Managing rental properties takes perseverance, hard work, and awareness of the risks involved in such an undertaking. It can also be rewarding and very profitable, of course. But those looking to manage commercial properties should do plenty of research and preparation before diving in.
Appropriate property insurance is the first step toward protecting the owner’s personal and business assets. In particular, your client must obtain rental property insurance to safeguard against potential liability and common risk exposures. With commercial lines, they can conduct their business securely, knowing that their assets are protected.
Apart from getting the correct type of insurance, your client will also have to learn the basics of managing rental properties. The proper approach depends on the specifics of the property itself and other circumstances. Even so, some common strategies should apply to most situations.
Six Steps for Managing Rental Properties
Here are the critical steps to managing a piece of rental property:
Charge Appropriate Rental Rates
Your client must determine an appropriate rental rate to attract qualified renters and ensure some profitability. Too high, and they risk turning away tenants. Too low, and they may not earn enough to make the venture financially viable.
Factors to remember when determining rates include median income in the area and the prices charged by the competition. Also, your client should remember amenities that add value to the property.
Market the Property
Marketing is integral to rental property management, but it can be tedious, costly, and time-consuming. Using rental listing and tenant screening services, many which are available online, can make marketing considerably easier.
These services simplify the creation of rental listings, syndicating these to rental listing services, and fielding leads from would-be tenants.
Perform Regular Repairs and Maintenance
Your client’s job continues even after the tenant moves in. They will also have to conduct regular property inspections and perform repairs and maintenance as needed. Tenants will expect the house or apartment to meet reasonable standards, so the property owner should work to ensure that it does.
Collect Rent and Enforce Lease Terms
Collecting rent should be done with the same regard as upholding any other aspect of the lease agreement. Landlords should charge late payment fees according to the contract’s terms. Otherwise, tenants will get into the habit of paying late. It could cause cash-flow problems for your client.
Evict Non-Paying Tenants
Tenants that fail to pay rent will have to face eviction. It’s an unpleasant task, but your client has no choice if they want to ensure the continued viability of the business. The lease terms should detail how many months of non-payment will warrant eviction.
Unfortunately, evictions can cost your client thousands of dollars in fees and enforcement costs. To avoid the hassle of missed payments, it might be best to set up an automatic payment system in which the total amount is automatically deducted from the tenant’s bank account every month.
Use an Accounting System
An accounting system will help simplify rental property management. It makes storing documents and receipts easier and creates financial reports. Basic spreadsheet software should suffice, but your client may want to consider using specialized software for tracking property investments and automating income and expenses.
Conclusion
As you can see, your client faces many challenges managing rental property, mainly if it is their first time embarking on such an undertaking. The good news is that the job does become easier over time. With persistence, perseverance, and some degree of adaptability, they will soon grow into their role as rental property managers.
About Snyder Specialty
Snyder Specialty, LLC is a New York-based underwriting facility that provides a range of property and liability solutions for personal and commercial lines. Specializing in coastal properties and hard-to-place risks, Snyder Specialty expands your current capabilities with proven solutions for complex risks. Find out more about the company’s range of services by calling (718) 362-8039
