The 5 Pillars of Successful Rental Property Management

If you were to talk to most landlords about managing rental properties, there are 5 things that would always come up.

These are known as the pillars of managing a rental property and are applicable everywhere, no matter where you are in the world. If you are able to understand each pillar and how it can benefit you, then you will go a long way toward becoming a successful landlord.

This article will explore these pillars in more detail.

mortgage

It is impossible to ignore this pillar. Unless you are already a multi-millionaire many times over and can pay cash, you will have a mortgage on your rental property. As a result, the amount of money you return to the bank will depend on the interest rate. You must be sure that you will be able to deal with a variety of interest rate levels before choosing to invest in a property. Of course, there is always the risk of other things going wrong, which could cause your default. You can never predict the events in life. However, you should also do everything you can to minimize risk by using what you know.

Maintenance

You never know if you are going to have a good or bad tenant. Either way, tenants generally do not treat a rental property like their own home. There is always a level of negligence that takes place. You must be prepared to cover any costs that result from such negligence. In addition, repairs will also need to be made as a direct result of the aging of the house. You can be sure that the tenant will point out things that need fixing. It is in your interest to keep the property in good repair, as an unhappy tenant will only mean they leave and this can be detrimental to your cash flow.

Sure

You never know what can happen at your rental property. Depending on where you live, you may be in an area prone to extreme weather conditions like hurricanes and monsoons, or freak events like earthquakes. There may also be a fire on your property. Also, your tenant may have a serious accident or even die, you never know. The only thing you can do is get comprehensive insurance on your property. This is important for successful rental property management.

property taxes

Do not forget to pay them every year, otherwise you will have to deal with the government authorities. It is certainly more convenient to search for more rental properties instead of dealing with unpaid taxes.

Occupancy rate

Last but not least, the occupancy rate is vital for a profitable rental property. If your property is vacant most of the time, you will almost certainly have a cash flow problem that could lead to default. To attract more tenants, you may want to do a couple of things:

– lower the rent
– make improvements to the property

Either way, the market may sometimes not be in your favor. Sometimes there is a surplus of properties on the rental market, while at other times there is a shortage. All you can do is make sure you are equipped to deal with both situations.

By following the 5 Pillars of Successful Rental Property Management outlined above, you’ll be well on your way to becoming a successful landlord.

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