As your real estate career progresses and you begin adding more properties to your rental portfolio, your responsibilities begin to grow as well. Here are a few ideas than can help keep the fun and profit in and keep out the stress and anxiety.
Take Your Heart Off Your Sleeve and Put On Your Financial Hat.
Finding a “fixer upper” and fixing it up can be extremely satisfying to your soul. The reality shows make it look really enticing, fun and rewarding and all in 30 minutes! In reality, it takes lot more work, stress, planning and executing than what you see on tv. Not all repairs go as planned and not all necessary repairs are found in an inspection. Sometimes they pop up their ugly heads right when you are in the midst of your demolition process. Just be sure you don’t confuse your rental project with your “dream home”! You are looking for positive cash flow, not to be recognized on the front cover of an interior decorating magazine. You want to create a “dream home” effect for your renter, not you. Keep in mind who your target audience is. If they are used to laminate floors, you don’t need hardwoods to impress! Get the picture? You may need to choose a different wall color, fixture or appliance for your rental property than you would choose for your own home. Look at other homes in the area and keep yours at or just slightly above the level of your competition in order to keep your properties rented. You want to provide a clean, eye-catching home that is competitively priced to attract the largest pool of renters.
Keep Your Renters Happy
Having a happy renter is like money in the bank….literally! Not only will they take better care of your property, but they will also send you referrals to you if they know you have additional properties for rent. People like to live around their friends. The better you screen your tenants, the better results you will have. They will respect your property and your lease terms. It will also reduce the turnover within your portfolio. High turnover can be very expensive with repairs, lost income and lots of time invested in finding new tenants. A good way to keep renters happy is to be conservative on raising rents. Give them something in return for the increase like shampoo their carpets, or offer to repaint part of the house, add granite to their counters, etc. Sometimes if you know your renters well, find out what they would like to see done to the house and do it. Let them know that the rent will go up slightly for the upgrade, but most people understand this. People hate spending more money, but they enjoy paying for increased value!
Systemize Your Business
Having similar business practices, rules, regulations and contractors for each of your properties can save time, money and take down your stress level tremendously. Establishing a solid management style through good habits with your rent collection system, maintenance system, list of approved contractors, etc. will help reduce your stress and improve your customer satisfaction that will keep your renters happy for many years to come! Building relationships with your contractors, realtors, property manager, lenders, and renters will build trust over time. Remember, people like and buy from people they trust!
It’s Not If, But When, The Unexpected Will Happen – Are You Prepared?
Every rental property has its challenges and surprises. A good rule of thumb is to factor in additional maintenance costs into your rental expense budget. This way when the unexpected does happen, you are prepared to tackle it quickly. This impresses the renters and gives them more comfort that they made the right decision to rent your property over someone else’s! Taking several days or sometimes more to fix an AC system in July leaves a very memorable impression with your renter when it comes to rental renewal. If you don’t have the money in the budget to cover it, both you and your renter are in trouble!
Either You Are The Property Manager or You Hire A Property Manager. Either way, Proper Management is Necessary!
Your personal investment is at stake each time you rent out your property to a new tenant. The big decision is do you want the 3 am call repair a broken water pipe or do you want someone else to do it? Make sure you budget in for a property management company even if you are the property manager right now. Remember, your time is valuable too! When the time comes (and it will) that you get tired of the inconvenient calls for repairs, you already have the money in the budget to bring in a property manager to replace you! Remember, begin with the end in mind. If you plan on developing a large or small portfolio of homes to rent, remember why you got into real estate investing in the first place. Was it for the passive income and time? If so, then plan for it in every rental budget you create. Remember, if you plan properly, you reap profitably!
Secure a Trusted Lending Partner!
Building a long term trusted relationship with a lender is as important as vetting our a partner for your entity! It all starts with the first meeting when you discuss your vision and goals one on one. Axe Lending Group is interested in building that relationship with you and helping you achieve your real estate investing dreams. We provide long term financing up to 30 year amortization with 3, 5 or 10 year fixed rates. Need to get your equity out to reinvest and grow your rental portfolio? We can tailor a cash out refinance loan to help you free up the necessary capital for your next deal! We have competitive interest on medium term loans up to 36 months to take your fix and flip and turn it into a new rental property! Find out more at www.axelendinggroup.com We look forward to hearing from you!