Rental Property Owner? Do These 5 Things.
Whether you already own rental property or are thinking about buying an income property, there are several key steps you will need to take to be successful. Here are 5 of the most important things to focus on according to the real estate investment experts in the PropertyLark network:
1. Create a Business Plan
It doesn’t matter if you just own one rental property on the side or you are investing in real estate as you primary source of income. It will benefit you to have a business plan. You can establish budgets, legal business structures, bookkeeping systems, tax plans and other critical issues that will help you be more successful as a real estate investor. These days, a key part of your investment plan may be deciding if you want to use the property as a short-term vacation rental or seek long-term tenant leases. There are pros and cons to both approaches.
2. Set the Ideal Rent Price
This is a very important step. You want to make as much money as possible each month. However, you also want to have quality tenants who will stay for a long time. Setting the ideal rent price can be tricky. Study the local rental market and understand your target tenant pool. Find a rent price that is appropriate for the market and will attract the types of tenants you want, but not so expensive that you will have trouble filling the unit. After all, extended vacancy periods are bad for business!
3. Determine Your Property Management Plan
You will need to decide if you are going to manage the property yourself and act as the landlord, or if you will hire a property management company or caretaker to oversee the day-to-day tenant and maintenance issues. Hiring someone will cost you money, but it could be worth it in the long run. A good property management company can help you with rent pricing, marketing, tenant retention and other key tasks. It might be a good idea to hire a property manager if you don’t have much experience or time to deal with the everyday items. If you are confident in being the landlord yourself, you will need to invest the time to do it right and the result could be more money in your pocket.
4. Take Care of Your Tenants
When you take good care of your tenants and keep them happy (within reason), it will likely benefit you over time. You can keep quality tenants in your rental unit for longer and build up a good reputation that will enable you to minimize any vacancy periods in between renters.
5. Draw Lines
There is a difference between being a good landlord who takes care of their tenants and trying to be too much of a “friend” to them. You have to establish some lines in the sand to maintain a proper landlord/tenant relationship. Don’t let them take advantage of you because you are too nice. Be clear about any rules upfront and be prepared to enforce them as necessary. If you are too soft, they may be late on rent payments, do damage to the property or exploit your kindness in other ways. It’s okay to be friendly with them, but you have to draw lines and put your foot down when push comes to shove.
These are just a few key things you should be doing if you want to be a successful rental property owner. Another good idea is to join the PropertyLark home buying network. We can help you with great resources that will enable you to find the best rental properties and investment management tools.