3 Steps to Manage Your Rental Property
As we’ve already discussed in previous blogposts, owning a rental property can be an excellent source of passive income; however, it can also take up a significant chunk of your time if not managed properly. Especially if renting property isn’t your primary or sole business.
You could always hire a property manager. Depending on where your property is, they usually charge roughly 10% of the rent and can be an excellent solution to minimize the stress. However, if you prefer to handle everything on your own, you’ll need to follow these rules that can help you manage your property profitably.
Step #1 – Create a mind-blowing listing
Creative online listings are a game-changer for the real estate market. The first thing you need to keep in mind is the screen appeal of the property. You can find more information about how to have a successful screen appeal in our previous blog post.
Screen appeal aside, you need to focus on the description. There is a bit of a debate happening regarding what needs to be included in the description. Some property managers argue that if you add all the information online, the potential renters will make their minds up without giving you an opportunity to prove why your property is a good choice. Others will argue that you will eliminate excessive phone calls inquiring about these things by adding detailed explanations of the property and neighborhood. Neither is wrong. How you choose to deal with this depends strictly on you and the time and effort you are willing to allocate to this.
Step #2 – Screen your potential tenants
Unfortunately, tenants cannot always be trusted. There are plenty of wonderful people in the world who will treat your property as if it’s their own and preserve its immaculate condition. However, there is an equal amount of people who might want to use your property for unconscionable purposes. It is in your interest to always screen your tenants, no matter how nice they may seem.
There are different reasons why tenants may seem unfavourable such as poor credit scores, eviction history, or criminal records. Regardless of the reason, you should check for any and all discrepancies. Depending on where you live, plenty of credit organizations offer this kind of information to property owners and managers.
Step #3 – Legal Obligations
As someone who has at least one property to their name, you are probably painfully aware of the importance of legal agreements and their execution. A lease agreement is a binding contract like any other. Property managers usually choose to use a generic lease agreement, while homeowners tend to have a more specific one, outlining the parts most important to them. Regardless, it should stipulate both parties’ rights and obligations, as provided by the relevant country’s laws. Breach of contract by either party can result in legal action.
Topics such as rent collection, maintenance and repair, renovations and alterations, purposes of use, and grounds for eviction, among others, are the key topics that need to be addressed in the legal agreement of your rental property.