Looking to start investing in Real Estate? Read this guide that is full of information to help the beginning novice learn how to begin mastering the real estate market. From renting, to selling, to buying my goal is to help educate as much as possible.
For a successful real estate business that is involving rental property, you must make a decision as to whether you will manage the property yourself or hire a property management company to handle it for you. If you select a property management company you need to make sure it is financially acceptable, if you choose to do it yourself you need to make sure you have the time and energy to put into managing it.
If you elect to use a property management company you must ensure that all details are outlined in a contract, for example, what their fees are, hours of operation, what issues they will handle. Will the management fill vacancies for the normal monthly fee, or will there be additional fees associated with this, will they handle any eviction processes that present themselves, will they charge a surcharge to arrange for maintenance and repair to the property and more. Remember with any contract you want everything spelled out so that no surprises appear later at the most unfortunate times.
When you are doing rentals, it is important to insist upon the use of a lease. This protects both the renter and yourself in the event of a disagreement, you need to make sure that the lease is well written, and complies with all laws and ordinances in your local area. An attorney can look over your lease to ensure it is within the letter of the law, and suggest any changes to improve upon it.
You need to first and foremost ensure the lease specifies the amount that the rent will be, the late fees if rent is not paid on time, and the location where the rent shall be paid. This is never optional in a lease. Some property owners lean towards a discount rent system, where if the rent is paid by a certain day of the month they offer a discount off the rent, which is the actual amount they want. However, if it is late, it is usually $50 or more higher. This avoids any restrictions that may exist locally for late fees for renters. Other property owners prefer to keep things simple and charge one flat rate for the rent, with no discounts. The choice is up to you and the method in which you choose to operate.
One little known secret to renters is that renting weekly, or even bi-weekly is very expensive. This costs as much as one months rent extra each year. If you choose to accept payments this way, you are opening yourself up to a bit of nuisance with more frequent payments, however the extra income may well be worth it. Who wouldn’t like to get an extra month’s rent paid for no extra time? I certainly would not mind this method and it is perfectly legal. Most tenants do not realize just how expensive weekly and bi-weekly renting is compared to doing monthly rentals. This is an easy and simple way to increase the revenue that your property is generating.
Security deposits are also very important to determine. This is the money that is used to repair the property if the tenant damages it. This is not to cover unpaid rent, or the hassles associated with a particular tenant. This amount should never be the same as the monthly rent; otherwise, the tenant will think it is applicable towards unpaid rent.
It is always advisable to maintain a good relationship with your good tenants, remember vacancies cost you money, and quite often additional money having to prepare the apartment or residence to rent again. It is often cheaper to resolve any tenant complaints rather than them become upset and move out. Weight the two options to decide which is best in your particular case. Unreasonable requests are just that, unreasonable, however if a tenant is requesting permission to paint their walls a different color, as long as they agree to repaint it the same color it was when they moved in before they move out, it shouldn’t be a major cause for conflict.
This has just scratched the management surface. Every day you manage your properties you will likely experience something new. You will learn so much that cannot be taught in an article or even a classroom by doing the hands on learning experience. In the next installment, we will discuss mobile homes for the investor. Keep growing your investment business and keep sharpening your management skills.
For a successful real estate business that is involving rental property, you must make a decision as to whether you will manage the property yourself or hire a property management company to handle it for you. If you select a property management company you need to make sure it is financially acceptable, if you choose to do it yourself you need to make sure you have the time and energy to put into managing it.
If you elect to use a property management company you must ensure that all details are outlined in a contract, for example, what their fees are, hours of operation, what issues they will handle. Will the management fill vacancies for the normal monthly fee, or will there be additional fees associated with this, will they handle any eviction processes that present themselves, will they charge a surcharge to arrange for maintenance and repair to the property and more. Remember with any contract you want everything spelled out so that no surprises appear later at the most unfortunate times.
When you are doing rentals, it is important to insist upon the use of a lease. This protects both the renter and yourself in the event of a disagreement, you need to make sure that the lease is well written, and complies with all laws and ordinances in your local area. An attorney can look over your lease to ensure it is within the letter of the law, and suggest any changes to improve upon it.
You need to first and foremost ensure the lease specifies the amount that the rent will be, the late fees if rent is not paid on time, and the location where the rent shall be paid. This is never optional in a lease. Some property owners lean towards a discount rent system, where if the rent is paid by a certain day of the month they offer a discount off the rent, which is the actual amount they want. However, if it is late, it is usually $50 or more higher. This avoids any restrictions that may exist locally for late fees for renters. Other property owners prefer to keep things simple and charge one flat rate for the rent, with no discounts. The choice is up to you and the method in which you choose to operate.
One little known secret to renters is that renting weekly, or even bi-weekly is very expensive. This costs as much as one months rent extra each year. If you choose to accept payments this way, you are opening yourself up to a bit of nuisance with more frequent payments, however the extra income may well be worth it. Who wouldn’t like to get an extra month’s rent paid for no extra time? I certainly would not mind this method and it is perfectly legal. Most tenants do not realize just how expensive weekly and bi-weekly renting is compared to doing monthly rentals. This is an easy and simple way to increase the revenue that your property is generating.
Security deposits are also very important to determine. This is the money that is used to repair the property if the tenant damages it. This is not to cover unpaid rent, or the hassles associated with a particular tenant. This amount should never be the same as the monthly rent; otherwise, the tenant will think it is applicable towards unpaid rent.
It is always advisable to maintain a good relationship with your good tenants, remember vacancies cost you money, and quite often additional money having to prepare the apartment or residence to rent again. It is often cheaper to resolve any tenant complaints rather than them become upset and move out. Weight the two options to decide which is best in your particular case. Unreasonable requests are just that, unreasonable, however if a tenant is requesting permission to paint their walls a different color, as long as they agree to repaint it the same color it was when they moved in before they move out, it shouldn’t be a major cause for conflict.
This has just scratched the management surface. Every day you manage your properties you will likely experience something new. You will learn so much that cannot be taught in an article or even a classroom by doing the hands on learning experience. In the next installment, we will discuss mobile homes for the investor. Keep growing your investment business and keep sharpening your management skills.
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