Unlocking Rental Success: 13 Property Management Keys!

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13 Keys To Rental Success

Successful rental owners follow these guidelines to ensure the success of their rental, and maximize their owning experience.

1. Treat your rental property like a business… because it is a business!
2. Have a financial reserve set aside for the “unexpected.”Placing 3-months rental income into a separate bank account can build a safety net around your rental property.
3. Expect the “unexpected.”At some point, something will happen that disrupts your monthly cash flow. It’s inevitable – whether it’s a major repair, capital improvement, or a tenant that loses their job. If you’re financially prepared, with funds set aside, it’s not a big deal.
4. Savvy investors put 10-15% of the annual rental income back into the property.Think of it as investing into your retirement account. Except in this case, it’s upkeep, maintenance, tenant turnover, etc.
5. Plan on maintaining the property.Attractive well-maintained properties allow your property manager to quickly place high quality tenants and keep them happy. Long-term tenancies and low vacancy rates are simple ways to maximize income and eliminate expenses that occur each time a property is turned over to new tenants.
6. Pay the mortgage a month ahead of collecting rent.If there is an underlying mortgage, use June’s rental income to pay July’s mortgage payment. Staying a month ahead is simply financial common sense. Being setup on “Full-Month Accounting” is a great way to follow this guideline.
7. Maintain a good rental liability insurance policy that additionally insures your property manager.A homeowner policy does not offer the protection you need. Oftentimes, insurance premium discounts are available for having a professional property manager in place.
8. Keep landscaping simple.Remove anything that’s a hassle for tenants to maintain. Flower and vegetable gardens can be replaced with bark or rock. This simplifies turnovers and reduces costs for you and your tenants.
9. Don’t leave the washer or dryer.Unless the space requires stackables, remove them. They rarely bring more rent unless they’re in an apartment complex. If you provide a washer and dryer at move-in, you must maintain or replace them when something goes wrong, at your expense.
10. Disconnect emotionally from the property.This can be difficult if you have lived there at some point. In order to make the best financial decisions, remember that your former home is now a money-making business.
11. Allow your property manager to do their job.Keep an arm’s-length relationship with your property and allow the professional you hired to make day-to-day decisions on your behalf. Micro-managing your property manager is a recipe for a failed management strategy. Remember why you hired them in the first place.
12. Focus on results – not details.As the owner, you should know the key financial and performance metrics. Let your property manager handle the rest. Learn to be okay with not knowing every detail.
13. Remember that your property is subject to Fair Housing and other laws.Professional property managers cannot discriminate against protected classes. The same set of qualification criteria must be used to screen all applicants for your property.

Conclusion

Treating your rental property as a business is key to achieving success and profitability. Setting aside a financial reserve equal to at least three months of rental income will provide a safety net for unforeseen circumstances. Whether it’s a significant repair or a tenant suddenly losing their job, being financially prepared can turn potential crises into manageable situations.

Investors should plan on investing back into their property regularly, with the recommendation being 10-15% of the annual rental income. This investment can be used for maintenance, tenant turnover costs, and other expenses that may arise. Regular maintenance not only keeps the property attractive and appealing to high-quality tenants but also ensures long-term tenancies and low vacancy rates, both of which are crucial to maximizing income.

Remember, once you decide to rent out a property, it becomes a business rather than a home. Emotional detachment is necessary to make the best decisions for the property. Let your property manager handle the day-to-day management and focus on the overall results rather than every minor detail.

Finally, always be aware of Fair Housing laws and other relevant regulations. Discrimination against protected classes is illegal, and all applicants must be screened using the same criteria. By adhering to these guidelines, you’ll be well-positioned to maximize your return on investment while minimizing potential risks and pitfalls.