With the value of real estate rising fast, this is a great time to be a property owner. Still, it’s a big leap for beginners who aren’t in the business.
That’s why we’ll walk you through some of the most common things fast growing rental property portfolio builders think about and do in their day’s work.
Finding deals is a critical activity real estate investors are always doing for those who are building a large portfolio.
Financing for real estate deals is a make-or-break aspect of the business. Housing is the most expensive investment most people make in their lives, so going into the business of purchasing multiple houses, multiunit houses, and apartment buildings puts real estate investors in the business of financing.
Investors constantly work to secure funding. They build relationships with passive investors, banks, hard money lenders, and other forms of financing for their deals. Securing money is definitely top-of-mind for active real estate investors who are building a sizable portfolio.
Once a real estate investor has negotiated and secured a good property, they will work to get that property live-in ready.
After this is done, they will market their property to get high-quality tenants in their unit.
Marketing in the digital age involves placing ads on popular sites like Zillow.com, and in local magazines and newspapers.
The advertisements they create are truthful and efficient property descriptions, but focus on promoting the positive features of properties. For instance, "pool and deck in the backyard” or “new lighting throughout.”
Details such as bathrooms and bedrooms the property has, the security deposit amount in the monthly rent of the rental property. They will usually list the physical address of their properties when they’re okay with people driving by to view the property.
Dealing with tenants is a more significant relational reality in rental property management than in most other types of business relationships. Tenants are literally living in a property owner’s business asset. So then, selecting, managing, and working with tenants is a significant aspect of the rental property lifecycle.
A dream tenant is one who is:
- able and willing to pay rent on time and in full
- able and willing to follow the terms of the rental or lease agreement
- a law-abiding citizen who will not conduct illegal activities in your rental property
You should create a form for tenants to fill out that includes the following applicant information:
- Contact information – phone number and address
- Social Security number
- Length of time it at present address
- Contact information for present and past landlords
- Contact information for employer
- Present employment income and other income sources
This is where the rubber meets the road and property owners sink or swim. The lease contract they sign with the tenant needs to present the rent amount and time it should be paid clearly. It should also spell out how rent will be collected as well as share procedures for late payments. Investors can charge late payments for unpaid rent, for bounced checks, and for insufficient funds on credit cards. However, it is important that these penalty fees are reasonable.
Landlords have a legal aspect to their business. They must be sure that they are compliant with the local, state, and federal laws. These stipulate that property owners must provide habitable and safe housing for tenants.
Some of the areas investors must specifically address include:
- Housing and building code compliance
- Repairing and maintaining a well functioning and habitable property
- Maintain proper functioning of housing systems, which include plumbing, HVAC, electrical, sanitary, appliances, and other systems
- Provide safe conditions for all common areas which include parking spaces, always, stairs, and more
There are other important rules to follow as a landlord, which can be found in local and state statutes.
Certainly, there is a lot involved in managing property and the daily work of a rental property owner can be high, detailed, and varied. That’s why smart rental property investors partner with specialists to manage their properties for them!
Why not hire Utz Property Management to take care of the job for you?
You can start by scheduling your PROPERTY PROFITS STRATEGY SESSION.
In This FREE 1 Hour Session, an expert real estate investment coach from our team will work personally with you to...
- Examine your current real estate investment portfolio/plans to see what’s working and what’s hurting. Discover where you’re making money and losing it.
- Search for the diamonds in your backyard, the low-hanging profit opportunities that can be made with minor tweaks.
- Diagnose the biggest roadblock to scaling your business fast and profitably.
- Present the best path for tweaking your investment game-plan so you can build wealth faster, with more predictability and stability.