One of the best ways to earn a passive income is through owning and managing property rentals. Right at the outset, purchasing your rental property comes with a hefty investment amount. In the long run, however, once the monthly income coming in from your rental properties accumulates, you get to have that passive income. This, you can earn, on top of your day job, or, if you already have a lot of stable properties, it may even become your main source of income.
Earning a good income from your property rentals, however, doesn’t come as an absolute, without the need of any effort. You need to learn the ins and outs of property management to attract more tenants to your property, such that you can make it more attractive to a lot of potential tenants. When you’ve put in money into buying your rental properties, you should also strive for a fast return on your investment and, later on, profits.
As your quick guide, here are five tips on how you can effectively manage your property rentals:
- Always Be Responsive With Your Communications
The key to having more tenants is being responsive to your communications. Every time a potential tenant comes in to inquire, it’s very important to address the concern immediately. If you aren’t responsive, this can easily tick potential tenants off, whereby they’ll end up looking for other rental properties instead.
So, if you’re managing your properties all on your own, even if you may be doing so remotely, make it a point to check all your emails every single day. If your properties are listed on rental portals, such as HomeHost and others in your local area, go through the inquiries. The same holds for your social media accounts if you’re advertising there as well.
If you do have a property manager for your overseas rental properties, then create that standard with them too for ease of communication.
The last thing you’ll want is to lose tenants in favour of other rental properties, all because you’re unresponsive.
- Determine The Right Rental Rates
Price your rental property too high, and you lose tenants. Price it too low, and you’re cheating yourself of the earning potential of your property. For starters, you should, therefore, learn how to price your rental property accurately so you can drive investment property returns higher.
If you don’t have insights and experience on the pricing of rental properties, you can always submit your rental properties to an appraiser. Or, you can also look into the price of other similar properties within the same area. By doing so, you can have the most competitive pricing for your rental property.
- Employ A Man On The Ground
Even if you live in the same state or area where your rental properties are located, it helps to employ a man on the ground. This means having a maintenance man or caretaker employed to be present in the rental properties.
Say, for instance, you have ten rental properties in the same apartment complex. Having a man on the ground in that apartment complex for all those units ensures that anytime a tenant has a concern, they know who to approach, even for the mundane problems.
This caretaker is especially needed if you have a substantial number of rental units, and you can’t be all in the same place as you also have your day job. Think of this caretaker as your key employee to ensure good tenant service as a part of your customer service rapport with employees.
Most importantly, that man on the ground also serves as the one responsible for the day-to-day maintenance of your rental properties, like cleaning of common areas, for example.
- Learn The Basics Of Bookkeeping
A part of managing your rental properties also entails bookkeeping and tracking your finances. Even if you may have an accountant tasked with that job, it’s important for you to still learn the basics of bookkeeping.
When you know the basics, it’s easier for you to stay in the loop with what your accountant is doing for you. It’s also easier for you to have a grasp of the financial concepts presented in your statements, so you can also study these yourself.
The more control you have over your finances, the higher the likelihood of your properties making good profits as all your finances are in order. Mismanagement of your finances can, unfortunately, also possibly lead to mismanagement of your rental properties, and, therefore, closure.
- Stay On Top Of Your Accounts
Staying on top of your accounts means you should make sure to collect payments from each tenant on the same scheduled deadline, monthly. Then, accordingly, do pay your utilities and other expenses monthly as well.
For as long as the rent keeps coming in from your tenants regularly, there’s no reason for you to be overdue with any of your utility and upkeep bills. Otherwise, delayed payments may only make your financial management of the properties more confusing. And, interest charges may also accrue.
The tips above are only the beginning of what you should do to better manage your rental properties. Once you get the hang of property management, eventually, you’ll also come across other tips for better property management. With the investment you put into rental properties, it’s just but fitting for you to have to strive to give your all, so those investments don’t go stale. Property investment doesn’t have to feel like such a difficult thing to do, but it does take time. You need to put in hard work, close attention to detail, and effort, as the tips above would show.