experience and lessons from my own real-life examples. Unlike many landlords and property managers, I believe that your tenants are your customers, not your enemies, and as such, you should treat them with respect. You may find investing in residential rental real estate to be a key piece of your overall investment strategy, but not everyone is cut out to be a property manager. I want to make sure you understand not only the basics of the rental housing business, but also some of the tricks that can make you glad you’re a real estate investor.
Although this book is overflowing with useful advice and information, it’s presented in a light, easy-to-access format. It explains how to wear many hats in the property management business: advertiser/promoter (in seeking tenants), host (in showing the property), handyman (in keeping up with and arranging for repairs), bookkeeper (in maintaining records), and even counselor (in dealing with tenants and their problems). Just as important, this book helps you maintain your sense of humor — and your sanity — as you deal with these challenges and more.
I wrote this book in essentially chronological order — from your first entry into the world of residential rental property ownership and the corresponding steps to prepare and promote your property to showing your rental and selecting the right tenants. As a result, reading the book cover to cover makes sense, but feel free to read the sections that are most relevant to you at any given time. Skip around and read about those areas that are giving you problems, and I’m confident that you’ll find some new solutions to try. You can also skip sidebars (text in gray-shaded boxes), but I think you'll enjoy these humorous anecdotes.
To make your life easier, I’ve included many of the forms you need to be successful in managing your rental — whether you’re just starting out with a single-family rental home or condo, you have a handful of rental units, or you possess a whole portfolio of rental properties. These forms are available online at www.wiley.com/go/propertymanagementkitfd4e. Feel free to print them out, have your local legal counsel review them, and start putting them to use.
Foolish Assumptions
When writing this book, I assumed that you’re likely reading this book because you’re one of the following:
An unintentional property owner — someone who, through a series of circumstances, suddenly and unexpectedly came upon an opportunity to own a residential property. Perhaps you inherited a house or condominium from a relative, and not wanting the property to sit idle, you decided to rent it out. Or maybe you transferred to a job in another city, and because you’ve been unable to sell your home, you’ve been forced to rent the property to help cover the mortgage and operating expenses. Many property owners find themselves in the rental housing business almost by accident, so if you count yourself in this group, you’re not alone.
One of those people who made a conscious decision to become a residential rental property owner. Perhaps, like many rental owners with a plan, you needed to buy a new, larger home and decided to keep your existing home as a rental property. Or maybe while you were looking to own your own place, you found a great duplex and decided to live in one unit and rent out the other. In a world where people seem to have more and more demands on their time, many aspects of rental housing ownership are very appealing, such as the capacity to supplement a retirement plan with additional income and the proven opportunity to build wealth. The key to achieving this success is finding a way to make money while still retaining control over your life.
Someone who already works in the rental housing industry. Maybe you’re just starting out, or maybe you’ve been in the field for some time. Either way, you want to find out more about your chosen profession. Good for you. The rental housing industry has so much variety that you’ll always be discovering new things and appreciating that every day is a new challenge. Yes, there is some repetition (you have to collect the rent every month), and you must be available at all hours of the day and night (for emergency calls), but unlike in many jobs, no two days ever seem to be the same. That’s what attracts so many professionals to the field of residential property management (and keeps them there).
When you’re an owner, residential real estate offers one of the best opportunities to develop a steady stream of residual income that you earn whether you’re sleeping, participating in your favorite leisure activity, enjoying your retirement, or relaxing on vacation. Whatever the circumstances, the bottom line is the same: You hope to generate sufficient income from the property to cover the debt service, pay for all operating expenses, and possibly provide some cash flow, along with tax benefits, appreciation, and equity buildup. The key to your success is knowing how to manage people and time. And this book has plenty to offer you on that front.
Icons Used in This Book
Scattered throughout the book are icons to guide you along your way and highlight some of the suggestions, solutions, and cautions of property management.
Beyond the Book
In addition to the forms included here in the book, you can go online to find many more forms that are going to make your life a lot easier as a residential rental property owner. Here's the address:
www.wiley.com/go/propertymanagementkitfd4e
I include a state-by-state reference to the state laws that pertain to residential rental housing. You'll also find a real estate glossary and resources that are available from the Institute of Real Estate Management (IREM), the National Apartment Association (NAA), and the National Association of Residential Property Managers (NARPM).
This book also has a helpful online cheat sheet with easy-to-access tips for property managers. Just go to Dummies.com and type “Property Management Kit For Dummies Cheat Sheet” in the search box.
Where to Go from Here
To get benefit from any great resource book, you must read it! This book is designed for experienced and seasoned landlords, as well as rookies who still think that all tenants are nice and prompt with
