Robert S. Griswold - Property Management Kit For Dummies

A maintenance professional: The skills required to manage your own rental properties are different from the skills you need to handle your own property maintenance. Most rental property owners find that using trusted and reasonably priced vendors, suppliers, and contractors is the best alternative. You may not have the requisite skills, equipment, or time to do the work properly and quickly, and you certainly will have to acquire the right parts and supplies. Although doing the work yourself may seem to be cost-effective, you’ll quickly lose any savings if the rental unit sits vacant for additional time. (See Chapter 17for help on finding the right maintenance personnel.) A client once hired me to manage a 100-unit rental property with nearly 30 vacant units. The rental market was pretty good, and we knew that we could rent the units after they’d been painted and cleaned, and after all minor maintenance items were addressed. The owner had always managed the property personally and used only in-house maintenance personnel for all work, including painting. The owner wanted to have the in-house maintenance person paint two units per week, but it would take nearly four months for all the units to be rent-ready. I was able to demonstrate that hiring an outside contractor to paint and having the in-house maintenance folks focus on only minor maintenance and cleaning would get all 30 units rent-ready in less than a month. Even though the painting contractor was an expense the owner didn’t want to incur, hiring the contractor was the better way to go, because we were able to rent the units quickly and more than cover the additional costs. Sometimes, the cheapest way isn’t the best way to solve a problem.

An accountant: Many owners don’t have the patience or discipline to keep the accurate accounting records that are so important at tax time, so they prefer to have a bookkeeper take care of the record-keeping and help them manage their bills. See Chapter 21for more information on accounting.

A legal expert: Some landlords may look forward to their day in court, but most find the experience to be unrewarding and problematic. Using a local attorney who specializes in landlord–tenant legal matters is an excellent idea when you have legal issues that may end up in court. A really good attorney will help you stay out of court, which should always be your goal.

A prescreened applicant source: Some owners use an online rental housing marketing source, a local rental locator service, or certain real estate brokers in your area who seem to have a steady stream of potential renters to provide prescreened rental applicants. Your level of delegation on this matter may very well depend on whether you own one or ten rental units.

The most important fact to remember is that no one will ever manage your rental property like you will. Accept that fact and then determine whether you’re cut out for property management. Remember that property management isn’t just a question of style. Ultimately, it comes down to sound, responsible practices applied equally for all your tenants.

You’re motivated more than anyone else to watch out for your real estate investments. Only you would work through the night painting your rental unit for the new tenant who’s arriving in the morning. Who else would spend a Hawaii vacation looking through the local newspaper classifieds or local rental ad books for creative ad ideas?

Be honest with yourself. Know your strengths and weaknesses as a property manager. You may find that you’re able to do the job but wind up with frazzled nerves and doubts. If you aren’t truly excited and challenged by handling your own property management tasks, you probably won’t have success managing your own property over the long run, and you may need to delegate (refer to “ Delegating management activities” earlier in this chapter).

One of the first steps in determining whether to manage your rental property on your own or delegate some or all of the duties is analyzing your skills and experience. Many successful property owners find that they’re better suited to deal-making than to problem-solving and endlessly interacting with people, so they leave day-to-day management to someone else.

This decision is a personal one, but you can make it more easily by thinking about some of the specifics of managing property. Property management requires basic skills, including marketing, management, accounting, and people skills. You don’t need a college degree or a lot of experience to get started, and you’re sure to pick up all kinds of ideas about how to do things better along the way.

Examine your own personality. Are you a people person? Serving as a landlord is a labor of love; you must love people, you must love working with your hands, and you must love solving problems. Most of all, you must be able to do all these things without getting much back in the way of appreciation.

Whether you’re confident that you have what it takes to be a good rental property manager or are still not sure, take stock of yourself and your abilities by answering the following questions. Interview yourself as though you were a job applicant. Ask yourself these tough questions, and (more important) answer them honestly:

Are you a people person who enjoys working with others?

Can you keep your emotions in check and out of your business decisions?

Are you a patient and reasonably tolerant person?

Do you have the temperament to handle problems and respond to complaints and service requests in a positive, rational manner?

Are you well organized in your daily routine?

Do you have strong time-management skills?

Are you computer-literate?

Are you meticulous about your paperwork?

Can you write well enough to communicate effectively?

Do you have basic accounting skills?

Do you have maintenance and repair abilities?

Are you willing to work and receive phone calls, emails, or texts on evenings and weekends?

Do you have sales skills? Can you be creative in attracting rental applicants?

Are you a good negotiator?

Are you willing to commit the time and effort required to determine the right rent for your rental unit?

Will you be persistent in collecting the rent?

Are you familiar with (or willing to find out) about the ever-changing laws that affect property management in your area?

Are you able and willing to visit your residential rental property regularly?

Are you willing to enforce all property rules and rental policies consistently and fairly?

Are you interested in finding out more about property management?

Are you willing to make the commitment to be your own property manager?

Ideally, you answered each question with “yes.” This assessment isn’t scientific, of course, but it does raise some important issues, particularly the level of commitment that you need to succeed as a residential rental property manager.

You need to be fair, firm, and friendly to all rental prospects and tenants. Treat everyone impartially, and remain patient and calm under stress. Be determined and unemotional in enforcing rent collection and your policies and rules. Maintain a positive attitude through it all. The job isn’t as simple as it seems, is it?

Even if you didn’t answer all the questions in this section with an enthusiastic “yes,” you may still make a good rental property manager if you’re prepared to be flexible and to learn from your property management experiences. Some of the best property managers graduated from the school of hard knocks.