So you want to own rental properties? You want to manage properties for passive income for now and into the future? So you want to be a landlord but do you have what it takes to be a landlord. Here is an outline of the characteristics that you will need or develop if you want to succeed in property management.
Be a Good Manager
In order for you to be a good landlord who can profitably manage your rental property you need to know how to be a good manager. Being a good manager equals profits and wealth, being a mediocre manager makes you another failed property investor. To be a successful manager not only do you need to ensure that your tenants pay their rent on time, but you also need to treat them with respect and be open to their complaints and issues so that they will become long term profitable tenants. While finding tenants is easy, finding good tenants is profitable but time consuming and once you find the perfect tenant it is your attitude that will decide if they become profitable tenants for you or a landlord down the road.
Understanding Good Management
The first step to becoming a good manager is understanding what is a good manager. Most new landlords begin as bad managers and their properties and their profits suffer the consequences. When you have long-term tenants (over a year of constant occupancy) who treat the house as if it were their own you know you have developed the skills of a good manager and landlord.
We’ve all heard the stories of bad landlords who constantly mistreat their tenants and of tenants who refuse to pay the rent and trash the property with all night parties, but the truth is most of the time this involves bad tenants living in a home managed by a bad landlord. When there is no trust or respect between both parties mayhem is often the result. It is always good to remember that your property is also your tenant’s home. The sad fact is that some landlords seem to have bad tenant after bad tenant and continually put the blame on the tenant not realising that in part the blame fits squarely on the landlord’s management style.
As the saying goes experience is a great teacher and over you’re your ability to successfully and respectfully manage your properties will increase along with your profits and length of occupancy. Just remember your not the first person to invest in properties so use the knowledge and experience of those in the know to educate yourself and prevent the pitfalls that await the inexperienced manager.
What should be done?
The key to a successful property comes down to one thing, occupancy rate. And occupancy rate is ultimately decided not by the property or its location but by the manager. Long term tenants are happy and satisfied tenants who not only feel comfortable about calling the property home but also comfortable with the management of the property. Some things you can do to help make your tenants happy are:
- The ability to separate your own personal tastes and styles from the practical aspects of managing rental properties.
- Ensure that the furnishings and appliances are in good order and are safe to use. Replace or repair faulty items immediately.
- Ensure that your property is easy to maintain, focusing on practical over style. While furnishing your windows with beautiful drapes will make it more appealing visually, most tenants will see them as too much work. The better option is to install vertical blinds because they are much easier to clean, more durable and cheaper to clean.
Managing Your Time
Starting out in property management very few people have enough financial security to take it on full time, most of us still need to work our regular jobs. This means that the day to day managing of your property—responding to tenants queries, showing people the property, collecting rent and regular maintenance—is done early evening after work or on the weekends. Effective time management is vitally important both to keep your tenants happy but also to ensure all your free time doesn’t suddenly become consumed by the property, remember the property is meant to improve the quality of life for you and your family not take it away.
Time management is not just learning to use your time effectively it will also require that you know what you can do and what you cant do. There is little to be gained if you spend an entire weekend trying to fix a problem with the properties hot water system is at the end of that weekend the problem still exists. When a problem arises in your property you should first decide is it within your capabilities to fix it, if so allocate the time need to research the problem and fix it. If it is outside of your capabilities call a contractor. Why waste your entire weekend looking for the cause of a problem when a qualified contractor will find the root of the problem within an hour. Remember happy tenants are tenants who don’t spend a weekend watching their landlord stare at a hot water system scratching his head.
Becoming a great landlord takes a lifetime of failures but quickly becoming a good one requires common sense and a keen ear. Good management starts with purchasing the property and doesn’t end until you sell the property, and in that time making your property into someone’s home is the first priority. Within you is a great landlord, he just needs to be educated.