5 WAYS TO MANAGE YOUR RENTAL PROPERTY PORTFOLIO BETTER
Acquiring an investment property is only the first step of building your property investment portfolio. This is, of course, a very important step. However, after you buy an investment property, you must manage that property.
When it comes to property management, the first choice you need to make is whether you will manage the properties yourself or use a company to manage them on your behalf. In our article, How to Manage your Rental Property the Easy Way, we discuss the benefits of using a property management company.
Irrespective of whether you will manage the properties yourself or use a rental management company, the following five principles are critical to apply.
Everything regarding property management starts with tenant vetting. If you screen your tenants thoroughly before placing them, the chances are good that you will not have many problems with your tenants. Ensure that your tenants can afford the rent and that your prospective tenants have a good credit score.
2) LEASE AGREEMENT
I always say, “There is no better gentleman’s agreement than a legal agreement.” In other words, your lease agreements should be solid and updated. When there is trouble with your tenants, you don’t want to struggle with an outdated contract that does not cover you.
Property maintenance is a critical aspect of managing your property portfolio. Keep your properties in great condition because when you look after your tenants, they will look after you. When something breaks, fix it immediately. In our article, To Renovate or Not to Renovate… That is the Question…, we discuss how to keep your property in shipshape.
4) PROPERTY INSPECTIONS
Property inspections allow you to enter each transaction fully knowing what you are getting yourself into. Make sure that you do an entry inspection and an exit inspection every time a tenant moves. I recommend doing annual or bi-annual inspections to ensure your tenants look after your property.
5) RENTAL MANAGEMENT SYSTEMS
Last but not least, use a proper (preferably automated) rental management system. There is great software available that provides a platform for invoicing and collections, reconciling payments, and setting reminders for rental inspections and escalations. In our article, The Best Way to Build your Property Investment, we discuss how you can use automate your property portfolio.
Good property management minimises your risk and improves your ROI, so be sure to make it a priority in your property investment portfolio.