The pitfalls of property management for real estate investing have been highlighted in numerous stories in the news over the last few weeks. So what can you do to ensure your investments remain profitable and keep producing the maximum possible returns?
1. Minimize Maintenance Calls
Maintenance calls are one of the biggest hassles for landlords. To avoid midnight calls to change light bulbs and fix leaky faucets consider putting a clause in your leases requiring tenants to cover minor repair items. For example: anything up to $150.
2. Don’t Hesitate on Posting Eviction Notices
Whether you are serious about following all the way through with an eviction or not being consistent about posting notices immediately will keep the pressure on tenants and increase their motivation to find a way to pay quickly. This will make a big difference in keeping your income from real estate investing consistent and the bills paid on time.
3. Pay Tenants to Get Out?
Mortgage lenders are paying homeowners to get out so why shouldn’t landlords? It may not make sense in every case but if a problem tenant just can’t afford to leave and you can increase your real estate investing returns by re-renting the unit at a higher rate if vacated why not offer to pay them to get out? It could be a lot faster and less expensive than going through the courts and having them trash the place.
4. Get Better at Tenant Screening
Savvy real estate investing professionals know that longer term tenants can minimize expenses and thus increase returns and ease of management. So the better you get at screening the better tenants you will have. In addition to credit or background checks the most serious investors even go as far as meeting with prospective tenants at their current residences to see how well they keep the property maintained.
5. Screen Your Property Managers Even More Rigorously
Many of those in real estate investing are choosing to set up their own property management companies instead of outsourcing everything to an established firm. If this includes you be extremely careful about who you hire as they can become a big liability. Make sure to document everything, extremely well.