Be it for a landlord or an investor, in order to convert a property into a profitable investment, the rental property must be managed properly. Managing a property isn’t just about finding new tenants or fixing things when they are broken; there is so much more to it than that! For those of you who are new to managing rental properties, or for those of you who are struggling to manage multiple properties, here are 9 tips to help you manage your rental properties effectively and effortlessly.
1. Think of it as a business
Every business works to gain a profit. Certain rules need to be followed in business and some of the revenue is usually reinvested in the business. Similarly, you need to think of managing your rental property as a running business that is giving you income. You need to invest in properties that will return profits in the long run, you need to follow the rules and have a good reputation in the industry.
2. Reinvest in your business
You need to reinvest some of the revenue back into the rental property to ensure that your property always stays top-notch. The more people using your property, the more you need to reinvest to ensure it stays in optimum condition. This is especially important for high-end properties, such as townhouses and penthouses in Greater London!
3. Always screen the tenants
No landlord wants to rent their property to a tenant who will misuse the space or not pay the rent on time. In order to avoid such colossal mistakes, you must screen every potential tenant before signing the dotted line on the rental agreement. You want to find a tenant who is responsible; one who has a good rental background and can pay the rent on time. Running a credit score check and a background check is always a good idea.
4. Find the right price point
You don’t want to price the monthly rental so high that no one can afford it, nor do you want to price it so low that you’re basically losing money. To find the right price point, you need to do some research. Find similar properties in similar areas and neighbourhoods and try to figure out the right price for your property based on the market average. For example, if you’ve got a property in Bracknell, then you should get in touch with estate agents in Bracknell to help you find the right price point.
5. Have a detailed lease agreement
Think of the lease agreement or the rental agreement as a legally binding document, which it is. The agreement should clearly state the terms and conditions that both parties have agreed to, the monthly rent and on which date the rent will be paid as well as the consequences of violating the terms of the rental agreement. From property maintenance to parking spaces, from pest control to sub-letting, everything should be clearly mentioned in the lease.
6. Opt for online payments
The best way to ensure that you get the rental income every month, without delay, is by opting for online payments. You should give your tenants very clear instructions about when they have to pay the rent and how the rent should be paid. In fact, there are quite a few applications and websites that can help you automate payments so you no longer have to struggle to collect rent.
7. Document everything
Every conversation, every email and every condition that was agreed to before the rental agreement was signed should be documented. This should include a comprehensive inventory and check-in report. Not only will this help you save a lot of time but it will also help you manage your properties effectively. The items in the property, the last time the plumbing was checked or when the air conditioners were serviced – you should have everything documented!
8. Hold on to good tenants
It is very difficult to find good tenants who pay their rent on time and actually respect the property that they are living in. So, if you’ve found a good tenant who is responsible, you should try to hold on to them. You can do this by not increasing the rent significantly, or even offering a slight discount,or you could offer to lower the security deposit required.
9. Build good relationships
In this industry, communication is key. You should be able to build good relationships with your tenants so that there is open and honest communication between you and your tenant. Also, you should have good relationships with your letting agents so that they can help you fill any void periods.