In the United States, over 44 million Americans rent out their living space. With so many people needing a place to live, rental properties offer a lucrative business opportunity.
But, they can also turn into a nightmare if you do not manage them properly. Keep reading to learn five strategies for managing rental properties so that you can make the most out of your investment.
When learning how to manage a rental property, you must not forget about the laws. Attempting to rent out an apartment without knowing what you can and cannot do can quickly get you into trouble.
Tenants can and will sue you if your property and/or your management do not follow guidelines. Rental laws can change, so review your rights and your tenants’ rights from time to time and survey the home to ensure it meets the criteria.
Investment property management should make you money. But, it should not take advantage of people who need a place to live.
Find a balance to make the most money while acting fairly with a pricing strategy. Study the housing market each time you list a property.
Learn what houses or apartments of that size and structure go for in your area. Also, determine the average income of people living in that area. This will help you reach a number that works. Find more information here.
You must draw up a leasing agreement for your rental properties. This lays down the rules for your tenants, so they cannot debate what they can and cannot do there.
A lease also protects your rights and the tenant’s rights. It keeps your tenant from bailing early and prevents you from leaving them homeless without just cause.
When creating a lease, you want to draw up an agreement that protects you and your property. But, you do not want it so strict that people avoid signing into it.
Decide terms and rates that appeal to your target market without hurting you. A longer lease ensures people do not leave you paying into your investment. However, too long and you may miss out on money if the market price goes up.
Know who wants to rent your property. Develop a screening strategy that helps you learn important aspects about potential renters.
Include income, credit, and rental history. You also want to check for criminal background.
Meet with potential renters in person. Get a feel for them to see if they make a good fit.
Rent Collection Strategy
Collecting your money is the point of this entire investment. Develop a strategy that helps your tenant pay.
Get too strict and tenants may fall behind. Act too lenient and they might skip payments.
Set a day that rent is due each month. Allow a small grace period to help them feel at ease when things happen. Protect yourself by charging late fees for each day they go past the grace period without paying.
Make Managing Rental Properties Lucrative
Managing rental properties does require careful strategizing. If you do it properly, you can make great money.
Do you need help with getting your properties seen? Find helpful marketing tips here on our website!