Managing Rental Properties

Oct 28, 2011 by Buy Rental Property    No Comments    Posted under: Rental property management

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If you plan to become to start managing rental properties there are a few important things you need to know before you embark upon this life changing, money making journey. One of the first things you should do is to find out what type of homes are in the highest demand in the area.

• How to become a landlord with investment home rentals
• Talk to rental agents. An agent who handles a large number of rentals can tell you what type of full-time or vacation homes renters are looking for.
• Read newspaper classifieds to determine which types of properties seem to be most popular, and how much they are renting for during the different seasons.If the area attracts a lot of senior citizens, one-level living may be the best choice, or at least a house with the main living quarters on the first floor. Avoid homes where renters must climb stairs to reach the entrance.
• Look for a property within a reasonable distance of shopping and area attractions. Before buying investment homes in a development, make sure the restrictive covenants allow rentals.
• Look at the surrounding neighborhoods and decide what is important to you. Are you looking for a good school district? An area with a lot of entertainment? Or are you looking to manage a rental property that for college aged students? You need to be specific in what you are looking for and know who you are targeting to rent your property.
• Talk to an accountant to verify that the income you can realistically expect to receive is appropriate for the purchase price of investment properties and the projected maintenance fees.

Turning investment properties into a business:

Property management companies come in two types – those that manage the property and those that rent and manage the property. Management services: hire individuals to do repairs, property key disbursement and retrieval, make phone service available 24 hours a day for problems that arise and are responsible for the general inspection of the property.Rental and management services: include all of the above, as well as advertising and finding renters for the property and handling rental payments

Analyze the Rental Property:

Most advocates of the cash flow investment concept will tell you that you must generate a good monthly cash flow from your investment. This means that the amount of money you keep in your bank account each month from the rental after deducting expenses for taxes and mortgage installment payments must be substantial.

There are those who love to purchase property based on impulse and feel for the property. This approach may not be wrong in itself, but should always be done after you do your maths and rental cash flow calculations. Remember to take into account the downside of the rental yield in a bad year especially if you are purchasing this property in a good year. Managing a rental property can be very lucrative when done right – so take your time and figure out what is important to you and research your neighborhoods and rental property thoroughly before you ever purchase them. If you go into a rental property prepared – you will not only be managing property, but soon be managing the increase cash flow that you can receive from this business. 

Related posts:

1. How I Use Finance to Evaluate Buying Rental Properties

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