First of all, you need to know who you’re renting your property out to. And I mean you really need to know them. An important task in property management is carefully analyzing your potential tenants and letting the property out to someone who is going to respect the property, maintain it and pay their rent on time every month. It is highly advisable to do a background check on tenants, a credit check and call their previous landlords for references. As a property manager you should do these checks and not necessarily believe what tenants tell you about themselves and their past residences.
One you have decided upon a suitable tenant, ensure that you lay out a full-proof contract that is mutually beneficial and protects both the property manager and the tenant from any unfortunate situations. Ensure that all possible scenarios are covered in the contract and that appropriate penalties for breaking the contract are clearly laid out. Many companies will often have lawyers who prepare these documents for them; perhaps it might be a good idea for you to leave this part up to a third party if you do not have sufficient legal experience.
It is important that you do a careful and thorough analysis of your property before the tenant moves in. As a property manager, you need to accurately be able to compare the state of your property before a tenant moves in, to the state that the property is in when they leave. Take photos, make notes of any flaws etc., and get your tenant to sign a document that states that they agree with the current state of the property. Property management can become a nightmare when you and your tenant disagree on different flaws in the property that are suddenly visible when they leave.
Remember that you are investing in property, so as a manager, do not be afraid to invest a little bit of money in the upkeep and maintenance of the property. By doing this, the property will be in a better condition and you will be able to charge a higher rent. Any money spent on renovations or maintenance will quickly be returned from rental income.
These are the very basic steps of property management. There is a lot more that we could get into, but if you cover these basic steps you are already on your way to becoming an effective property manager. Good luck!
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