Owning real estate is a potentially lucrative venture. Whether it’s a speculative purchase meant to capture a market uptick, a planned renovation to flip the property, or a long-term rental operation, there’s no question that investing in real estate can help you make money.
If you’re considering going the route of property management, there are a lot of things you’ll need to figure out before you get started. A good plan from the very beginning will help you control costs, minimize surprises, and reduce hassle for as long as you own the property. Let’s look at some of them.
Finding the Property
This is the very beginning of the whole process. If you don’t have a piece of property to rent out, nothing else is relevant. There are lots of different ways to find property. Realtors are an obvious one, but you may also have success in talking with local banks about what they may have in foreclosure. That same information may also be available from local governments, which may be charged with selling delinquent real estate.
You should also consider social media, and not just the pages of those same realtors. Individuals often list their properties on their accounts. There are also property apps available to help property owners, sellers, buyers, and tenants to find each other efficiently and quickly, with a large database of information to help simplify the process.
Providing for Upkeep
This is one area that’s largely up to you. Some landlords like the business because they can save money by doing the repairs and maintenance themselves, while others like to control costs by having many tasks under contract to someone else. There are advantages and disadvantages to each approach, and how they balance out is largely up to you.
Do you really want the headache of finding someone to mow the grass and clear the snow, or would you rather just let Lawn Butler take care of it for you? There’s no one right answer for everybody, but you do need to know what your particular answer is before the work needs to be done. Assess your availability, your skills, your tools, and even your health, and if you don’t have everything it takes for DIY property maintenance, make other plans.
Finding Tenants
This is by far the greatest challenge of property management. How do you go about finding people who will pay on time, take care of the property, and not be a disturbance to neighbors? It’s a complex process, but it boils down to a few basic points.
First, advertise thoroughly. Make sure you’re getting your property out there in ways that quality tenants can find it. Use apps and social media to your advantage.
Then, once someone inquires, check them out. Get a police background check, and review their landlord references–including more than just the current landlord, who might give a glowing recommendation in hopes of getting rid of them. Set policies and rules, inform the tenants of those requirements in writing, and don’t deviate from them.
Perhaps no enterprise is as widely used as owning rental property. It’s a great opportunity for additional income generated with only a minimal investment of work and good growth potential for your financial investment. It’s also an enterprise that can grow large enough to be your primary source of income.
Whatever goals you may have for your foray into real estate, remember that you are running a business. You are investing your time and money with the expectation of a measurable return, and that means being logical and systematic with which properties you buy, how you maintain them, and most of all, how you get them rented. With a business-like approach, you can find your rental business in the black.