Successful property management means staying on top of your finances and managing maintenance requests and tenant communications efficiently.
Successful property management involves numerous practices, from securing funding and finding deals to managing tenants and organizing routine maintenance. Managing your properties can be a complex and time-consuming part of being a real estate investor.
Even if you hire a property management company to deal with the day-to-day aspects such as finding tenants, you still need to have a handle on your rental business. This means understanding the ins and outs of successful property management, staying on top of your finances, and ensuring you have a quality team to help you achieve your long term financial goals.
In this article, we take a look at some top industry tips for streamlining your property management so that you can save time and money and scale your business.
Your time is a limited resource and as your portfolio scales, you simply can’t do everything yourself. Knowing the value of your time means being conscious of which tasks you take on yourself, and which you can be done by others. In order to manage your time most efficiently you need first to understand where it is the most impactful for you to spend it. Then, you need to form a support team that can take on other roles and duties that you yourself may not have the time to do properly.
For example, you should undertake routine inspections of each of your properties, whether that’s every six months or quarterly. If your properties are out of state or you have a lot of properties, then doing all of these inspections yourself is simply not an efficient use of your time. In this scenario, employing a property manager or an individual to manage inspections for you will allow you to focus on the big picture items.
As a landlord, you have a legal obligation to ensure your property is fit and habitable. Before renting your property out then, you need to ensure it meets all the minimum health and safety requirements. This means checking and safety testing the following:
Running a rental is running a business and you have legal obligations toward your tenants. As part of this, it becomes essential to document all communications that go on between your tenants and yourself and to ensure that everything from the lease document and deposit treatment to maintenance requests and notices to enter is all recorded in the proper written format and these records kept safely for posterity.
One of the biggest issues landlords face is rogue tenants. Rogue tenants either refuse to or can’t pay the rent on time and in full every single month, cause damage to property or otherwise operate out of the property in an illegal fashion.
In a worst-case scenario, you will have to evict these tenants. Evictions are a long and arduous process costing anywhere from $3,500 to $10,000 and taking sometimes as long as 6 months to complete. This can be an extreme hinderance to successful property management.
The best cure to this issue is prevention, and the best way to prevent issues is to ensure that you rent to the very best qualified tenants. So how do you find the best tenants? You need to create your listing, collect applications, pre-screen your tenants, organise viewings and once you have likely candidates, run a thorough tenant screening and background check on all of them. The easiest and most time-effective way to do this is to use software like Landlord Studio.
As mentioned previously, your time is a limited resource. How and where you spend your time is important to determine. Figuring out where to spend your time in the most rewarding fashion will allow you to get the most return on your time investment.
Every investor is different and we’ll value things in different ways if, for example, you’re looking to grow and scale your portfolio then you might find that you want to be spending most of your time finding and securing great deals. Alternatively, you might want the financial freedom that owning rental properties with passive income brings. You may want this, for example, so you can spend more time with your family.
In the end, it’s all about what matters most to you. Having systems and processes in place that allow you to organize your time and reap the rewards of your hard work is vital.
Properties are notorious for those big-ticket maintenance items. You often hear about the landlord with a property that required a whole new floor or a new roof. However, more often than not, these expensive jobs are preventable if you catch them early enough. Regular inspections is one way for you to keep an eye on your property and identify potential issues before they become massive problems.
Another key reason to do regular property inspections is to ensure that your tenants are looking after the property in the way that they should. Respectful tenants will treat the property like a home, keep it clean and tidy and report maintenance issues to you. However, you can’t solely rely on your tenants to maintain and look after your property. At the end of the day, it is your property and your money on the line.
In line with our previous point, scheduling preventative maintenance will help ensure that issues don’t become problems. Preventive maintenance can be anything from cleaning gutters to doing yard work or replacing leaky faucets, regularly inspecting appliances to cleaning your HVAC system.
Not only will preventative maintenance allow you to control the cost of larger maintenance needs for your property, it would also prevent many of the potential complaints that your tenants will make throughout the year. This means you won’t need to deal with half as many maintenance requests and you won’t constantly be on the back foot trying to fix issues as they arise.
With new software and technology, you can streamline your processes by employing automation tools. For example, with Landlord Studio, you can set automated tenant communications such as rent reminder emails. You can set these to go out a number of days before or after the rent due date to automatically chase up late payments and ensure on time rent collection.
Additional automation tools might include automated rent collection, automated income tracking and features like recurring expenses, which all contribute to successful property management.
Traditional methods for collecting rent such as cash and checks are outdated, insecure, and inefficient. These methods require tenants to make a physical trip to the bank in the post office or for you yourself to visit the property on a monthly basis to collect the rent. On top of this, cash and checks can easily be lost or stolen.
A better and more efficient way to collect the rent is using online payment software.
You can use anything from Zelle and Venmo to industry-specific software like Landlord Studio. Landlord Studio offers several important functions beneficial to landlords such as autopay. You can allow your tenants to set up automatic payments so they never forget to pay the rent on time again. Additionally, tenants can access the tenant portal to view historical and upcoming payments as well as initiate payments for tenant payable expenses to pay their deposit.
As a real estate investor, you need to know your finances inside and out. You need to have oversight of your monthly cash flow, you need to know exactly where money is being spent and where money can be saved.
However, it can be challenging without the right tools to keep accurate records throughout the year. Without these records and access to reports you could easily find yourself overspending, overpaying taxes, and potentially even falling into negative cash flow.
Whether it’s employing a property management software like Landlord Studio, getting property management certifications, or delegating or outsourcing some of the more time-consuming work, no one can do everything by themselves.
For example, unless you’re an expert in the rules and regulations surrounding the financial management of real estate investments, you’ll want a qualified financial advisor and a quality CPA to ensure your tax return is filed correctly, and that you don’t overpay taxes. Or, if looking into a new kind of real estate investing, you might enter into a joint partnership to leverage the resources and knowledge of an experienced partner.
Knowing where your weaknesses are as a real estate investor and getting the appropriate assistance is an important step to successful property management.
Landlord Studio is the number one rated property management and accounting software designed by landlords for landlords. Landlord Studio simplifies your accounting, allowing you to accurately track income and expenses and gain nuanced oversight of your portfolio’s financial performance. Instantly generate professional reports in .csv or pdf format and share with your business partners and accountant from any device.
These advanced landlord accounting and reporting features are paired with a suite of property management tools, including online rent collection, rental listings, and lease management. These features save you time by automating workflows and centralizing information.