As a landlord, you’re in charge of maintaining your rental property—and that includes keeping it rented out! But how do you know if self-managing is the right option for you? In this post, we’ll explore the basics of self-managing and what you need to know before making the switch. Keep reading to learn more!
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Pros of Self-Managing: You’re In Control
As a self-managing landlord, you’ll be in complete control of your rental property. From finding and vetting tenants to handling repairs and maintenance, you’ll have the final say on everything. And if something does go wrong, you won’t have to rely on anyone else to fix the problem—you can take care of it yourself!
There are plenty of other advantages to self-managing your rental property as well. Here are just a few:
- You’ll save money on management fees.
- You’ll have more control over who rents your property.
- You can respond quickly to any problems that arise.
- You’ll gain valuable experience in managing rental property.
- You can build a better relationship with your tenants.
- You’ll have more flexibility in how you manage your property.
- You can customize your approach to fit your specific needs.
- You can make decisions based on what’s best for your property, rather than what’s best for a management company.
- You’ll have a better understanding of the local rental market.
So, self-managing your rental property can have a lot of benefits! But before you make the switch, there are a few things you should keep in mind.
Cons of self-management: More work for you
Self-managing your rental property is a big responsibility—but it’s not for everyone. Here are a few things to consider before making the switch:
- Are you prepared to handle all aspects of property management?
- Do you have the time and energy to devote to self-management?
- Are you comfortable dealing with tenants directly?
- Do you have a good understanding of the local rental market?
- Are you prepared to handle repairs and maintenance yourself?
If you answered “no” to any of these questions, self-managing your rental property might not be the best option for you. But if you’re prepared to take on the challenges that come with self-management, it can be a great way to save money and have more control over your rental property.
Screening applicants when you’re the landlord
As a self-managing landlord, one of your most important responsibilities is screening tenants. You need to make sure you’re renting to responsible, respectful individuals who will take care of your property and pay their rent on time. The best way to do this is to have a thorough tenant screening process in place, an consider using an online tenant screening service.
Here are the basic steps you should follow when screening tenants:
1. Collect information from each applicant
The first step in screening tenants is to collect information from each applicant. You’ll need to gather basic contact information, previous rental history, and employment information. You can use a standard rental application form to make this process easier.
2. Run a credit check
The next step is to run a credit check on each applicant. This will give you a good idea of their financial responsibility and whether they’re likely to pay their rent on time. You can order a credit report from one of the major credit reporting agencies, such as TransUnion, Equifax, or Experian.
3. Verify employment history and income
In addition to a credit check, you’ll also want to verify an applicant’s employment history and income. This can be done by requesting pay stubs or tax returns. You should also contact their previous landlords to confirm that they paid their rent on time and took good care of the property.
4. Check references
Another important step in screening tenants is to check their references. This includes personal references, as well as professional references if the applicant has any. You can contact these references by phone or email to ask about the applicant’s character, rental history, and financial responsibility.
5. Meet with the applicant in person
Once you’ve collected all of this information, it’s a good idea to meet with the applicant in person. This will give you a chance to get to know them better and see if they’re truly responsible and respectful.
6. Make a decision!
After you’ve followed all of these steps, you’ll be ready to make a decision about whether or not to rent to the applicant. If everything looks good, congratulations—you’ve found yourself a great tenant! But if there are any red flags, it’s best to keep looking.
Remember, the goal of screening tenants is to find responsible, respectful individuals who will take care of your property and pay their rent on time. By following these steps, you can increase your chances of finding such tenants.
How to show your rental property
When you’re showing a rental property to prospective tenants, there are a few things you should keep in mind. First of all, it’s important to be professional and courteous. Remember, you’re representing your property—and yourself—so it’s crucial to make a good impression.
It’s also important to be prepared. Before showing the property, make sure you know the answer to any questions the tenant might have. You should also have a copy of the lease agreement on hand so that you can go over it with the tenant if they’re interested in renting the property.
Finally, it’s important to be flexible. You never know when a prospective tenant is going to want to see the property, so it’s important to be able to accommodate their schedule. If you can’t, you might just lose out on a great tenant!
By following these tips, you can ensure that your rental property showings go smoothly—and that you find the perfect tenant for your property.
Collecting rent from tenants
There are a few different ways that a landlord can collect rent from a tenant. The most common method is to simply have the tenant write a check each month and drop it off at the landlord’s office or mail it to their address.
Another option is to set up an automatic withdrawal from the tenant’s bank account. This can be done through a service like RentPayment. This is generally considered to be the simplest way for both the landlord and tenant, as it eliminates the need for the tenant to remember to pay rent each month.
Finally, some landlords choose to use an online rent payment system, such as Apartments.com (formerly Cozy) or RentRedi. This allows tenants to pay their rent from anywhere in the world, as long as they have an internet connection. This can be a great option for tenants who travel frequently or who live far away from the rental property.
Dealing with maintenance and repair issues
As a landlord, you are responsible for maintaining the property and ensuring that any necessary repairs are made in a timely manner. This includes everything from fixing a broken window to repairing a leaky roof.
Of course, not all repair issues are created equal. Some are small and can be easily fixed by the landlord, while others require the help of a professional. Some common repair issues that landlords may have to deal with include:
- Plumbing issues, such as leaks or clogged drains
- Electrical problems, such as faulty outlets or wiring
- Heating and cooling issues
- Roof leaks
- Pest control
Of course, this is just a small sampling of the repair issues that landlords may have to deal with. While some repairs are relatively simple and can be easily fixed by the landlord, others may require the help of a professional.
When it comes to dealing with repair issues, it’s important to remember that time is of the essence. The longer you wait to address a repair issue, the worse it will get—and the more expensive it will be to fix. By being proactive and addressing repair issues as soon as they arise, you can save yourself time, money, and a lot of headaches.
Handling late rent payments and evictions
It’s no secret that late rent payments are one of the biggest headaches for landlords. Not only do they cause financial problems, but they can also be a huge hassle to deal with.
The best way to deal with late rent payments is to be proactive. The first step is to have a clear and concise late policy in place. This policy should state when rent is due, how many days tenants have to pay before they are considered late, and what the consequences will be for late payments.
Once you have a late policy in place, it’s important to enforce it consistently. This means that if you allow tenants a grace period of five days to pay their rent before they are considered late, you can’t suddenly change the policy and say that they only have three days.
If a tenant does pay their rent late, it’s important to charge them a late fee. This late fee should be clearly stated in your lease agreement. It’s also important to remember that you can’t just arbitrarily charge whatever you want—late fees must be reasonable.
Finally, if a tenant consistently pays their rent late, you may decide to start the eviction process. While this is definitely a last resort, it may be necessary if nothing else has worked.
The eviction process is governed by state and local laws, so it’s important to familiarize yourself with the laws in your area before starting the process.
In general, the eviction process involves giving the tenant a notice to vacate, which gives them a certain amount of time to move out. If the tenant doesn’t comply with the notice, you can then file for an eviction. This will require going to court and getting a judge to sign off on the eviction. Once you have a court order, you can then contact the sheriff’s office to have the tenant forcibly removed from the property.
While evictions are definitely a last resort, they may be necessary if all other efforts to get the tenant to pay rent or vacate the property have failed.
Record keeping for self-managed rental properties
One of the most important—and often overlooked—aspects of self-managing a rental property is record keeping. Without accurate and up-to-date records, it will be very difficult to keep track of your income and expenses, which you’ll need to do when it comes time to file your taxes.
There are a few different options available for rental property record keeping. You can use a paper system, where you keep all of your records in a physical filing system. You can also use a digital system, where you store your records electronically.
Whichever method you choose, there are a few best practices that you should follow:
- Be consistent: Once you’ve decided on a method for keeping track of your records, stick with it. This will make it much easier to stay organized and ensure that all of your records are up-to-date.
- Keep track of income and expenses: It’s important to keep track of both your income and your expenses. This will help you when it comes time to file your taxes. You can use a software program like Zillow Rental Manager or Stessa to track your income and expenses, or you can use a simple pen and paper system.
- Track common rental property transactions: There are a few common rental property transactions that you’ll need to keep track of, such as rent payments, security deposits, repair costs, and utility bills.
By following these best practices, you can ensure that your rental property record keeping is accurate and up-to-date, and you’ll have the information you need to complete IRS Schedule E when tax season comes around.
Things that could go wrong when self-managing your rental property
While no landlord has a crystal ball, it’s a relatively sure thing that eventually something will go wrong when self-managing a rental property.
Here are 5 common things that could go wrong, along with suggestions on how to solve each issue:
You might not be familiar with the law
If you’re not familiar with the law, you could run into legal trouble. To avoid this, make sure to educate yourself on the basics of landlord-tenant law and fair housing laws.
You might not be able to keep up with repairs and maintenance
If you’re not able to keep up with repairs and maintenance, your property could fall into disrepair. This can be a major problem, as it could lead to health and safety hazards for your tenants. To avoid this, create a maintenance schedule and budget for yourself, and stick to it.
You might not be able to collect rent on time
If you’re not able to collect rent on time, you could find yourself in financial trouble. To avoid this, be clear about when rent is due in your lease agreement, and send out reminders to your tenants a few days before rent is due.
You might have problem tenants
If you have problem tenants, they could cause damage to your property or disturb the peace for other tenants. To avoid this, screen your tenants carefully and require a security deposit.
You might not keep accurate records
If you don’t keep accurate records, it will be difficult to keep track of your income and expenses. This can lead to problems come tax time. To avoid this, use a software program like Zillow Rental Manager or Stessa to track your income and expenses, or use a simple pen and paper system.
By following these tips, you can avoid common self-management problems and run your rental property smoothly.
Is self-managing rental property right for you?
As a self-managing landlord, there are a few key things you need to keep in mind in order to be successful.
First, you need to be organized and have a good system for keeping track of your finances and your property. You also need to be proactive about maintenance and repairs, and be prepared to handle any tenant issues that may come up. Finally, it’s important to know the law and stay up-to-date on changes that could affect your business.
By following these tips, you can set yourself up for success as a self-managing landlord.
If you want to be a successful property manager, then Achieving Financial Success as a Property Manager: An Insider’s Guide is for you! This invaluable resource provides all the essential information and strategies you need to excel in the rental property management industry. Don’t wait – get your copy now from your favorite bookseller:
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Written by J. Scott Digital freelance copywriting services, featured photo by Brett Jordan on Unsplash.
