7 Steps to Success for New Property Managers

By Kaitlin Hurtado on December 25, 2018

There’s definitely a learning curve when you are starting a new job – there are new tasks to pick up, a set of skills to adopt or improve, and typically, a system that you need to get used to. The same could be said for new property managers. There are plenty of things to be done, and you definitely do not want to start out on the wrong step with missing documents or a tenant scenario gone wrong.

If you are a first-time property manager, here is a quick start-up guide to help you begin your property manager endeavors with fewer troubles:

apartment building

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Keep your rental property as a legal business

One of the larger adventures of being a landlord or property manager is that it does not necessarily have to be your primary or only job. With that being said, you still need to take it just as seriously as another job you are employed at. Treat the rental property as a business – be professional in your transactions and daily tasks with a business-oriented mind.

Make sure to get to know laws – federal, state, and local – prior to beginning your property manager endeavors. You definitely do not want to let the “new” landlord title get to you by slipping up and not complying with a law, regardless of the level. Having your rental property and business follow laws will help tenants and others take the rental property more seriously, and keep you and your rental properties from possible legal problems. The laws include factors that you may not be considering upfront, like discrimination rules that pertain to choosing your rental property’s tenants.

Similar to why you would get insurance for your health or your car, you will want to buy landlord insurance to protect yourself from accidents or liability claims. These can be anywhere from broken pipes to on-site crimes like theft. With landlord insurance, you can be protected from dealing with the loss all by yourself, potentially saving you thousands of dollars if a tenant were to sue you in an unfortunate situation.

Set your rental price 

While you may think that setting a “high” price is your best option because it means you will be getting more profit from the space, it might be costing you potential tenants and long-term profit when people are unable to meet the price you are asking for. Instead, do some research for your local market in order to learn what they typical rent price of properties similar to yours in the same area. By doing this, you are going to stay competitive within the local market while also being realistic.

Before coming up with a final rent place, put your finances into consideration. You still will want to be making a profit from your rental property, so you should compare your rental income to your rental expenses. Rental expenses will consist of fixed and estimated expenses: mortgage payments, insurances fees, HOA fees, property taxes, maintenance work, and utilities. Comparing rental income to rental expenses enables you to see how your rent price will potentially affect your monthly revenue. It is also a good idea to consider the capitalization rate, which calculates the rate of return on an investment property using the expected annual rental income divided by the purchasing price.

By taking both the local market and your own rental expenses into consideration, you can find the right rental price for your rental property.

Utilize online platforms in order to promote your rental property

With the convenience of technology and the internet, most tenants will be looking online for their next living space. Be efficient and take advantage of the internet in order to promote your rental property to potential tenants by creating an online rental listing on sites like Zillow or Uloop.

Keep online rental listings short and to the point. Provide information that potential tenants what they would want to know in a quick glimpse. The chances of your online listing being one of many others are high, so making sure yours will say all they need to know to catch their attention is key for making an online rental listing. A successful online rental listing will include:

– Rent price. Most people will be looking for a property with a specific budget, and it may be their deciding factor.
– Address. People will want to know where the property is in order to get more acquainted with the area in terms of commute to work, proximity to schools or entertainment hubs, etc.
– The number of bedrooms and bathrooms.
– Amenities. Promote all your rental property has to offer: laundry facilities, a gym, a pool, etc.
– Photos. While people who come across your online rental listing can make up what they think the space looks like in their head, providing photos of the property can help them visualize the space. It may even make them consider your rental property as a top choice. Post both empty rooms and “staged” rooms to give applicants an idea of the potential of the rental property.
– Creating an online rental listing will also make word of your rental property spread even more quickly, as someone may pass it along to an interested friend or family member with a click of a button.

contract

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Adopt a tenant screening process

When you have people interested in your rental property, you do not want to accept everyone right away just to fill in units right away. You want to make sure that your rental property’s tenants are reliable, that they will pay rent on time and take care of your property as they occupy it.  It is vital that you maintain the same procedure for every single tenant applicant so that you do not face discrimination issues or other problems that may come from a lack of standardized procedures.

Create rental application as the first step for the rental process. This will help attract serious tenants while also give you much-needed information about potential tenants without much work on your end. A rental information should give basic, but useful information: name, current address (and the reason for leaving it), employer information and income, and references. The initial rental application is a necessary step for picking out serious and quality tenants. Make credit and background checks required for applicants. Credit checks are one of the best ways to discover if an applicant is financially responsible or not and if they have the ability to pay rent in a timely manner. Things that are points of caution can include debts, bankruptcy filing, or past evictions. In the same sense, a background check will also give you information about whether a potential tenant has a criminal history that can be an issue for your rental property.

On top of a rental application and necessary checks, make sure that you have a written rental agreement to establish expectations of the rental property in order to protect yourself in the case of any legal situations. If you are relying solely on verbal agreements, it will be much harder to protect yourself or the rental property in a legal situation. The contents of your rental agreements must follow state laws in order to be valid and legal.

A rental agreement should be as specific as possible. Consider adding your rules concerning the following:

– Pets. Are they allowed? If so, what kind of pets are allowed? Is there an extra fee or deposit that is up-front or monthly if a tenant has any pet(s)?
– Late rent fees. What happens when someone is late on their monthly rent payment? Is there a rent payment, and if so, how much?
– Parking situations? Is there a certain space allotted for each tenant? Can they get more parking than what is initially offered?

Infographic by Kaitlin Hurtado, via Canva

Get your tenants to pay rent in a timely manner

Enforce the contents of your rental agreement, including a strict policy about monthly rent payments and the late rent fee that will follow if a tenant does not pay rent on time. You do not want to let a late payment or two pass, because tenants will take advantage of you not enforcing the rules all the time. This can escalate into regularly missed rent payments or other rules listed in the rental agreement to be broken.
Remember that you are running the rental property as a business – a business that your tenants must pay to use. As heartbreaking as a tenant’s situation is, you may have to go further down your rental agreement before it starts hurting your rental property due to multiple missed rent payments.

Make paying rent more convenient for tenants and for yourself. Online rent payments are a lot easier and secure, which will encourage tenants to pay rent more. Collecting a check in the mail is more time-costly when you have to go collect the checks from a mailbox, keep up with documentation, and deposit them. Not to mention, if checks were to bounce, it will be even more time before you can get the rent payment you will need when you will have to contact tenants.

With online payments, tenants can set up automatic monthly payments so that rent is automatically paid in a timely manner each month. Online rent payments are a win for both parties – their rent will be paid conveniently, and you will get their rent payments on time every month.

Prevent problems before they happen 

Even with the promise of landlord insurance, you do not want to solely rely on landlord insurance to keep your rental property in good shape. Just like any business, make sure that the property is well kept in order to prevent unnecessary problems. Conduct routine check-ups to make sure that your building is kept in good condition to avoid long-term problems being left unchecked.

While it is your place of business, it is going to be your tenants’ living space. You will want to make sure that it is a safe place to live. The money spent making sure things are running as they should be will be well worth it when you will have happy and satisfied tenants and a lack of maintenance orders.

Accidents do happen, however, if you do not plant to have on-site maintenance workers, make sure that you have trusted maintenance (like plumbers or locksmiths) to call in case of emergencies.

Make sure that you are regularly checking on the rental property even after your tenant has moved in and documented the condition of the rental space at move-in. Protect your property by making regular inspections to the rental property a priority in order to ensure that it is kept in a good condition and to schedule any required maintenance as it is needed.

Always make sure you are giving your tenants a 24-hour notice of entry and that regular inspections are included in the rental agreements so that the tenant is not blindsided later in the lease. Regular inspections allow you to catch issues before they become major issues – saving you money, stress, and time when it comes to major renovations or accidents caused by a small problem going unnoticed for a long time.

Be organized and timely as a property manager 

As a new property manager, you may feel overwhelmed by the number of things you will have to keep track of. There are receipts for everything, like rent and maintenance, that are obvious when it comes to things you would want to keep track of. However, you also want to keep a record of all communication between you and your tenants in case of a legal situation. Instead of filing papers away and hoping for the best, keep digital records on hand so that things are secure and easier to find exactly when they are needed.

Being a property manager is not an easy task, and it can be overwhelming when you are first starting out managing your rental property. However, being a successful property manager does not mean you have to spend an excessive amount of time and stress focusing on your property. With these steps in mind, hopefully, the beginning of your journey as a property manager will go more smoothly.

By Kaitlin Hurtado

Uloop Writer
UC Irvine
Hello! I'm Kaitlin, a fourth year Literary Journalism major at UC Irvine. I'm a writer on Uloop's national team and a campus editor for UCI.

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