And I thought the stock market was crazy! Over last couple of years with the massive recession and the meltdown of the financial markets the stock market has been a wild roller coaster ride, so much so that I decided to take most of my investments out and transfer it into real estate investing.4
Yes, I know that it’s a terrible time to invest in real estate and in fact the real estate bubble is one of the main reasons why we are currently in such a massive recession here still in 2010. But my thinking was that prices have dropped so dramatically in the real estate market that now is probably the best time to buy when everybody else is panicking and selling.
One thing that I wasn’t ready for was the craziness involved in managing rental properties which, to tell you the truth, can be even more insane then the wild stock market roller coaster! Luckily I’ve come up with a few ways to make managing rental properties a little bit easier and I thought that I would discuss them with you today in this article so that hopefully you don’t have to go through the same crazy things that I’ve gone through!
So basically there are several things that you need to have set up in place in order to make managing your rental properties run as smoothly as possible and I’m going to discuss several of those things today.
The first thing you need to have in place is a solid repair and collections policy. You should use a move in and move out condition form that will allow you to record what your unit looks like before and after a tenant has lived there. This should protect you against property damages and things like that.
Not only does it help you but it also helps the tenant because they will also fill out these forms when they move in which will allow them to note any damage that is in the apartment that they are not responsible for. I’m talking about things like broken mirrors or stained carpets or peeling paint or things like that. You can then use this same form when tenant moves out to compare and contrast the current condition of the apartment.
I also mentioned a collections policy which you should be very upfront about with all of your new tenants. This policy will explain what happens if a tenant is late on rent. It will spell out the different fees that are involved and also lay out the process for eviction and state when that will happen.
Another thing to have set up in advance is a good record keeping system. This will include things like operating income as well as expenses that will relate to every specific property that you own. It will also keep track of any maintenance as well as repairs and even employee activity and tenant information. If you have a small operation with only a few rental units then you can get by with just a notebook or a spreadsheet program but for larger operations you may have to purchase special accounting software that will manage all this for you.
Unfortunately we don’t have much time to go into any more tips but these few that I’ve given you will certainly put you on the right track and ease some of the burdens and some of the headaches that go along with managing real estate investments.
By John Barney