Property Management Kit For Dummies. Robert S. Griswold
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rel="nofollow" href="#ua929c3b0-b81d-54d0-a82c-a00745c62496">Chapter 12 helps ensure that your move-in process runs smoothly.
But all good things must come to an end. That end should start with your making sure that the move-out date is mutually agreed-on in writing and that the tenant understands your expectations, policies, and procedures through a tenant move-out information letter. I share more information about making the move-out process as painless as possible for everyone involved in Chapter 16.
Collecting rent
You can greatly improve your chances of making the rent collection process a positive experience by emphasizing your collection policy when your tenant first moves in and by answering for your new tenant all the who, what, when, where, and how questions they may have about their rent payments you collect.
But no matter how carefully you screen your tenants and how thoroughly you explain your rent collection policy, sometimes the inevitable happens, and your tenant is unable to pay the full rent when it’s due. What do you do? Start by issuing reasonable but firm policies when the tenant moves in and enforcing your grace period and late-period policies. Then, if your tenant doesn’t pay the rent or doesn’t live up to their responsibilities under the rental contract, you’re prepared to take the appropriate legal action to regain possession of your property as quickly as possible. Chapter 13 provides more in-depth info to help you collect rent.
Keeping the good tenants
Turnover is your number-one nemesis as a rental property owner. Although it’s inevitable, your ability to renew your leases and provide incentives for your tenants to stay and pay can be significant in controlling your expenses and maximizing your rental income. That’s why keeping your tenants — particularly your good tenants — is a smart move.
Dealing with troublesome tenants
Despite your best tenant-screening efforts, you’re going to make the wrong decision at some point and allow a problem tenant to move in, or you’ll have a good tenant who turns sour. But you can lessen the number of these incidents by getting to know some of the problems you may encounter and how to deal with them early on:
Late or missed rent payments: Timely payment of rent is the lifeblood of real estate investing, because you can’t pay your mortgage or expenses without it. A written rent collection policy is a valuable tool for minimizing these problems. You also need to know about any government or private financial resources available to your tenant to help them pay the past-due rent, as most courts in a post-pandemic environment are less likely to enforce an eviction until all such resources are considered.
Loud tenants: It takes only one boisterous tenant to disrupt the tranquility of the whole neighborhood and destroy your tenants’ right to “quiet enjoyment.” Developing and implementing rental policies and rules can prevent your problem tenant from chasing the good tenants away. At many properties, the one bad apple is the reason why more of the good-apple tenants leave than any other single issue. So don’t underestimate the importance to your cash flow of removing disruptive tenants in a timely and legally allowed manner.
Chapter 15 gives you some additional tools for dealing with problem tenants effectively. I also describe the best way to handle common tenant problems and the pros and cons of alternatives to an eviction.
Maintaining the property
Are you familiar with the saying “To own is to maintain”? When you have only a few rental units or are just starting, you often do much of the maintenance work on your units yourself. But as you acquire more properties or advance in your primary career, you need to explore the benefits and consequences of using employees. If you own a medium-size to large property, having an on-site employee who’s responsible for its day-to-day management is mandatory.
To keep your property in tip-top shape, you also need to work with outside vendors and suppliers who are pros within their industry. Always keep in mind that you get what you pay for and that maintenance can be one of the largest expenses that landlords face. Part 4 helps you navigate the nitty-gritty, hands-on aspects of managing employees, vendors, and contractors and maintaining your property.
Protecting your investment
Like many property managers, you probably consider your property to be an investment. If you continuously lose money, having the property isn’t worth the hassle or the expense, right? Not to worry. Although you can’t predict bad weather or crime, you can safeguard the value of your investment by doing the following:
Being aware of environmental hazards that can occur: Minimize your risk, and be prepared for natural or environmental hazards such as storms, fire, carbon-monoxide gas, bedbugs, and mold. See Chapter 19 for details.
Buying the necessary insurance: You can’t avoid buying insurance, so I make sure that you know enough to be dangerous when your insurance agent says you need coverage for snowstorms at your duplex in Phoenix. Chapter 20 covers the types of insurance you need to consider.
Paying your taxes: Property taxes are a reality of life almost everywhere. Chapter 20 makes sure that you know how they’re calculated and what you can do to minimize your tax payments by appealing your property’s assessed value when market conditions decline.
Tracking your money: You may not want to be a greedy landlord, but you’d better track your income and your expenses, as you’ll need to file income tax returns annually. In Chapter 21, I cover the best way to organize your files and the top property management software that you can use to streamline and simplify this important but potentially time-consuming aspect of managing rental housing.
Increasing your cash flow: Sometimes, recouping all the costs for your property isn’t easy, so you may need to find ways to get more cash in your hands. As you discover in Chapter 22, a wide assortment of options awaits, including government-subsidized housing programs, special niche housing markets, and lease options.
Chapter 2
Do You Have What It Takes to Manage Your Own Rental Property?
IN THIS CHAPTER
