Summary: In this article, learn 12 property management tips for landlords who self-manage their properties. Note that if you choose to buy through teams affiliated with RealWealth, your property management will already be in place and you won’t have to worry about any of these tips. Although, they may still be good to know if you’ve hired a property management company, so you can keep your property manager accountable.
As the housing market continues to present opportunities and challenges, it’s more important than ever for landlords and property managers to keep their properties in tip-top shape.
Effective property management can help you achieve greater income stability, reduce downtime and vacancy rates, and increase the value of your property.
Although most industry models show that the next several years could be profitable for landlords and property managers, some warning signs have emerged. Much of the rosy outlook is rooted in the ongoing housing crunch. This housing shortage helps boost the industry’s prospects, but it is also fueling a surge in costs and other financial turmoil.
Efficiency is going to be one of the greatest challenges for landlords. Labor costs are increasing, and labor shortages are hitting many in the pocketbook. In this article, you’ll learn some valuable property management tips for improving the profitability and efficiency of your rental properties in 2023.
2023 Property Management Tips for Landlords
1. Invest in rental property management software
If you’re a landlord, you know that property management is not an easy job.
Right now though, property management is going through an exciting period of change and innovation, with tech providers leading the way to upend the industry. A tech-enabled property management system allows landlords to manage their business from one place, making their lives easier and saving them time.
Rental property management software automates many tasks associated with renting out a property and keeps track of everything from leases and payments to accounting, communication and maintenance.
Invest in a tenant screening system
It’s no secret that finding quality tenants is tough. When you don’t have access to national databases and other resources that can help you rigorously evaluate rental applications, tenant screening can be difficult. You can streamline the process by investing in services like TransUnion SmartMove.
Invest in a solution for property accounting and rent collection
Online rent collection software enables tenants to pay rent from the comfort of their own homes by linking a bank account or debit card. It can set up recurring reminders and automated bank drafts, ensuring that your rent is paid on time.
An integrated system like Stessa or Appfolio for accounting and rent collection can help you avoid mistakes, manage your tasks, and keep complete documentation of all your rental properties. Their real-time reporting makes property accounting and financial management easier.
Invest in a solution to improve tenant communication and track maintenance tasks
In the age of digital convenience, tenants want a convenient, instantaneous, and hassle-free experience. They want to get things done quickly and painlessly. Back and forth emailing can be ineffective and inefficient in the long run. Not to mention that it is time-consuming, costly and frustrating. Fortunately, there are many software solutions out there that can streamline communication between you and your tenants.
A good example of this is an online tenant portal, where your tenants can directly log requests, fill and submit forms, and make payments.
2. Invest in professional certifications and training
The real estate industry is constantly changing and evolving. There are many trends that affect the industry, and it can be difficult for one person to keep track of all of them. There are advanced courses and training available that give you the chance to learn from the experiences of other professionals. We believe staying educated and current is one of the most important property management tips for success.
Attending conferences is an effective way to meet other investors, learn from their experiences, and get a sense of how your business measures up against others.
Get a Real Estate Broker Certification
In most states, a real estate broker’s license is required for some activities related to real estate, such as entering into lease agreements and listing properties.
3. Maintain effective and timely communication with tenants
Effective communication is essential to a great landlord-tenant relationship.
It can help you avoid misunderstandings, keep tenants happy and on top of their rent payments, and make your life easier.
Property Management Tips for effective communication with tenants
- Make sure they know where to reach you—and that they have a reliable way of getting in touch.
- Make sure they understand your expectations around maintaining the property (i.e., lawn care, snow removal).
- Discuss any changes in rules or policies before enacting them—this will help avoid confusion down the line and make sure everyone is on the same page about what’s expected from both parties.
Being an effective communicator is an essential part of being a successful property manager. It’s important to listen to your tenants and respond in a way that helps them feel heard and understood.
Active listening involves things like repeating or rephrasing what the other person has said, taking notes if needed, and expressing empathy. It’s also important to be clear and concise when communicating with tenants, as it is your job to ensure that they understand the information you’re giving them.
4. Offer attractive lease renewal terms for high-quality tenants
Tenant retention is a vital part of effective property management. Landlords who are able to retain reliable tenants can save money on advertising costs and time spent screening new applicants.
It is difficult to find good tenants, but it can be even more challenging to keep them. But here are some things you can do:
How to keep good tenants:
- Offer gifts to entice tenants to renew their leases. These can include gift cards, yard landscaping, a new garden hose, or energy-efficient light bulbs.
- When dealing with an excellent tenant, be prepared to negotiate a lease renewal or even consider a month-to-month lease.
- Make upgrades to the property. Upgrades like installing new porch lights, a fresh coat of paint or flooring replacement can make your property more attractive, comfortable and appealing to tenants.
- Give your best tenants a grace period for late rent or a one-time waiver of late fees.
5. Have a reliable tenant screening process
With the economy in a state of flux, you need to be particularly careful about who you choose as tenants.
Proper screening of prospective tenants can help landlords avoid renting to low-quality tenants, who might cause serious problems in the future. This is essential, which is why it’s high on our list of the top property management tips for landlords today.
A comprehensive tenant screening process will consider details such as a tenant’s monthly income, credit score, and job security to determine whether they will be reliable when it comes to paying rent each month.
Note: Landlords should screen tenants carefully, but also be aware of laws against rental discrimination. Landlords are not allowed to deny housing to someone based on race, color, national origin, religion, sex or disability. In some cities, this also includes a criminal record.
Choosing the right tenant screening tool
Tenant screening services provide landlords with information about prospective tenants. This information can help you determine whether a tenant would be a suitable fit for your property, and whether they have any criminal history or other issues that would make them less than ideal.
In order to choose the right tenant screening tool, you need to evaluate not only the speed but also the reliability of the data. Tenant screening tools are often updated quarterly and yearly, so make sure that you select a provider that provides timely updates with the most reliable data. The Fair Credit Reporting Act allows tenants to sue landlords if their applications are rejected due to inaccurate or illegally reported information.
Request for References
If you have doubts about a tenant’s ability to pay, or if they cannot provide the proper documentation, then consider asking for personal references. Co-workers, members of their church, or family friends can offer insight into how reliable a tenant will be.
6. Create a schedule for inspections and maintenance
It’s time to get your house in order. Creating a schedule for inspections and maintenance is incredibly important and one of the most important property management tips landlords should know.
While you may be tempted to just let things slide and ignore maintenance on your rental property, it’s not always a smart idea. Inspections can verify the condition of the rental and determine if there are any lease violations. For example, you may suspect your tenant is subletting without permission.
Inspections can also document damage and verify why you’re not returning a security deposit to a tenant.
However, it is not uncommon to hear about landlords who conduct excessive inspections that frustrate tenants or even violate laws. So it’s also crucial that you know your local laws. In California, for example, landlords are not permitted to conduct a general inspection without a reason.
Generally, in most states, landlords must give tenants a rental inspection notice before arriving at the property. This notice should include information about how long the process will take.
You can allow your tenants to request a time for an inspection. Allowing them to select their own appointment times makes it easier to schedule inspections and helps put tenants at ease.
7. Create reasonable house rules for tenants
House rules can be a hot topic for landlords, but they’re also a critical measure for creating a safe and secure living environment for tenants.House rules help clarify what your expectations are when it comes to behavior from your tenant, especially with regard to noise, overnight guests and pets. By presenting applicants with a clear list of house rules, you can eliminate a lot of confusion and gray areas.
You need to set the rules carefully. This is because if there is a rule in the agreement that is not in accordance with the law, you can face legal action from your tenant.
House rules should be included in the lease agreement and should serve a specific purpose for the property. For example, if you have had issues with loud parties in the past, then make sure this is reflected in your house rules so it’s clear that parties are not allowed on the property.
A reasonable accommodation is an exception to a rule, especially for tenants with disabilities. For example, if a tenant has a support animal, he or she may be allowed to have the animal on the property even if it is against house rules. In some states it is illegal to deny this type of accommodation.
Generally, aside from the exceptions, repeated violations of house rules can be grounds for lease termination and tenant eviction.
8. Stay on top of your accounting
When you own a property, you’re not just a homeowner—you’re also the landlord. And that means that when it comes time to pay your taxes, you have to keep track of all sorts of things like revenue and expenses. One of the best property management organization tips is to keep all income and expense records in one place.
That’s where property management bookkeeping software comes in handy! It can help you keep track of everything from ongoing maintenance costs at multiple properties to turnover rates in order to see how they affect your revenue stream. Your ability to create custom reports will also allow you to understand the big picture as well as all of its smaller pieces so that you can make wiser business decisions.
In addition, if you rent out multiple properties yourself, then opening separate bank accounts for each one is a must. Many states also require landlords and property managers to hold security deposits in separate escrow accounts so those funds are accessible when tenants move out.
9. Require renters insurance
Being a landlord is risky. You have to worry about everything from property damage to liability claims. That’s why it’s imperative to require that your tenants take out renters insurance.
Renters insurance covers things like an ambulance ride and medical bills in the rare case that a guest is injured while visiting your property. It can also cover liability claims – though these are uncommon, they can be quite expensive. In fact, liability claims are the second most expensive claim type, averaging $26,000 per claim.
Tenants who are willing to take out renters insurance demonstrate their dependability and commitment. They are more likely to make good on their lease or rental agreement than those who aren’t willing to go through the hassle of getting this kind of insurance policy.
10. Outsource tedious, repetitive tasks whenever possible.
When you’re a landlord, it’s easy to get bogged down by the small stuff. The most basic and common back office tasks can be outsourced to virtual assistants. These include scheduling, phone and email support, processing work orders, creating bills and invoices and reconciling bank accounts. A virtual assistant with a strong understanding of property management, excellent data entry skills, and an eye for detail can be an invaluable asset to a landlord.
If a prospective tenant does not respond to your email or phone call, your assistant can send a follow-up email or make a follow-up phone call.
One of the duties of property management is to forward maintenance requests from tenants to a maintenance expert. But what if your regular guy is on vacation, or if he can’t do the job? A virtual assistant can help you find another qualified maintenance worker in the area.
11. Set the right rents.
One of the most important property management tips is to set the right rent rate. If you want to be a successful landlord, this is a must. If your rental rate is too low, you won’t make enough money; if it’s too high, you’ll scare away potential tenants. In many areas, there are also restrictions on how much you can raise rent annually, so if the rate starts out low, you may have issues for years.
To determine what to charge for rent, look at market comps in your immediate area. Learn what other landlords are charging for similar properties and use this as a starting point.
You can also utilize online tools like Rentometer to get quick snapshots of properties in your rental’s neighborhood. These tools will give you an idea of what other landlords are asking for similar properties and help you put together an accurate rent estimate for your property.
12. Set goals and have a long-term strategy
Goal setting is a crucial part of any business, and it’s especially important for landlords.
If you’re a landlord or property manager, you probably have a lot of things on your plate: managing tenants, maintaining the building, keeping track of expenses and income, making sure the place looks pristine, etc. If you don’t set goals for yourself—and stick to them—you’ll easily get overwhelmed.
Setting goals helps you develop a long-term strategy and stay focused. They can be anything from “I want to have two new tenants this month” to “I want to increase my revenue by 15 percent this year.” And they can be anything from “I want to reduce my turnover rate by 5%” to “I want to buy three new properties next year.” The key is that they are specific and measurable so that you can track your progress against them.
Real estate investments are long-term plays that can help you build equity over time. If you want to grow your portfolio as a landlord, you’ll need to start early and make solid plans—and setting goals is one of the most significant parts of those plans. Learn more about the psychology of real estate investing.
While this article has shown you some property management tips and tricks for 2023, eventually, you may want to outsource property management to professionals. If you are trying to generate passive income from rental properties, it is smart to outsource the management of your properties to a property management company so you can focus on other things. A good property manager can give you peace of mind as a landlord or rental property investor. This article contains some tips on finding and hiring dependable property managers.