Are you thinking about starting a side hustle that’ll not only help you generate some passive income but also won’t require a rigorous working schedule?
If so, then you must consider property management. It is a multifaceted and intricate undertaking that demands keen attention to detail, exceptional organizational skills, and the ability to navigate several market challenges.
In addition to this, several responsibilities are involved, from handling tenant concerns and maintenance requests to managing financial aspects like budgeting and rent collection.
Safe to say, you can’t just dive into property management without proper knowledge. You could lose a lot of money if you fail to understand and adhere to the rules, regulations, and processes regarding real estate.
Sounds complicated? Don’t worry; here are nine things you should know about property management.
Table of Contents
Get a grip on your responsibilities.
Knowing and understanding your responsibilities is one of the first and most critical aspects of becoming a property manager.
Your responsibilities include the following.
- Screening tenants
- Scheduling regular maintenance and checkups
- Collecting and setting rent
- Record keeping
- Supervising other employees
Apart from understanding the responsibilities of property management, you must also be aware of the terminologies and entities involved.
For example, you must be well-versed in navigating the intricate differences between HOAs and Property Management Companies. While HOAs primarily focus on maintaining common areas and enforcing community rules in housing developments, property management companies take a broader approach by overseeing individual rental properties or complexes.
Moreover, aspiring property managers can effectively fulfill their responsibilities by understanding the differences and nuances involved.
Prepare your documents.
Property management requirements include daily paperwork organization and being up-to-date with industry changes.
With a strong file management system, you can save time and handle things like audits, legal disputes, and fair housing claims quicker.
For example, you will be handling documents like:
- Rent payment records
- Move-out and move-in inspection paperwork
- Correspondence regarding approval
- Property maintenance notices
- Eviction paperwork
- Security deposits Lease violations
Delegate as required.
Delegations should be made as needed as you acquire more properties or put them up for rent. This means you allocate specific tasks to skilled and experienced individuals, allowing you to reflect and develop lucrative strategies down the line.
You can hire staff for any task you can’t handle alone. Some of the most crucial areas where skilled labor would be helpful are as follows.
Your business will flourish if you employ individuals who share your vision and are committed and honest.
Hire a lawyer.
Every state has regulations governing landlord-tenant relationships, mostly favoring one party over the other. Search for states favoring landlords and property managers because these will ultimately make going to court simpler for you if there is a problem or legal case regarding your property.
While every rental property management firm should be familiar with the landlord-tenant regulations in their state, it is advisable to consult a lawyer for additional assistance with matters like rental agreements.
Remember, the easiest way to safeguard yourself from potential tenant controversies is to hire a legal expert to draft the rental agreement for you or examine the lease you made.
Invest in Marketing.
Like any other business, property management also needs a proper marketing plan. As a property management firm, you can branch out by luring in independent property managers.
But, if you are a property manager, you can grow your operations further by attracting property owners keen on renting their property. Why? Because property management businesses are used by people who wish to profit from their real estate to handle the tasks they don’t want to undertake.
Finding lucrative leads isn’t tricky if your marketing strategy is on point and targeted toward the right audience and properties.
Registration and Insurance
Whether you’re a real estate agent, a property manager, or a property management business owner, you must be licensed to operate in your state.
Most states in the U.S. mandate that property managers obtain relevant licenses, maintain E&O, and have liability insurance. Obtain copies of all policies to discuss with your attorney if there is a case regarding your property.
Once you have established a profitable property management company, you will rely on devices (like cameras and computers) that run software with features like surveillance, expenditure calculations, and online reservations.
Using dedicated software helps streamline daily tasks while keeping you updated regarding every aspect of your business. In other words, any successful real estate company needs organizational software to save time and effort.
You’re going to experience a lot of things as a rental property manager that will aggravate you. You could face instances where your equipment can malfunction, tenants will be rude, or have extensive payment issues.
But this is where you must remain optimistic. If you have payment issues with tenants, speak to your lawyer. If your equipment malfunctions, it can be fixed if you have I.T. staff on-site. Whatever the case, you must maintain composure and handle the situation professionally.
Stay Up to Date
The real estate industry is never static, so staying updated on the latest rules, regulations, and advancements is critical. But that’s not all; you must also keep your eyes peeled for the competition. Be vigilant regarding their strategies when devising yours to grow your network and attract lucrative leads.
No doubt, property management is a competitive and challenging industry – but it’s a very lucrative endeavor if you understand the ins and outs of it.
By implementing the tips and strategies mentioned in this article, you can navigate the industry’s challenges and create profitable income streams.
Lastly, remember that property management hinges on being organized, proactive, and knowledgeable. So, stay up to date with the local regulations and laws about the field, and maintain open lines of communication with everyone involved. Soon, you’ll flourish.