This decision should be pondered carefully and not be taken lightly. Whether you are currently a landlord or considering becoming one, the following suggestions in this series may give you some insight into how to not only cope with this challenging role, but confidently succeed and ultimately save time and money.
Self- manage or hire a professional property manager?
When faced with purchasing one's first investment property, many often decide to take on the property management themselves to save money, attempting to procure the largest possible cash-on-cash return from their down payment and closing costs. The responsibility in being a landlord is not for everyone and must be done with forethought and strategy. As in any job (and you have bought yourself a job)without utilizing proper skill, the experience has known to be disastrous, producing lasting negative effects, forcing even the most well-intentioned investors to run from real estate, never to return.
Becoming your own manager of one or more properties does have its challenges, however there are many ways to create a joyful experience as a landlord and build a portfolio of properties that require very little time and run smoothly.
You must build this tenant/landlord relationship from the beginning as friendly but professional, never getting "too close" as to change the professional dynamic. The mistake many landlords make is becoming friends with the tenants which often leads to the landlord being taken advantage of as new "precedent" continues to be set when the landlord acquiesces to the tenant's requests.
Creating an interdependent tenant can be the major component in a blissful landlord/ tenant relationship. This means developing a tenant who is happy to keep their own unit as well as the common areas and exterior in good shape, and be willing to consult with you regarding any necessary concerns with the property or other tenants.
The kind of relationship you want to avoid is the dependent tenant who is calling you at all hours for any and all reasons from "my tap is leaking" to "the neighbour's dog keeps me awake by barking all night."
Another relationship to avoid is the independent tenant who makes their own rules. They tend to do everything on their own from repairing things on their own and expecting you to pay for the repair later, even before you knew a repair was necessary, to "managing " the other tenants in the building, which often becomes a reason for other tenants to vacate.
Therefore, an interdependent tenant is your ideal long-term tenant who you can count on to be reliable, helpful and pay their rent on time. This relationship development can begin at the point of your ad.
Placing effective ads
Time in your business is crucial. You must make the most of your time at every turn. Do your best to "weed out" any time-wasters as they often cost you time and money later. By being extremely diligent in the beginning you can avoid many tenant disasters. This process starts with how you word your ads.
"Apartment for rent in Candlestick Park: 2 BR, $1200. Call 000-000-0000." You have just put yourself in the same category as everyone else running an ad. To differentiate yourself from the competition, you must become more creative. "A Rare Opportunity! A recent vacancy in the extremely desirable Candlestick Park area. Over-sized 2BR apartment. Spectacular view of neighbourhood. This won't last! Call 000- 000-0000 to get the address of this gem." You have now successfully created curiosity and desire.
When a person calls the number from an average ad, they speak directly with the owner, provided the property is self-managed.
For you, this is a time-killer because the same questions are asked, which takes both time and energy to be answering these repetitive calls. Why not have the advertised number go directly to an outgoing message that says:
"If you are interested in the 2BR apartment in Candlestick Park, please drive by the property to ensure the area is right for you.
The address is 123 Elm St West. Once you have driven by the apartment and would be interested in a viewing, please call 000- 000-0001. Please do not call until you have driven by and determined if the area is right for you and please do not disturb the current tenants. Thank you."
When they call 000- 000-0001, the number you answer; ask if they have driven by the apartment yet. If they say not yet, tell them you are only accepting applications from people who have driven by the apartment, like the area and want to move to the next stage.
To find out how to evaluate your property management skills, create a unique environment in your rental suites, and screen tenants properly, pick up a copy of our October issue, on newsstands until Oct. 12.
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