If there is a problem with the property you are managing, you need to get it fixed ASAP to save time and money. But before you get to the fixing, toiling, and sweating, you need to figure out what the situation is. Ask the owner a couple of questions to get a picture of how bad the problem is, then prepare a solution for it.
Here are 3 problematic situations you could face as a property manager:
Situation 1: Discontented Customers
In any business, reputation means everything. So it is essential for you as a property manager to maintain it. In case of dissatisfied tenants, make sure you do everything in your power to reverse the situation. If you fail to turn things around and make them forget about their negative experience with you, they may inform other potential customers about it and this could affect business for you.
In case they hop on the Internet and blow up your Twitter page to inform others about your services and to disparage you, you can do a bit of damage control. Google your company name to find out what people have to say about your company. Identify the negative comments and respond to them. Own up to the mistake and mention the ways in which you have taken care of it.
Situation 2: Bug Issues
If you are dealing with bug problems, do not delay calling pest control! Insects like bed bugs and termites can affect the health of the people living on the property and the structure and integrity of the property. It will result in additional costs to deal both in terms of both finances and reputation. Get your property checked before and after your tenants vacate. This way, you can reduce the chances of vermin and pest issues.
Situation 3: Higher Percentage of Rent Skippers
Compared to the property management scene years ago, you have all the necessary tools to thoroughly screen tenants before giving them the keys to your properties. Ask potential tenants to provide you with details about their income, jobs, history as tenants and so on. If you find any details that could affect their ability to pay rent inform them of this and ask them how they plan on paying if they suddenly don’t have the finances to pay the rent.
If the renter or the potential renter does not have steady work or a consistent flow of income then they probably are not someone you want to deal with.
Prepare documentation that gives them enough time to come up with the money in case they are struggling financially. At the same time, put in clauses that will ensure you get paid, such as a third-party, who will pay the rent on their behalf should they fail to make a rent payment. This could be their parents or a relative.
Now that summer’s ended, winter’s on its way means it’s time for property managers to get a head start in preparing for the holiday season. It’s time to do seasonal maintenance checks so that you can save money, improve the curb appeal of the property you’re managing, and keep the residents happy too.
Here are a few areas that you should look into during the end of the summer property upkeep process:
1. Check the insulation
Winter means cold weather is coming into the picture, so ensure the homes on your properties are properly insulated. Examine the exteriors of each property to see if they need new weather stripping or caulking. Also take a good look at the doors and windows to ensure they close tight enough to prevent cold air from getting in.
2. Clean the chimney and light the fireplace
If your properties have fireplaces, be sure to clean the chimney thoroughly to get rid of any dirt and debris. Clean the fireplace and liners too to avoid the buildup of soot and ash. In case of an electric fireplace always test it before winter to know if it is working fine or not.
3. Inspect the air flow
Dust is bound to build up over the summer months, so always clean your room fans, vents, baseboard heaters, dryer vents, and HVAC units thoroughly. It will help them work smoothly without blocking the airflow.
4. Service heating units
By turning on your HVAC unit you can make sure it’s in golden and suitable condition and can heat up the room in just a few minutes. Get a professional to service it so that it won’t fail the renter during the winter when needed most.
5. Clear the gutters
If you don’t clean up the gutters, they will get clogged during the winter. It could result in warping, broken shingles, and roof leakage. So get those gutters cleared and cleaned by removing the twigs and leaves that accumulate in them. At the end, pass water through them to check for blockages.
6. Clean up the garbage disposal and kitchen sink
Get a plumber to check the garbage disposal and clean it up inside. Scrub the sink clean to remove any grime, rust, or stains. Also, check the rest of the kitchen for vermin and disinfect the whole area.
7. Clean up the bathrooms
Scrub the bathroom floors until they sparkle to get rid of mildew and bacteria. Clean every inch on the sinks, showers, tubs, and floors to disinfect them of any germs and to get rid of any dirt stains. Add an air-freshener to keep it from smelling damp.
If the renter(s) is supposed to handle some of these steps then you do not have to worry about those particular steps.
Once you’re through with the maintenance process, you can get through the fall and winter season business without worrying and without any major calamities or complaints.
If you are contemplating selling your residential property, think again. Keeping the property and renting it out could end up being extremely beneficial. And, with reliable and reputable property management firms, you never have to worry about a thing. If you are wondering why you should turn into a landlord, here are some convincing reasons.
Have a New Source of Income
Your residential property can generate income for you. When you rent it out to a tenant, the tenant will pay you rent. After paying for upkeep and other expenses, the amount remaining would be your income.
It is important to fix the rent for your property appropriately. So check in the area for residential properties that are similar to yours and find out the rent they are charging. Your rent should be around the same.
Bear in mind, the income may not be there for all 12 months of the year. If your tenant vacates and depending on the state of the property and the time you get a new tenant, you will not have income. Nonetheless, once a new tenant moves in, the income you were receiving will resume.
Enjoy Tax Benefits
As a landlord, you will profit from many tax benefits when you rent out your residential property. You can easily deduct the interest amount of your mortgage from your tax. Some of the other tax deductions that you can avail include:
Home Office: As a landlord if you maintain a home office, you can deduct the expenses for operating the office as long as you meet certain requirements.
Travel Expenses: If you travel because of your responsibilities as a landlord, you can deduct that amount from your taxes. However, keep meticulous records, since the IRS may ask for them.
Repair Expenses: When you undertake repairs of your property, the amount is completely deductible for that particular tax year.
Depreciation: Over a period of 27.5 years, you can deduct the purchase price of the property from your taxes.
No Boss to Answer To
If you enjoy being a landlord, you can start with one residential property and keep adding to your portfolio. Before you know it, you will turn into a real estate investor with several rental properties to your name. And, with a suitable and reliable property management company handling every aspect of your property, you can enjoy a fantastic life with no boss to answer to. You turn into your own boss – a boss of your own free time.
With so many wonderful benefits, being a landlord is more attractive than selling the property. The long-term benefits are immense.
Before you decide your other residential property can become a rental property and garner you a nice profit each month, there are a few things you need to keep in mind before you take this plunge.
1.Your Rental Income is Taxable
If you think you will laugh all the way to the bank each month after your tenant pays, think again. You have to issue a receipt to your tenant for the rent amount that your tenant will use for his tax deduction. Even if he doesn’t claim a deduction with your receipt, as a landlord, you have to declare the rental income and pay taxes on it.
2.The Rent Amount will be Used for Expenses
Your property will require periodic maintenance, repair, and upkeep. This expense will come out of the rent. As a rule of thumb, you should set aside about two months of rent every year for maintenance and upkeep. Remember, you will have to paint, get the property cleaned and repair appliances after your tenants vacate. This expense too will come out of the rent amount.
3.You may not get the Kind of Tenants You Want
Depending on where your property is located and the amenities around it, you will attract a certain type of tenant. Well, whether you like it or not, you may not always pick up a tenant you like. At times, you may be forced to give your property to a tenant even if you don’t like him because it is better to rent out your property than let it remain vacant.
4.Tenants can be Hard to Evict
If you decide you don’t want a tenant any longer, you may find it really tough to evict him. Many tenants are well-versed with the laws governing them and you should know your rights as a landlord. So if you don’t have a valid reason for eviction, you are stuck with the tenant until the lease period expires.
5.Tenants can Leave Before the Lease Expires
Tenants can leave before the rental agreement comes to an end. This can be expensive, as you will have to once again get the property cleaned, repair appliances, and manage those minor repairs. Then your search for a new tenant begins. During this period, you will not generate any income from your property.
Since being a landlord can be tough, especially if you have to handle everything, most landlords tend to use property management companies. These companies make sure you get the kind of tenant you desire and will handle every aspect of your rental property, right from minor repairs and general upkeep to collecting rent and conducting a background and credit check on prospective tenants. A property management company offers you peace of mind and lets you enjoy the real benefits of being a landlord.
The benefits of renting out your property may be many, but managing it can be difficult. This is especially true if it isn’t your full time job. But that doesn’t mean you have to give up being a landlord. You can still benefit from renting out the property you own even if you don’t have the time or resources to manage it. All you need is an experienced and reliable property manager.
But which property manager will suit your needs best?
To know that, you need to think about a couple of things before selecting your ideal property manager.
Check out a reputable firm
Getting the help of a professional means you need to find one. To do that you need to make sure the property manager you are checking out has a property management license. This will let you know that they are serious about their job and will take all the necessary steps to ensure you secure effective and sound management.
Ask about the management fees
What will be their cut from the rent earned? The management fees usually vary from state to state. However, you should expect it to fall within the bracket of 8 to 10% of the rent acquired every month.
How often will the property be assessed?
Find out when the property manager plans on inspecting the property and how often. Regular checks can help keep your property in tip-top shape. If you have long-term tenants, the property needs to be scrutinized on the inside and the outside for any problem or damage that may not have been reported.
Request for references and a representative sample
To know if you are getting the best, you need to see it for yourself. So ask the property manager to offer you some references you could call, as well as some representative samples of the properties he has managed. What do other people have to say about their management services? Also, once you see the samples, do you feel like living there? If the answer is a yes, you can go ahead and pick that manager. If no, move on amicably.
Question about maintenance and repairs
Will you be billed for maintenance and repairs or will the manager keep a reserve from your funds to deal with these expenses? Ask them if you can control the limit of the funds usage if they provide the latter option. With a limit, you will be able to control their spending of your money. Also, ask to be informed before any expenses are covered.
Finally, at the end of it all make sure you have a written agreement with a termination clause that is suitable to you. Make sure the agreement highlights all the responsibilities that the property management firm will undertake on your behalf.