Having your own rental property management plan is key to residential rental property investing.
Its 8:30 at night, your tenant calls and says water is leaking very badly under the sink. Its 8:30 at night, your tenant calls and says the toilets clogged. Its 8:30 at night, your tenant calls and says a window just got smashed. Its 8:30 at night, your tenant calls and says the roofs leaking. Its 8:30 at night, your tenant calls and says the heats not working. Its 8:30 at night, your tenant calls and says the bedroom doorknob fell off.
How about a gutter gets disconnected. No big deal, when it rains make sure your not standing underneath it. Winter comes, where water hits the ground, it starts to collect and then it freezes. Whoops, someone slips there and you get sued. Big problem. It pays to have a rental property management plan.
How about that exterior porch wood that needs painting. No big deal. Next year. Next year comes and goes and you saved 700 bucks not doing it. Three years later you spend $2000 having wood replaced because its to rotted. Big problem. It pays to have a property management plan.
You get the idea, whether something breaks or routine maintenance – things need to get fixed and maintained. A good rental property management plan helps ensure easy and profitable multifamily property investing.
There are three main factors for a good rental property management plan. Knowing who is responsible for managing the properties maintenance, who is going to fix things and when will things get fixed are the three main factors. Having a game plan for these three things is vital for maintaining your rentals. Theses three factors should be addressed and included in the lease. This ensures the tenant knows ahead of time what to expect when things need repairing or maintenance.
Lets start with who will be responsible for managing your rental property. Seventeen years experience of owning rentals has taught me that know one else will be better than the property owner for being responsible for managing the maintenance of your rental units. So the most cost effective rental property management plan has the owner doing the managing.
Before you say, oh god, what a nightmare managing rental property is, let me say I have learned and you can too, how to make property management simple and profitable.
In fact, for those who understand and implement a solid rental management plan correctly and continue investing wisely in cash flowing residential multifamily properties will find that their hourly pay time for managing their rental properties is extremely lucrative.
Needless to say, I personally strongly advise against hiring a management company for residential rental property.
Lets address who is actually going to be fixing broken items or doing the required maintenance?
You, the owner, your payroll help, a hired handyman, who is going to actually be doing the physical work for fixing and maintaining your rental units. Why is it important to have this be part of your rental property management plan?
Well, what you don’t want is having every time something needs to be repaired become a stressful costly headache.
By knowing who is going to be doing the repairs ahead of time, through your rental maintenance plan, you eliminate two potential problems.
One, when a problem does occur, your somewhat prepared by having had developed a list of contacts ahead of time. Secondly, being prepared like this, tremendously reduces stress and makes managing your rental property easy.
Hopefully you see the importance of knowing ahead of time who is responsible for and who is actually going to be doing the maintenance work.
Later, I’ll tell you the third important key for a cost effective, easy to implement rental property management plan.
A few additional things to consider regarding rental property management. If your just starting out and you buy a multifamily house, and your a hands on type person you may want to do as much of the maintenance and repairs as possible.
If you go on to keep investing in multifamily houses you’ll find actually doing the physical maintaining of your income properties to burdensome.
Understand that managing rental properties and doing the physical work are two different things.
If you decide to hire a maintenance man or handyman to do the maintenance, ask around local hardware stores for referrals or ask people in a Home depot or Lowes. They’re not supposed to refer people but I have been pleasantly surprised how many people moonlight or know someone fair priced and reliable.
Look in a local paper for a handy man you can enlist to do the maintenance. Call a few people placing adds, not big print adds, rather the small adds and tell them what kind of help your looking for. Listen to them give their spiel, ask questions and ask if they can offer you anyone who they worked for in past as a recommendation. If they check out tell them you’ll be giving them a call when you need them.
Personally, I do not recommend hiring an outside company to do your rental property management.
Another great place to get names of reliable people to do your repairs and maintenance is through your local REIA group. The more names and numbers for cost effective, reliable maintenance men, the better. Put their names, numbers and what they do into your cell phone or keep them in a special book. I’m sure I’m not the first or last person to put a name and number in a book and later not remember who they are or what they do!
Who might you want to have on your rental property maintenance list before you even need them? A few general handymen, a furnace repair man unless you want to get repair contracts from the gas company if your property heats by gas, an exterminator ( I actually have contracts for quarterly prevention with exterminator on all my units), an appliance repair man if you supply appliances, a plumber, a drain cleaning company and someone to shovel or plow your dwellings.
If you went on to own a lot of multifamily units, you may want to considering hiring someone on full time for doing the physical maintenance work. Personally I prefer having a large network of contacts I can call on for maintenance and repair work over having employees.
If you follow these rental property management guidelines, managing your cash flow units is simply a very profitable job of receiving and making phone calls.
Earlier I mention there was one more important factor to address regarding how to manage your rentals.y.
When will things be repaired? Put in the lease or addendum how long you have to make arrangements to have things fixed, twenty four, forty eight, seventy two hours? Put it in the lease so tenant knows how you maintain your property. It may seem silly, but I’ve found by having the tenants being aware of how you manage and maintain your rentals the less misunderstandings you’ll have.
Remember, your in charge. Its your property and having a solid rental property plan and informing your tenants how you maintain your rental property will make owning investment property all the better.
As they say in the hood, everyone knows what time it is.
Mark Petrelis has owned and managed his own rental property, primarily 2-6 unit buildings since “92”. Rental property management has become easy and very profitable. Some of the rental properties were total rehabs while others had existing tenants and only needed cosmetics.