properties is a business so treat it like one – if you aren’t good at doing the day-to-day, hire someone who is. Your time is valuable so it is best to spend on activities with the greatest ROI, like making more money to grow your portfolio!
Here are 5 must haves whether you hire a professional manager or you decide to take the DIY route.
- Higher quality tenants: Bad tenants can be a cashflow killer, especially in tenant friendly states like California. Eviction costs, turnover costs and rent loss quickly add up. It is critical to properly screen your tenants – run credit, run a background check and check with current and previous landlords.
- Make paying rent easy: Utilize technology! There are several companies that allow residents to pay online. The easier you make it for your residents to pay rent, the easier it will be to collect. Shy away from “working with” late payers, that is a slippery slope!
- Budget-conscious maintenance: Landscaping, painting, plumbing, and other maintenance costs add up. Getting cost effective maintenance is key to maintaining and maximizing cashflow. Find great vendors and pay them quickly – the best vendors have lots of business so paying quickly will help you stay top of mind and help get repairs done quickly. Remember, this isn’t your home, find vendors with “rental friendly” pricing.
- Lease units quickly: Try to pre-lease your units, every day your property sits vacant is a day you aren’t collecting income. Utilize self-guided showings and have verbiage in your lease that residents will cooperate with showing their unit after they have given notice to vacate.
- Do regular rent increases: Stay on top of rent increases, this keeps you from getting too far below market, increases are smaller and less shocking for your residents. We typically keep our rents slightly below market to make moving less attractive. Also, if you are renewing leases, stagger the expiration dates and make sure they don’t end during slow leasing season – usually October through January.