Investing in rental properties can be one of the most difficult things you do in real estate. It can also be one of the most profitable if executed properly.
Being a landlord is not exactly rocket science. You find a property, make subtle improvements, get good tenants and collect rent checks. Your rent checks should exceed the total monthly payments on the property, leaving with you a surplus. In a perfect world over time your tenants will pay down any loan balance you have, ultimately leaving with you a free and clear asset or maximizing cash flow. However, as you could guess there are plenty of issues along the way. Tenants do not always do their part and your property eventually needs updating. How you deal with these situations will go a long way to determining just how successful, and enjoyable, the property is. Here are five tips to help improve your bottom line and be a better landlord.
Be A Decision Maker..Or Find Someone Who Is: Owning a rental property is in many ways like managing a small business. As we stated, you need to have systems in place to help guide you with many decisions along the way. Some of these decisions aren’t always the easiest to make, or the easiest to deliver. If the rent is not received in time you have to make phone calls or follow through with a penalty. Not every investor is comfortable making these calls, and this is ok. However, instead of avoiding conflict you should find someone who is comfortable with it. There are dedicated property managers who handle every aspect of the property from rent collection to scheduling maintenance requests. For a fee, they will take care of everything and leave you out of it. If your personality isn’t up for confrontation or you simply don’t have the time to commit to the property a property manager may be a solution that solves everything for you.
Better landlords have better tenants who make their lives much easier. In most cases problems with tenants start with the landlord. Use these five tips to help improve your skills as a landlord and build your rental property portfolio.