Whether you’re a private landlord, property manager or letting agent, managing private rental properties can be very rewarding but also complicated if good practices are not undertaken. Everything from effective accounting, managing maintenance issues and ensuring you have the right tenants can make or break the success and yield of a particular property portfolio. This guide outlines the essential information you need and the most efficient steps to take to ensure your operation runs as smoothly as possible.
Managing the Tenancy
With private rental properties, a property manager needs to focus on three crucial pillars; tenants, property and finances. Finding a tenant can be fairly simple, but are they the right tenant? Good tenants will pay their rent consistently, respect the property and reduce the likelihood and amount of void periods. Bad tenants will impact the success of your operation and will cause you unnecessary trouble. Ensuring that the latter is avoided is crucial to which steps must be taken to effectively screen potential tenants. Useful areas to cover are:
- Their employment location and income
- Doing a credit and background check
- Having in-person or video call conversations with them
- Contacting their references and former landlords
Managing the Property
Equally as important as managing tenants, is managing the property/properties. As a property manager or landlord, you are the tenant’s first point of contact. Whilst the role can arguably become more ‘passive’ once a tenancy is underway, the responsibilities do not waiver. At some point in time, there will likely be a maintenance request in any degree of seriousness. Useful steps to prepare for this are:
- Having a list of reliable local contractors.
- Understanding whose responsibility a certain maintenance query is.
- Establishing a dedicated channel or process for maintenance requests.
- Noting and storing key information with regards to when certifications and documents expire.
- Regular visits to check appliances.
Whether you are an individual property owner or a property manager covering a vast portfolio, you must ensure that a particular property is in a safe and habitable condition. If it isn’t, issues can arise in maintaining a consistent stream of tenants which can severely impact your finances. Conducting frequent rental visits is a useful practice for property managers and owners alike. This way, you can regularly check if any issues are arising in a particular property and it arguably can make tenants more cautious about damages with an upcoming visit scheduled. Additionally, rental visits encourage an efficient stream of communication with all stakeholders, which can be crucial with regards to maintenance issues.
Managing the Finances
Furthermore, managing a property’s finances is a crucial pillar in a successful property management operation. A property manager/landlord will need to handle a complex amalgamation of accounting information and not doing this correctly can cause major problems. Additionally, minimising any possibility of rent arrears will contribute to the likelihood of a profitable stream of income, no matter the unit size. Useful points to consider are:
- Hiring an accountant to do your accounting to ensure you maximise deductions.
- Encouraging clear and consistent communication with every stakeholder to smoothen any hurdle presented in disputes or miscommunication.
Using technology for effective property management
The growth of property management software has signalled the desire for property managers to streamline how they manage their portfolios. A digital solution to property management helps property managers reduce costs, automate and streamline time-consuming processes and create more time for building customer relationships.
Finding the right tenants for your property is crucial. With powerful integrations for tenant referencing, credit checks and digital signatures, property management software streamlines the onboarding process and minimises the likelihood of disputes. Technology has allowed property managers to save valuable time and money by replacing inefficient manual processes with advanced automation.
By having bespoke apps for every stakeholder, property management software makes managing maintenance requests swift and efficient. Occupants can easily report issues via their own app, workorders can be passed onto contractors and tracked via the Contractor app and owners/managers can get a full overview of their portfolio with their respective apps. A flexible, centralised system means clear communication can be maintained and reduces any disputes arising.
Advanced automation allows managers to stay on top of rent payments and communicate efficiently with all stakeholders to ensure rent is consistently paid on time. With property management software, financial information can be instantly synchronised. This eliminates the possibility of errors caused by duplicate entries which ultimately saves a property manager time whilst forming the most comprehensive and accurate overview of financial status and performance. Reducing human error and improving the efficiency of financial management will allow your property management operation to flourish.