Despite recent changes in the economy, real estate continues to be investors’ preferred way to earn extra money, according to a survey.
Though complete beginners can own and rent out real estate properties, there are several lessons to learn along the way. For one, managing rental properties isn’t easy.
Still, it’s possible to tackle rental property management yourself with a few tips. If you’re new to managing rentals, read on for three things you must consider.
1. Tending to Repairs
You may have found a great deal on a house, and you’re excited to start renting it out. But it’s crucial to factor in the time and cost required for repairs.
Failing to properly maintain a rental property can lead to fines and even jail time. It’s also one of the quickest way to scare off prospective renters.
Be sure to consider all repairs and renovations before buying or renting out a home. Similarly, be sure to stay on top of repairs and maintenance every year.
Property managers and landlords should plan for:
- yearly or seasonal air conditioner and heater maintenance
- pest control
- weather-related damage
- preventing and eliminating mold
- testing and replacing fire and carbon monoxide alarms
- maintaining the exterior of the home
- professional cleaning after tenants move out
- repainting walls
These steps are essential in managing a rental property. If you aren’t sure if you’ll be able to handle these tasks regularly, you may want to reconsider renting out your home.
2. Planning for Vacancies
When property managers first imagine how much they’ll be able to earn from their rental, they may assume that they’ll have tenants 12 months out of the year. However, it’s unlikely that the home will be constantly occupied, especially after a tenant moves out or if they need to be evicted.
Plan for vacancies by researching the average vacancy rate in your area. Expect that there will be some time, sometimes even a few months at a time, when your rental is unoccupied.
Then, create a strategy to limit this time as much as possible. For example, you could offer incentives to tenants who renew their leases. Or you could focus on advertising and crafting flawless listings, like these DC rentals, to find new tenants as soon as possible.
3. Tracking Your Finances
As a rental property manager, you must stay on top of your finances. This is helpful both during tax season and when collecting rent.
Some landlords keep it simple, accepting checks in the mail from tenants and marking their finances in a book. But using digital solutions, such as accepting digital payments and using bookkeeping software, is an effective way to stay on top of your cashflow.
You can also hire a professional rental property management company to handle all your finances for you.
No matter which option you choose, you must be organized when it comes to tracking your money. Just one minor mistake on your taxes could cost you hundreds or even thousands of dollars.
Tips for Managing Rental Properties
Owning and managing rental properties can be a lucrative way to invest in real estate. But there are a few key things you should consider.
Use the information discussed here to plan for your own investment property.
For more ways to earn money, check out our other business articles!
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