You’ve found your long-term rental property, now it’s time to figure out the fine details of how you’re going to manage it. Although managing a property may seem overwhelming, many landlords find it helpful to follow these 6 tips when assigning a strategy to effectively manage their long-term rental property.
6 Ways to Effectively Manage Your Long-Term Rental
Determine Fair Market Rent
Some investors consider determining a fair market rent price to be a mixture of both art and science; when the rent is too high, qualified tenants are discouraged to apply. On the other hand, when the rent is too low this can reduce potential returns for an investor. When setting the rent for your long-term property, you should consider the following:
- Median household and per capita income for the area
- Prospective tenant demographics such as singles or families
- Median rent that the competition is charging
- Property amenities justifying a higher rent such as a large garage or swimming pool
Depending on the market conditions and the amenities offered at your property, rent pricing can vary between locations.
Inspect and Maintain the Property
Performing routine maintenance is a part of owning any investment property. In the case of an emergency, you should be well equipped to handle these situations promptly. The example you set of your property goes a long way; tenants appreciate your promptness and are more willing to commit to long-term leases. On top of performing monthly, seasonal, and yearly routine maintenance tasks, you should always be present when hired personnel is working on your property. Important maintenance tasks include:
- Checking smoke and carbon monoxide detectors
- Checking hot water and heat in the rental
- Providing proper safety equipment such as fire extinguishers
- Ensuring all locks are re-keyed before new tenant moves in
- Making sure the property is free of lead-based paint
- Keeping the property free of mold, rodents, and roaches
Screen Tenants Properly
The quality of your investment will be determined by the tenants you chose to lease to. It’s important to screen tenants carefully to make sure they are responsible enough to pay the rent on time and keep the property free from damage. While screening your tenants, be sure to always comply with applicable fair housing laws that prohibit discrimination. To find out more information about your tenants, consider running a background check, verifying the applicant’s credit, or asking for proof of income. Once you’ve found tenants that comply with your criteria, create a lease for your legal advisor to overlook that both you and the tenant can agree upon.
Keep Records Organized
The first step to success is having a system of organization that works for you. With all the documents you will come into contact with, it’s important to properly keep records in a safe place where you can quickly gain access to them. Every real estate investor should keep a copy of rental applications, proof of property and landlord insurance, and rental receipts. Securely storing your records also allows for safe retrieval when tax season comes.
Communicate with Tenants Regularly
Communication is key to building trust with your tenants. Respect goes a long way in the rental market, as word of mouth tends to get spread. Communication and flexibility are important when attracting and retaining clients, so make sure you’re approachable and easy to reach. When you need to access your rental property, you should always give tenants a proper notice before showing up. For an investor dealing with multiple rental properties, a property management tool might be your best instrument for communication. On the other hand, investors with only one rental property may find it easier to call or text as their channel of communication.
Respond Promptly to Repair Requests
In the case of a repair issue arising, it’s important to always respond promptly to these requests as it can save you money in the long run. Not only is it your obligation under landlord tenant laws, responding promptly to repair requests is also crucial to maintaining your investment. Depending on the state your rental property resides in, there will be different laws regarding the timespan it takes to respond to minor repairs. When problems are left uncared for, they only turn into bigger, more expensive fixes down the road.
RCN Capital offers short-term and long-term financing options for real estate investors. Whether you are looking to fix & flip properties or hold properties for rental income, RCN has flexible options that are suited to your needs. Connect with us today to discuss your next real estate investment.