Generally hiring a property manager is the safest and easiest way to manage your investment however should you chose to self manage, there are a number of areas you need to take into consideration.
Deciding to self manage your property may be tempting especially as it can save you money, but it can also create a lot of headache especially if you have limited experience. It can take only one disruptive tenant to create legal and financial situations which most property managers can easily avoid.
A good property manager understands the latest laws and regulations to ensure that you are not vulnerable to any potential lawsuit. They also conduct regular property inspections to identify potential tenant and maintenance issues.
Property managers often have systems in place to find and screen prospective tenants. They also have access to data on the tenants past payment history, property maintenance and eviction records.
Before you purchase an investment property, it’s important to invest time to understand your potential rental returns. One of the best ways is to research other properties within the area to see how much they rent for. This will provide you with an idea on the rental market within your area.
If you set your rent too high then your property will sit on the market too long, which will impact your hip pocket.
Alternatively, if you set your rent too low then it will mean you could miss out on potential profits and attract undesirable tenants.A good property manager can help provide comparable properties and information and offer the best advice on the appropriate rent for your investment property.
At the first sign or report of any maintenance issues, it is the responsibility of the property owner to step in. If the property is managed by a professional property management company, then it is the responsibility of the manager to make the arrangements on behalf of the owner.
If your tenants are behind in paying their rent, it could lead to a costly recovery process and may affect your personal cash flow. You should keep a close eye on your tenants rent due dates and monitor that the payments have come through on time.
If your tenants fall into arrears then you may need to issue a breach notice of non-payment. It is important to be familiar with your local tenancy laws, since the number of days in rental arrears prior to a tenancy termination may vary state to state. Monitoring rental payments as they fall due and promptly issuing of notice to tenants generally resolves issues and avoids painful financial losses.
As we know, insurance helps protect investors from the risks associated with owning an investment property.
Landlord insurance covers property owners for malicious damage by tenants, accidental damage, legal liability for occurrences on the property that may cause death or bodily injury, and loss of rental income as a result of property damage or a tenant absconding.
Standard building and contents insurance policies usually don’t cover landlords for these risks. A smart investor understands an investment property is for the long term, so you should always think to protect your investment.