Hassle-Free Property Management
Updated: Feb 23, 2020
It is probably a universal desire to #MaximizeIncome while #ReducingWorkTime. Investing in #IncomeProperties is an excellent way to do both of those things if it is done properly. Of course, investing poorly can lead to loss of time and income. This is why I would love to teach you how my husband and I have #SuccessfullyInvestedInRealEstate over the years and how we have ensured that our income properties are #MakingMoney while not requiring much of our time. When we acquired our fist investment properties we did all of the property management ourselves. We enjoyed it so much that we bought a property management business and our hobby became our full time income. Now we manage our own properties and about 300 other properties. Our initial investments allowed us to generate #extraincome and we want to teach you how part-time investing can work for you too.
How Much Time Does It Really Take?
Finding a property and navigating the loan process takes a good amount of time and re-renting a property always takes some extra time too. I’ll talk about both of those topics in future blogs. I think there are four things we have done differently than some investors to make our properties hassle-free and easy to manage. Of course the easiest way to manage your investment properties is to hire a property management company (like mine! Hint, hint). The standard rate for management is 10% of the rent per month. That may sound high but the management company takes care of everything for you. They rent the property, hire maintenance people, take phone calls from tenants, handle move ins and move outs, take care of emergencies and evictions. So you get a lot for that 10% management fee. Our management company even has automatic payments set up so our owners don't have to cash checks. The monthly profits from their investments just show up automatically in the owner's bank account each month. Super simple! But if you want to manage your own rental property I have a few things you can do to make the management portion more hassle-free.
#1 Tip for Hassle-Free Properties: Buy a Nice Property
In my first real estate blog (https://www.destinationfamilies.com/blog/1-mistake-to-avoid-in-real-estate-investment), I talked about the number one mistake that investors tend to make: buying junk properties. My advice is to only buy a property that you would consider living in yourself. This will ensure that you are buying something that other people want to live in as well. The property should also be in a nice neighborhood and have good curb appeal. When you purchase an income property you should always drive around the area a bit and check to see if the area seems safe and would be a desirable location to live in. There are some great websites where you can check crime rates and school ratings for areas. These tools can help you decide what areas would be better than others to invest in.
Avoid Fixer-Upper Properties if you want them to be Hassle-Free
It’s also best if the property is not so old that it will require a lot of maintenance and/or updates. You might be thinking that buying something old and run down will make a bigger profit if you can fix it up. You can potentially make money on a fixer and many people do. However, I’m teaching you to be a part-time investor and make your business hassle-free. Fixing up houses takes time and money! You can also never fix the location of a house and typically the older run-down houses are in about the same condition as the properties around them which makes the whole area undesirable. In my experience, it is far better to spend a little bit more and purchase an income property that is hassle-free. If your budget is capped at a certain amount you can always buy something smaller that is in good condition and will be more appealing to tenants.
#2 Tip for Hassle-Free Properties: Find Great Renters
Once you have a great property you will need a great tenant to fill it. I cannot tell you how important it is to find good renters in order to ensure that your income property is stress-free and self-sustaining. I have lots of good tips for how you can attract responsible renters that I will talk about in future blogs and my eBook. But in this blog, I wanted to focus on why finding quality renters is important. Let me give you two potential scenarios and I’ll let you decide which one would be better.
Which Tenant Would You Choose?
Let’s say you interview potential tenant A and he tells you his last three landlords were terrible and he really disliked the properties that he was living in and that’s why he is looking for a better place. He is also breaking his lease at his current place and has forgotten to pay his rent a few times. Next, you interview potential tenant B and he tells you that he was very happy at his prior rental property but he is moving to your area for a new job opportunity. You have also talked with potential tenant B’s current landlords and they said they will be sad to see him go because he was one of the best tenants they have ever had; he always pays his rent on time and he even fixed the kitchen faucet and planted a new tree in the front yard for them. Which tenant do you think will be a better tenant for you? Tenant B is the obvious choice here. People are creatures of habit so it’s important to get to know the rental history and habits of your potential tenants before you hand them the keys to your new income property.
I have some book recommendations for income property books through Amazon that can help you educate yourself so you can begin to think like an investor. If you click these links and shop through Amazon it will cost you nothing extra but it could give us a small commission to help us keep bringing you great investment blogs. Thanks! Also, sometimes on a mobile device the links won't be clickable but you can find the same items on our shopping page instead. We also have recommendations for 10 Essential Items for Family Road Trips on the shopping page: https://www.destinationfamilies.com/shop
#3 Tip for Hassle-Free Properties: Build a Good Relationship with your Tenants
After you screen your potential tenants and find a quality renter you will want to build a good relationship with them. You should make every effort to treat them well and let them know that you appreciate their business. Kind of like you would do if you owned a retail business, you would treat your customers well so they treat you and your business well. Essentially real estate is your business and your tenants are your clients. They pay you to provide them with a quality place to live. If you are kind, fair, and quick to respond to problems, your tenants will most likely treat you and your property well. I also always respect my tenant’s privacy. I never show up unannounced or snoop around if I’m there for maintenance issues. I trust them because I have already pre-screened them.
How We Have Built Good Relationships
We’ve only had one tenant move out and not leave our place cleaned properly. I had checked on this tenant the night before he moved and he assured me they would work through the night to get the place looking good. Unfortunately the job wasn’t complete by the next morning. Therefore, this tenant was also the first to lose his deposit refund from us. Naturally, the new renters, who were moving in the next day, were not happy with the condition of the place. My husband and I apologized profusely and rushed over to the house to help. We spent a good part of our day cleaning the house and hauling a load of trash to the dump that the previous family left on the curb. We also later re-cleaned the carpets for them. In total, we spent about 20 hours doing all of this work. Our new renters were so appreciative that we took their concerns seriously and took care of all of the problems that they worked hard to plant grass in the backyard and saved us the cost of installing sod. So it was a win-win deal and we have had a great relationship with those tenants ever since.
#4 Tip for Hassle-Free Properties – Make Managing the Properties Automatic
When you purchase your first income property you will want to set things up to be as automatic as possible. For instance, all of our mortgage payments for our properties are set up for automatic payments from the bank. If you do this one thing, most months all you have to do is deposit the rent that your tenants give you and you are done. I’ve heard you can even deposit checks from your phone. I personally like to drive to the bank once a month and my little guy likes the suckers they hand out so we do it that way. Another thing that can save you time is having your advertisement text and photos saved and ready to go if or when a tenant moves out and you need to re-rent the property. You will also want to have your rental application and lease saved and ready to go for re-renting properties. The last thing to prepare and have ready is a list of maintenance people and handymen who you can call right away when the need arises.
Managing Properties by Phone Calls
My “For Rent” ad is saved on craigslist so I can activate it easily at any time. In fact, one time a renter called me while we were driving to California to give me his 30-day notice and I was able to click a few buttons on my phone and post the ad to craigslist from the car. Pretty cool! I have also made calls for maintenance from the road and taken care of many things without even going over to the property. In fact, the first property we managed was located out-of-state so all management and maintenance was done by making phone calls.
Hassle-Free Investment Summary
The most time-intensive parts of real estate investing are buying, selling and re-renting properties. The managing and maintenance parts should take less than 1 hour per week on average. Therefore, buying and managing a few income properties is an ideal investment strategy for the part-timer. If you stick with our advice from this blog for the top 4 ways to buying and managing hassle-free income properties you will be on the right track for making money and avoiding mistakes. I will close with a thought from Kiyosaki’s book, “Guide to Investing” in it he says this, “The average investor works hard. The rich investor works less and less to make more and more.” I encourage you to think about how a part-time investment in real estate can make you extra income while you work fewer hours. Do you have a question? You can leave a comment or question below or go to our discussions tab and post a question in the real estate section. We look forward to hearing from you!
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