How to Successfully Manage a Residential Investment Property
Property investment is one of the most lucrative professions around the world today. As a property investor, your primary goal is to ensure that you make a profit, and proper management is a crucial factor in achieving that goal.
Whether you own or are in charge of a residential property, I have compiled five essential steps to manage your investment property effectively. Following these steps will set you on the path to becoming a successful property investor. Let’s get started.
Periodic Property Maintenance
Periodic maintenance is essential to retain a property aesthetic value. From regular plumbing repairs to pest prevention, maintaining your property would keep it in good shape. There are specific safety and health standards that your property must meet under the landlord-tenant law. Meeting up to these standards would mean periodic maintenance and frequent updates. It is pertinent to note that residential property has higher health standards than other investment properties. That translates to spending more on residential property than you would on an industrial building. Regardless, you’d be getting the worth of your money. Regular checkups and upgrades to your building would help you retain tenants and even attract new ones.
Keep Your Tenants Satisfied
Like every other kind of business, client satisfaction is vital in managing a residential investment property. Keeping your tenants happy will guarantee that they will continue renting from you. As such, you can be sure of a steady return on your investment. A residential property, unlike other investment property, has more demands. Since people live there, complaints, issues, and requests might arise from the tenants about the state of the property. This time, the occupants can request an upgrade, and some other times, they might want to make some personal changes to the property. Responding quickly to their requests is a good step toward impressing them with your customer service.
You may not be able to grant every request. Some tenants can prove to be more trouble than you think. Setting standard policies and procedures for tenant screening will help you get only good ones and keep the troublesome ones at bay.
Understand and Utilize the Landlord-Tenant Law
Landlord-tenant laws were set in place to help you better understand and manage your tenant and property. These laws serve as a blueprint for you to follow, making the whole process a lot easier. Many issues could arise like tenant eviction and compulsory fees, especially if you are new to the residential investment business. There are specific laws that guide matters concerning a residential property like when and how to evict a tenant.
The landlord-tenant rules will help you know when and how you can solve issues concerning your property legally.
Do well to check with your local area for any additional rules and laws that bind your residential investment property.
Employ a Property Manager
Managing a residential investment property is not as easy as it sounds, especially when you have other tasks or jobs. Employing the services of a property manager is highly advisable. They are much more professional and familiar with the task, but they also save you a lot of time, energy, and possible mistakes. A property manager is undoubtedly not cheap. Therefore, you must weigh your options and decide what you need a property manager to handle.
One advantage of employing a property manager is that you can control what they handle for you. You can decide to hire one to collect rent and handle general repairs while handling other parts of the property. This keeps you connected directly with the operation on the property and helps you keep to a budgeted amount to spend on the property manager. A property manager can change the future of your property either for good or bad, so ensure to screen appropriately so as not to incur a loss.
Don’t Skip Tax Payments
As a property investor, some obligations bind you and your property, one of which is tax payment. Tax payments can get very confusing, most notably because they are residential investment property with different tenants. The fees could differ, and without in-depth knowledge about it, you could make a mistake in your tax payment.
It is most advisable that you employ an accountant that understands Investment Depreciation Schedules and tax laws for your kind of investment property. They would let you know how your tax payments should go, the deductions you are allowed to take, and mistakes you must never make. As a property investor, you can get so occupied with your property’s general management that inevitable slip-ups happen in your tax payments. Such sip ups can raise an issue with the IRS, so it is in your best interest to employ someone to handle it.
Managing a residential property can be frustrating when you don’t know the necessary things you are expected to do. When you get the hang of it, and with the right assistance, you will find that managing a residential property can pay off.