Property Management

Property management skills are crucial to real estate investing success. It will affect your bottom line providing you with either negative or positive cash flow.  Buying and holding rental property is the long term way to build real estate wealth but it must be done properly.  Rental property management can be a "hands-on" or an "autopilot" operation.  When investing in income-producing properties, cash flow, cash flow, cash flow is more important than location.  The Landlord Protection Agency has everything you need to make property management easy and profitable including FREE property management software and FREE forms!

The following are a few guidelines to consider when managing your own rental properties which can significantly cut the cost of property mangement.

APARTMENT RENTAL                                                    

Setting Rents                                                                              

The amount of rent charged for an apartment can be easily determined by noting other rents listed in classified ads, by contacting real estate agents and talking to other landlords.  You should also determine if there are any restrictions to rent and subsequent increases governed by rent control.  Another factor would be whether or not you will rent to Section 8 subsidized (guaranteed rent) tenants whose rents can be higher than the market rents within an area. There is a yearly re-inspection of these units.

Advertising

One of the easiest and low-cost ways to advertise an apartment is to use a "For Rent" sign.  This works especially well in declining neighborhoods where it may be more difficult to rent.  Anyone who calls your ad after seeing your sign in one of these areas is probably aware of the existing conditions in the neighborhood and is willing to live there anyway.  Real estate agents maintain lists of clients looking to rent apartments and charge the prospective tenant a fee and therefore it is a free service to you.  Also the Sunday newspaper is the most popular day for classified ads.  Lastly, get the word out that you have vacancies to fill.

Telephone Interviews and Setting Appointments

When answering calls try to screen out as many people as possible by verifying certain data up front.  Charging an application fee (i.e. $35-50) is reasonable, but also eliminates those who don't want to pay it.  Always require a photo id to verify the identity of the person who will be renting.  Here is a great eliminator--insist that the prospective renter provide proof of rent payments for the last six months to the present to determine if payments have been made on time.  Those who have had problems will soon hang up.  Ask the caller if they have any objections to your contacting their present and/or previous landlord.  Those who object, you can probably eliminate.  Tell the caller that a condition of rental is an inspection of their current residence--and actually do the inspection.  If you do find someone who might be qualified, insist that they call to confirm their appointment at least one hour prior to showing.  You would be surprised how many "no shows" you can encounter.

Verify Applicant Data and Sign Lease

There are websites like WebInvestigator (As Seen On TV) that can be used to do searches and credit checks.  Once the tenant is selected, have him/her sign the lease and include stipulations such as:

• 1 1/2 month security deposit by bank check or money order (to be returned within 30 days after the tenant vacates the apartment and provides a forwarding address
• First month's rent due within 14 days of occupancy
• Require renter's insurance