So….You want to be a Landlord?
How to Maximize Income Minimize Expenses
Owners of multi-family properties are serious about their investments.
Fiduciary responsibilities include all aspects of property management. This entrusted duty to the principal is the basis of sound property management
Being diligent in all of your accounting results in minimizing losses
- Set maximum rents capable of sustaining full occupancy
- Shop the competition
- Lower tenant turnover (which is expensive) through good customer relations
- Collect rents due, including late charges, application fees, and additional charges.
- Set security deposit amounts appropriately so damages caused by tenant misuse are covered.
- Deduct from security deposits any item not considered normal wear and tear i.e. damages, tenant abuse
- 48 hour turnover of vacant units
- Pursue collection through all legal means
Shopping your competition will give insight into what comparable properties in your area are renting for. You want to make sure rents are not too high or too low and are capable of maintaining the property as well as improving it over time. Lowering tenant turnover takes sound business practices. It is costly to turn a unit so taking care of your customers should be a high priority.
Know your property sounds simple enough, not really
- Inspect your property
- Keep detailed maintenance records
- Review all prices periodically i.e. insurance, taxes
- Compare costs i.e. supplies, a/c
- Solicit multiple bids for contracts
- Practice preventative maintenance i.e. a/c filters, service
- Expedite work orders to prevent further problems
- Maintain detailed move- in move-out inspections
- Minimize rent loss through timely collections
Implementing detailed accounting practices that give owners and managers a clear picture of property expenditures is essential.
High maintenance expenses can be indicators of deferred maintenance, abuse by tenants or neglect of frequent inspections. Expediting tenant work orders is not only a sound business practice, but it can prevent a small problem from being a major expense.