You just bought a beautiful place overseas. Now what? You have to manage it somehow, and this is where a lot of property owners mess things up. Fortunately, there are some simple ways to get the job done without losing your sanity.
Hire A Property Manager
This will make the difference between a successful investment and a constant headache. Hire a local property manager with many years of experience and who understands the real estate market for the type of property you own.
Property managers perform the day to day operations of maintaining the home or apartment and the land. They also take care of evictions and helping you find tenants to rent to. You do have to pay them a fair sum of money, but they nearly always pay for themselves in convenience.
Like anything else, you need to shop around and ask the property manager what they will and will not do. Most will take care of practically everything for you, but check first – don’t assume.
Set a Fair Price
When you rent your place out to tenants, be fair. A lot of landowners want to make crazy returns on their property investments, but if the price is too high, you’re not going to get any tenants. If the price is too low, you’re going to get the wrong kind of tenants – you know the ones
You want to be charging a market price that’s fair and one that will provide you with decent yields. If you really think you have a superior property, you can try charging above average rates. Just be realistic and honest about what you have. If your properties are merely average, stick with average rental rates.
If you’re running luxury suites, then you can consider charging more. Even then, you will need to compare your rates to other similar quality rentals and keep things competitive.
Say No To Any Renter With Grace
It’s OK to say “no” to a renter. Some people are really desperate for a home, and it is what it is. But, that doesn’t mean you have to be the one that shelters them. Sure, if you let anyone in, you’ll get the first and last month’s rent – then what? If they burn the place down, or if they destroy the walls or start remodeling, you’re stuck with two problems: evicting them (which is not easy) and cleaning up the mess (which will probably cost you more than the rent you just collected).
To make sure you get good tenants, you could employ a tactic popular with some landlords: have existing tenants interview them, especially tenants that will be living near them. If they’re OK with their new neighbors, then the new tenant might not be so bad.
You can also have a property manager interview them and weed out the undesirables.
Get Insurance On The Property
Always get insurance on the property. A special landlord insurance policy will protect you against storms, floods, fire, smoke, explosions, subsidence, theft, collision (if someone drives into your building), malicious behavior and vandals, and falling debris, like trees.
Most of these types of things are catastrophic and, even when they aren’t, they’re damaging enough that they will cause serious financial hardship if you have to pay to repair your rental unit out of pocket.
Contents insurance will cover the contents of the building, and additional landlord insurance covers public liability, legal expenses if you need to take a tenant to court, and a rent guarantee which guarantees you get paid if your tenant defaults on the rent (this is really nice to have).
Set Up A Maintenance Schedule
To keep maintenance under control and keep your building from falling apart, it’s a good idea to set up a maintenance schedule with your property manager. Work out a reasonable budget for property maintenance, set aside some money for it, and periodically replace things that need replacing, like water heaters, or paint the units.
Lawn mowing, hedge trimming, and other general maintenance should also be put on a schedule.
Use Direct Debit Or ACH For Bill-Paying
Put your bills on autopilot – it’s much easier than having to manage them each month manually. Most banks are set up to allow automated bill paying or ACH draws. And, most creditors have automated systems to allow automated payments.
Just as you rely on tenants to pay rent, they rely on you to pay the property taxes, sewer, mortgage, and any other expenses that keep the rental unit going.
Laura Finney is a property manager. She enjoys sharing her experiences by posting online. Look for her articles on many real estate and investment sites.