TCI Guide to Property Management
As a real estate investor, you are faced with a number of different options when considering how to manage your properties. One of those options is whether or not you choose to manage your own properties. If you do choose to manage your own properties, take some advice from seasoned professionals that can help you avoid costly mistakes and save you time and money. The Corporate Investor Podcast had the pleasure of interviewing several individuals who were kind enough to share some of their tips on how to effectively manage properties on your own. Keep in mind, we are referring to residential properties. We would not encourage first time investors to attempt managing a large commercial property such as an apartment complex on their own. Unless you are a seasoned property manager with years of experience, you will want to look into hiring a 3rd party management company for those types of investments.
A major discouraging factor that a lot of investors face when deciding whether or not to manage their investment is time. Managing a property if done poorly can be very time consuming and costly. Investments that are managed well will require minimal man hours and practically run themselves. One of our guests this month shared some very useful tips for how to accomplish these goals.
Venkat (TCI 32 show guest) suggests fixing everything possible upfront, within reason. By doing this you are reducing the chance that something on the property malfunctions or breaks. The less things break, the less your tenants call you to fix them. The more efficient your property runs, the more time you have to build and effectively manage your portfolio. You may also want to consider implementing clauses in your lease discouraging tenants from calling you every day for non-emergency items. To give you an example of what we mean by this; Venkat has his tenants pay the first 40 dollars to fix the item(s) they are calling about. This discourages his tenants from calling every time a light bulb goes out in the bedroom. Of course, we are only referring to small ticket items, HVACs and major appliances would not fall under this clause as the landlord is responsible for these items. This tactic also encourages tenants to take better care of the property. Now that tenants share some portion of the responsibility to replace broken items, they will be more careful and treat the property as if it were their own.
Aside from lease clauses and fixing/replacing broken items upfront, you want to have the right team working with you. A few key team members that you want to have when managing your properties are a trusted HVAC company, plumber, electrician and handy man. These individuals can take care of the majority of your property issues. Having a good relationship with these professionals will also save you lots of time and money as they will be looking out for your best interest in order to gain repeat business.
While these are great tips for effectively managing your own properties, this will not guarantee a 100% streamlined process. We still advise working with a mentor as their experience and knowledge goes well beyond a few words on a page. Our goal is for you to begin thinking creatively and build a mindset that will lead you to much success.
The Corporate Investor Podcast
Listen in to interviews with successful real estate investors who began investing while working full-time in the corporate world. Hear their tips, success stories, failures, and their best piece of advice on how you can become a successful real estate investor. Click Here to Listen!
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