supper.
Whether you’re contemplating owning residential rental real estate, looking to fine-tune your proven landlord secrets, or facing financial ruin at the hands of the Tenant from Hell, this book offers chapter after chapter of solid rental property management advice, for everyone from new rental property owners who have a single rental home or condo to owners of hundreds of units. The methods I present are effective for all sizes and types of residential rental properties. The book explains how to attract qualified prospects; select and screen tenants; maintain and increase the rental rate; and handle security deposits, rental contracts, broken water pipes, late rents, tenants who overstay (and don’t pay). Find the topic you want to know more about, and start reading right there.
Property Management Kit For Dummies, 4th Edition, helps you protect your investment and maintain your sense of humor, as well as your sanity, as you deal with one of the most unpredictable professions: property management. Consider this book to be your property management bible, written just for you.
Part 1
So You Want to Be a Landlord?
IN THIS PART …
Figure out whether you have what it takes to manage residential rental property.
Discover what you need to know if you’re taking over ownership of a residential rental property.
Work with the current tenants, and inform them of your policies and procedures.
Chapter 1
Residential Property Management 101
IN THIS CHAPTER
The key to long-term success and wealth-building through real estate ownership lies in the foundation you acquire as a hands-on property manager. Some people start by managing rental properties owned by someone else and gain a great deal of experience that they can use for their portfolio. Other people learn from trial and error — but that can be expensive.
There are many positive reasons for becoming a rental property owner or manager and just as many ways of doing so. Perhaps you’ve saved up the down payment to purchase your first small rental unit and hope to see your investment grow over the years as a nice retirement nest egg or a supplement to your current income. Maybe you want to invest in a medium-size apartment building and build some equity as well as rental income to supplement or replace your current income. Perhaps you’ve inherited Aunt Gertrude’s run-down cottage and need to find a good tenant who’ll care for it and pay the rent on time. Maybe you recently closed on your new primary residence, only to find that selling your existing home isn’t as easy as the real estate agent promised. Or perhaps you’ve had to move across the country to find a suitable job but want to return to your home in the future to avoid getting priced out of that market years later when you return.
Whether you plan to become a full- or part-time property manager, you need to know what you’re doing — practically, legally, and financially. This chapter serves as a jumping-off point into the rental property world. Here, you can find useful info, tips, and checklists suitable for novice or seasoned rental property managers. So get ready for some pragmatic and realistic sage advice from the tenant trenches to help you handle situations when they arise!
Understanding Property Management
Rental property owners provide consumers a product known as shelter. Property managers, who either work for themselves or as the agents for an unrelated third-party owner, handle the day-to-day aspects of making sure that the provided shelter meets their customers’ needs. Put another way, as either a property manager or property owner, your obligation is to provide your customers a decent place to live in exchange for the payment of rent. Although property management doesn’t seem very complex, you can avoid the many mistakes unprepared property managers make by knowing what you’re getting into.
The following sections give you a quick overview of the pros and cons of property management. Chapter 2 provides more in-depth analysis of these advantages and disadvantages for a residential rental property owner to help you determine whether self-management of your rental property is the right choice for you.
Considering the benefits
Property management can be a rewarding and enjoyable venture. I can’t imagine my life without some aspect of property management in it. (Why else would I have written this book, right?) Following are some of the reasons why I get such a kick out of this business:
Experience with real estate investment: As you manage residential rental property, you have the opportunity to observe and begin to understand investing cycles, which is an essential skill for becoming a successful real estate investor. Some real estate investors succeed without ever being hands-on property managers, of course, because they hire others to handle the task for them. But I believe residential rental property owners should gain that real estate investment expertise by actively working as property managers for several years, either for themselves or others.
Interaction with different people: If you’re a people person, you’ll find that property management is a great opportunity to meet all types of people. Not everyone you’ll encounter is someone you’ll want to make your close friend, but you’ll certainly have the chance to work with a smorgasbord of personalities. I could write a book just about the people I have met over the past 40 years!
Skill development: Property management requires diverse skills because you must handle so many different tasks (such as marketing, advertising, leasing, screening, and maintenance). But it also allows you to grow those skills beyond the basics through patience and passion. You might begin by advertising your rental unit in a basic way with an onsite sign and move to developing a technologically advanced online promotional campaign with 3D property tours available worldwide. Pay attention to how unrelated products are presented for sale, and apply those concepts to residential rental housing. Most of the best marketing ideas are already out there; you just need to adapt them to your rental property.
Variety: Personally, I enjoy the variety of tasks and challenges in property management. Sure, some aspects are repetitious. Rent is due every month, and all properties require ongoing care and maintenance. And some days can be exhausting. But for the most part, every day in property management is something new.
