The Business of Rental Properties – Top 2 Tips for Success
So, you have bought the house at a good price; now what? Here are our Top 2 Tips for Success in the real estate rentals game.
We use that word deliberately – game. It is fun, exciting, there is the chance of loss and when you win… there is usually no better feeling than winning in real estate because it supports the hopes and dreams of your family while also providing for another family safety, security and shelter while they are living in your property.
Tip 1: Decide you will never do what someone else can
You can make money, spend money, then make more money. Once your time is spent you can never recover it and generate more time when you need it. Delegating the management of your property is essential to your success. The average cost of property management is 8-12% of the weekly or monthly rental paid by the tenant to you. In most circumstances your tenant will pay their rental fees directly to the property management company.
At the end of each month (or any other agreed period of time) the net income will be paid to your bank account, less any deductions such as maintenance, refunds, taxes, or other moneys you have agreed that the managers will pay on your behalf. Property managers are usually responsible for:
- Setting, adjusting and collecting the rent
- Finding and screening potential tenants, arranging interviews with you (if you want)
- Creating, signing and enforcing the lease or rental conditions
- Completing an inventory of the property with potential tenants and ensuring all items are listed
- Maintaining the condition of the property, arranging repairs when needed, dealing with and paying for contractors
- Regular inspections of the property and reporting to you on a scheduled agreed (usually quarterly)
Tip 2: Provide for tenant care
Do you mow or cut your own lawns? What about the hedges, trees and bushes? You may not enjoy doing these types of activities, but they can be a bonding experience for tenants regarding the house and land. It gives the tenants a feeling of pride when they know they made ‘the place look great’.
You’re more likely to hear a tenant say ‘my lawn’ or ‘my garden’ and actually care for both if they have the tools provided to keep the place looking good. Here are some tools to provide in the property (and list as inventory in the agreement):
- hedge clippers
- brush & shovel – indoor and outdoor
- mop and bucket – indoor and outdoor
- rake and large, portable rubbish/s with wheels
With these essential items, your tenants can easily care for ‘their home’ and your property will need less maintenance as time goes by. If you are looking to buy or sell a property for investment or cash return, contact us today. We are the Orange County experts!