Real Estate Management Guide
Real estate is one of the most profitable investment spheres. House prices are rising every year. Affording real estate has never been harder, let alone managing it in a shark tank economy. We’ve laid out some advice for you to help you manage your estates.
A successful property business requires planning and strategy. Competition between real estate management companies escalate, so you shouldn’t neglect the steps required to run a real estate business.
This easy-to-digest guide for the entrepreneurially challenged, or if you’re just new in the market, will fill you in about everything from pricing, marketing, and intelligence to payment and cash flow management.
1. Improve Your Property
The first step in managing a RE property is buying it and then renovating.
When buying real estate, you need to inspect its condition. You shouldn’t want to rent or sell your property in poor condition because it will bring you bad reviews. So fix anything that needs repair and don’t wait until it’s too late!
2. Determine Price and Expectations
Once you are ready to rent or sell a property, there is one more important step to take before you can start looking for leads. It’s time to decide on prices and expectations with market research to find out the average rental or sale price in the area. As well as the number of properties rented or sold in the area. These are the questions you need to ask yourself:
- What is the average income in the area?
- What is the average family size?
- What is the average rental and sale price?
- Are there any special benefits in your area – like easy transport access, easy highway access, parking lots – that you can charge more for?
Once you figure out the average market rental or sale price, you can correctly determine yours, identifying the requirements that you have for potential tenants or buyers.
Consider the common features of tenants or buyers, but remember not to discriminate against them:
- Minimum income
- To smoke or not to smoke?
- Employment information and history
- Credit rating requirements
- Residence history (if necessary)
- Number of links (if necessary)
3. Find Tenants/Buyers
How can you be successful in real estate management without tenants?! This is painfully obvious, but we have to address it nonetheless.
Marketing Plans
Advertise your property across multiple platforms. You can ask the seller to run promotions directly in various public places, such as shopping malls, or hang up a billboard. But for lower (or even zero) marketing costs, try online marketing.
You can advertise on search engines, social media platforms or various real estate search sites. Combine offline and online marketing efforts to reach more leads.
Be sure to include in your agreement information about rental conditions, ordering procedures, maintenance details, and house rules. Additionally, be sure to report the pledge when concluding the contract.
4. Take Care of Your Property
Maintenance needs to be done regularly, especially for a rental property. There are two benefits to having your property checked regularly. Firstly, it will help you maintain good communication with the tenants. They will be more comfortable because you will visit them regularly to check the condition of the place where they live.
Secondly, regular visits can also save money, because damage can be prevented sooner. If you only inspect your property once a year, the chances of damage will be higher.
Scheduled Maintenance
You need to prepare a few important things, such as contacting technicians and ongoing maintenance costs. Use site management software to speed up the maintenance process. This automated system helps you record and monitor the health of your property, schedule maintenance, keep a maintenance log, and more.
5. Collecting Payments
One of your must-haves as a property owner is collecting rent in full or in instalments. Each homeowner has a different collection method. Some still receive cheques mailed to them; others use electronic payment methods, like standing order, that are simpler, faster and more efficient.
Most property owners still deal with late payments or miscalculations. This may be avoided by using special software programs to keep track.
Property management software helps to automate the calculation of instalments, so you don’t have to do it manually to get the accurate calculations. It also allows you to set up alerts for invoices to help you receive payments on time, for each tenant.
If a late payment persists, you must act by collecting a late payment penalty or, resorting to eviction. You can use the lease as a reference if you are going to go to court.
6. Dealing with a Breach of Contract
The issue we are looking at is a breach of a contract limiting eviction.
It is very important that you file an eviction application and go through the entire legal process. Although the time it takes to check out can be long, you must notify the tenant and apply for eviction.
Do not try to evict the tenant yourself without following the rules. Forced eviction of a resident (by changing locks or other personal actions) can be considered a criminal act.
Follow basic eviction steps:
- Give formal notice to the tenant telling how long it should take to fix the problem that violates their lease.
2. Apply for eviction in court if the terms of your notice are not met.
3. Do not accept any payments when you file an eviction application, as this could void the eviction process.
4. Check local laws, so you don’t break any rules. Hire a lawyer if you find it difficult to understand local laws.
5. Wait for a court decision before proceeding with an eviction.
7. Cash Flow Management
The cash flow should always be under control. You should know your incoming and outgoing cash. Make sure you have separate personal and corporate bank accounts for better financial management. Make a detailed list of recurring expenses such as maintenance costs, taxes, salaries, marketing expenses, and so on. Don’t let your expenses outweigh your income.
Conclusion
We hope, after reading these 7 tips on better real estate management, will help you in the years to come. The advice is practical and touches on the most common problems of RE management. Good luck!