Many people decide to get into the rental property business because they have heard it’s a good way to generate passive income. After all, all you’ll have to do is collect the rent checks every month, right? Unfortunately, the question of, “How do you manage a property?” involves quite a bit more than rent collection. However, you can take a hands-off approach by hiring a professional property management company. This enables you to enjoy your passive income while letting someone else deal with the day-to-day problems of managing rental properties.
How Do You Manage a Property: An Overview
The underlying goal of managing a property is to turn it into a profitable business. In order to achieve this, you need to have high-quality tenants who will pay the rent on time and treat the property with respect. In an ideal world, every tenant would pay on time and take exceptional care of the property. Unfortunately, life doesn’t usually work out like this. In reality, landlords who manage their own properties often have to deal with headaches such as the following:
- Eviction procedures
- Damage to properties beyond reasonable wear and tear
- Pest infestations (sometimes caused by tenants’ lack of attention to cleanliness)
- Tenant complaints against other tenants
- Violations of the rental agreement (such as no pet clauses)
- Criminal activity on the property (such as drug use)
These examples just scratch the surface of what landlords typically have to deal with. As you can see, there is a long list of problems that can come with rental property management.
The Basics of Finding Tenants
Regarding the day-to-day work of property management, the first step is to find tenants. You might think this is as simple as throwing up a quick listing on Craigslist. However, the process of finding good tenants is much more involved than this. You’ll need to stage the property and take pictures. In addition, you’ll need to compile a complete list of all amenities.
You’ll also need to be responsive to prospective tenants who answer your ad via email or phone. It can get quite tiresome after a while to answer the same questions over and over again. Experienced property managers know how to do quick screenings over the phone to avoid having to show properties to certain tenants, such as those who smoke.
Another part of the answer to the question, “How do you manage a property?” is that you’ll have to show the property multiple times to prospective tenants. You’ll need to have them fill out rental applications, and then you’ll need to conduct background checks. Experienced property managers typically do criminal background checks, Social Security verification, income verification, and credit score checks. In particular, they pay attention to the individual’s income to debt ratio, which can hint at whether the person can reliably pay their rent on time.
The Right Way to Manage a Property
An answer to the question, “How do you manage a property?” would be incomplete without a look at property maintenance and repairs. Landlords often wait until the property needs repairs to find a contractor. Unfortunately, a property might sometimes need emergency repairs. This doesn’t leave much time to evaluate contractors before choosing them. An experienced property manager will already have a network of local pros that can be trusted to get the job done right the first time.
In addition, all properties need routine maintenance services. These include water heater flushing, furnace servicing, air conditioner maintenance, and landscaping. It can be stressful for landlords to stay on top of every maintenance task that a rental property requires. Furthermore, it’s good practice to routinely inspect rental properties, yet many landlords find they don’t have the time for this. A professional property manager can handle all of these tasks, allowing the landlord to enjoy more free time.
A Look at Rent Collection
For landlords without a professional property manager, rent collection can be a major hassle. Even if you go to the trouble of finding high-quality tenants, they might sometimes fail to pay their rent on time. Furthermore, even when tenants do pay rent on time, it can be a headache to deal with collecting the checks, organizing the deposits, and then handling the bookkeeping. Plus, you’ll have to wait for the funds to clear.
This is another reason why so many landlords rely on experienced property managers. An established management company will usually have a digital portal. This allows tenants to pay their rent digitally. It reduces late payments and makes funds available to the landlord much more quickly.
As you can see, the answer to the question, “How do you manage a property?” is quite extensive. Furthermore, this explanation only scratches the surface of the day-to-day tasks of the average property manager. When you decide it’s time to hire a professional, contact New Concept Property Management of Tucson at (520) 305-3950. We provide a full suite of property management services at varying price points for your convenience.