Being a landlord is not all it?s cracked up to be. Think carefully of all the responsibilities that follow the purchase of an investment property for rental use. Screen your clients, run credit checks and, if you are both landlord and owner of the property, learn to deal with problems objectively, fairly and legally. Many clients will try to talk their way out of serious issues like late rent payments. Some will even present a dramatic sob story ? be sure to stand firm and take care of your property the best way you know how. Any renter can and should be held accountable for rent they have agreed to pay. Tenants can be like children and will give you gray hairs. You may have to start coloring twice a month!
Make Sure You Have Time For DIY
Do-it-yourself (DIY) property management can be difficult if you have a career and a family. The responsibility of the landlord position can be incredibly time consuming. As the owner or manager of the property you will receive all tenant phone calls to report items that need to be fixed or complaints that need to be mentioned. Tenants can be very high maintenance. Be prepared for them to call often and for minor reasons. Also, take the time to complete quarterly checks every three months. Especially if you are a DIY property manager/owner, keeping an eye on the condition of the property is essential to maintaining your investment.
Ask Questions And Read The Fine Print
To find a property manager you must know what questions to ask. Write a list of the reasons you want to hire a property manager and be clear about what you will expect from the person or business that represents you. When you hire a property manager read the property management agreement thoroughly. Many property management agreements renew annually, unless you cancel the agreement sixty days in advance. Most property managers continue their management while tenants they have procured are still living on the property. The management agreement will hold in place until the tenant vacates regardless, of your desire to terminate the current relationship. Always, be fully aware of what kind of commitment you are making in these agreements.
Don?t Let Management Companies Take Advantage Of You
If you decide to work with a property management company educate yourself about possible hidden fees that may be added to take advantage of less knowledgeable property owners. Extra fees like charges for acquiring work or cleaning estimates, procurement fees for finding new tenants and commission fees added to tenant sales are just a few examples of things to look for. Commission charges that are added to tenant sales are negotiable within the property management agreement. These types of concealed charges are typical in agreements created by larger companies that have a property management division. In general, the cost to hire a property management company should be a percentage of the monthly rent.
Tips To make Your Property Management Search More Successful
Always research and read your property management agreement from beginning to end. Don?t sign anything until you feel comfortable. Take all the time you need to make a decision. Research and compare property managers. Ask them about their marketing strategy for the property. Find out how long the manager has been licensed and how many properties they have worked with. Ask for and contact references. The best property managers are found by referral through a trusted friend or business colleague.
Living By Example
As a property manager I try to exemplify the highest qualities in the business. I charge a percentage of the rent for my fee and promise not to add any hidden fees or undisclosed costs. I also require all potential tenants to allow me to do a credit check. I work to create the best situation for everyone involved. Since many rental properties eventually go up for sale, you are always building relationships with tenants who may be potential buyers. It is worth it to be smart, fair and reasonable in your property dealings.
Short note about the author
Elaine VonCannon is a REALTOR with RE/Max Capital in Williamsburg, Virginia, and she specializes in retirement and relocation in the Williamsburg area. She is an Accredited Buyer's Representative as well as a Senior Real Estate Specialist. Elaine VonCannon also works with real estate investors and home sellers.