Renting out your property is a great way of generating some extra income without the need of investing too much time or effort. However, it does come with its own set of hassles. When you rent out your properties, you need to manage your properties properly and also deal with your tenants. While renting out to some tenants can be an absolute pleasure and you can often end up making some great friends, the same does not apply to all the tenants you would come across. Some tenants can be very difficult to deal with and you might even have to get after some to get your rent in time.
Managing your rental properties and dealing with your tenants can often become more complicated than it’s worth. However, if you take the right approach, the process can become quite straightforward. Read on to find out how you should deal with your tenants and manage your rental properties.
Choose The Right Real Estate Agent
Whether you are entering the real estate market to rent out properties as a full-time business or simply looking at developing a passive source of income, the first thing you need to do is invest in the right properties. This point obviously becomes redundant for those who are looking at simply renting out an existing property, but for those who are looking at investing in property with the intention of renting it out, consulting an experienced local realtor would be a good idea. This becomes even more important if you aim at benefiting from the rental business that focuses on tourists and vacationers. Local realtors can provide a lot of insight into what kind of properties vacationers seem to prefer and can provide a lot of information regarding the industry. Their assistance can prove to be very beneficial during the initial stages of setting up your business.
Fix An Annual Budget For Reinvestment
If you wish to repeatedly rent out your property for short-term periods or even for the long term, it is safe to assume that it would require frequent maintenance and remodeling. This would be required not just to keep your existing tenant happy and satisfied, but to also make the property enticing to a prospective tenant. A good approach is to set aside a percentage of your rental income specifically for this purpose. This allows you to reinvest in your property without losing track or control of your finances.
Don’t Settle For the First Tenant
It is important for you to properly screen your tenants. Establishing their financial ability to meet the monthly rent on time when signing the contract itself can save you a lot of trouble in the future. When signing an agreement with your tenant, you should discuss your policy on pets. It is common for a lot of buildings to ban pets, although there are always some exceptions, and if that is also the case with your apartment building, it is something that must be clearly mentioned to your tenant. On the other hand, if your apartment complex does allow pets, being open to tenants with pets can offer you quite an advantage. If the pet is well behaved and friendly, there isn’t much cause to worry. Renters with pets often find it quite difficult to find suitable apartments and are often willing to pay extra.
Consider Taking Professional Assistance
Hiring a professional property manager can significantly reduce the amount of effort you need to put into managing your rentals. In fact, it can even make the entire process autonomous, with little or no interference required from your end. The experienced rental managers at Faranesh point out that rental and property management companies can not only help ensure timely payment of rent but also ensure that your property does not sit vacant for too long. They also help prevent any damage from being inflicted on your property by the tenants and make sure that you receive the correct rent for your apartment. While the service does come at a cost, it pays for itself in the long run.
Enforce Timely Payments
Collection rent is probably your most important responsibility as a landlord, it is after all the very reason you are renting out your property. While there is no harm in providing your tenants some leeway in terms of the deadline to pay the rent, repeated defaulters must be discouraged. While there are various steps you can take to ensure this, the most straightforward way of doing this is to establish a penalty for repeated defaulters while providing the contract. This helps ensure that they are well aware of the penalty and agree to respect it. There are different ways to collect rent. You could collect your rent electronically or by cheque, however, collecting rent in the form of cash should be avoided.
Maintaining Accounts
Any revenue that you generate from renting out your properties is a form of income and as with any other source of income, tax has to be paid. Calculating your taxes, however, can become increasingly complicated. This is because there are various tax deductions that you need to take into consideration. To make sure that you save as much as is legally possible, it is important to keep a record of all your business expenses. These include maintenance, realtor cost, and even the amount paid to your property management company. While all this may seem alien and complicated to you, it would be something any accountant would be familiar with. That said, hiring an accountant to maintain your finances, especially taxes, would be a good idea. This is something even your property management company can help out with.
Properly managing your properties can help boost your profit. However, the process can become quite complicated, especially as the number of properties to manage and the number of tenants to deal with increases. Hiring a property management company can rid you of all your responsibilities and can make managing your property a walk in the park. However, even if you decide to go about it by yourself, take a few deep breaths and don’t get overwhelmed with the number of aspects to consider. With a little experience and by keeping these tips in mind you should be able to comfortably manage your rental properties and deal with your clients.