An insight into Property Management: For many people, being a landlord is a rewarding and profitable experience, but if you are new to the rental real estate business, you might have discovered that managing a rental property is not a simple endeavour. Taking the time to gain a basic understanding of some key landlord responsibilities will go a long way in helping you keep a tenant, effectively manage your rental and avoid the most common landlord mistakes. In this guide, we have compiled several tips for new landlords to help you succeed and get the most out of your real estate investment.
Firstly, are you ready to be a landlord? If you are reading this guide, the answer is most likely yes! You might ask if you need to be a management pro, real estate expert or professional contractor to be a good landlord. Being a landlord is a full-time job and you do need to be able to dedicate time to learn the business and keep up with tenant requests and rental property maintenance issues.
Hire a Property Manager
The more rental properties you own the more you are likely to benefit from the services of a Property Manager. If your rental property is located far from where you live, hiring a Property Manager can be priceless in dealing with the many issues that you will not be able to handle from afar. Many landlords look forward to the challenge of finding good tenants and the rewards of maintaining a property on their own. However if you view rental property ownership strictly as an investment and want little or nothing to do with the day-to-day management of your properties, consider hiring help to manage your property. Even if you enjoy hands-on management, you may not have much time to devote to your rental property, especially if property management is not your day job. And if you prefer to spend your time growing your main business or searching for new properties then a Property Manager’s services may be a good way to spend your money. Hiring a property management company is an attractive option because the fees are tax deductible. In Singapore, Ping Property is the first company providing Professional Property Management Services for residential properties. In other countries, it is typical that property management companies charge fees ranging between 5% and 10% of what you collect in rent revenue. Speak to your Ping Property Manager to discuss how we can help you manage your properties.
Whether you own 1 or a portfolio of several properties, your dedicated Ping Property Manager will be able to manage your investment property for you. While we cannot predict problems, we are experienced in handling tenant issues at any time of day or night. Familiar with the business of property management, we handle issues such as tracking of your rental income and expenses and we stay on top of general maintenance. We have established a productive property management Phone App for you so that all you need to do is to monitor your investment property from your smart phone.
Our People Skills
Is the stress of dealing with evictions, complaints and maintenance issues taking a toll on you? Ping Property Managers are skilled in handling landlord-tenant conflict. We have an understanding of landlord-tenant relationship, and can serve as the middle-man, or buffer, for problems. In addition, if the tenant knows they are dealing with a third party, they may act more professionally as well.
Our professional Property Managers posses a number of skills; including customer service, sales, marketing, accounting, maintenance, time management and delegating. We strive to build a strong professional relationship with our tenants because sometimes the best business decision is knowing how to handle people and sticky situations.
Understanding your real estate investment
Perhaps you are an “accidental landlord” who inherited a property or choose to rent your home after a move. Or maybe you are looking to actively invest in one or more properties. Either way, a rental property is best viewed as a long-term investment, whether your goal is supplementing your income today or creating wealth over time.
Find the right property
When you start looking for a rental property (or you are trying to determine the value of a property you have acquired) some factors to consider are the neighbourhood, access to transportation, supermarkets, schools and employment. The price of the property may be attractive, but you will want to be sure the location is as well. If you would not want to live there, then potential tenants will likely feel the same way. In addition, if you are purchasing a property with existing tenants, do not assume there is a built-in stream of income; find out if the tenants have been making reliable rent payments.
Determine your cash flow
Before purchasing a property, you will want to figure out if it has the potential to produce positive cash flow given current market conditions. A positive cash flow means there is more money coming into the property than going out of the property (through mortgage payments, taxes and maintenance costs). For example, if you collect $3,600 in monthly rent, and pay out $3,100 in monthly expenses, you’ll have $500 to put in the bank each month.
You will need to decide what your budget can bear and how much you want to earn to make the investment property worth your time and effort. Be sure to take a conservative approach to any financial projections for the property and prepare for surprise expenses and missed rental payments — you are still responsible for the mortgage even if your tenant has not paid or your property remains vacant.
Set your rent
After you have purchased your rental property, it is time to understand the dynamics of the local real estate and rental market and set your rent price. Look at other rentals in your neighbourhood that are similar in size, quality and proximity to transportation and schools. Get a feel for the local job market — are people gainfully employed? — and take into accounts amenities, parking and other property features. You will need to stay on top of changing market conditions and each neighbourhood is different; so speak to your Ping Property Manager to have a better understanding.
When you are starting out as a landlord, you can expect some negative cash flow and bumpy times, just as you might experience in any other new business. However, planning for a rainy day and staying informed about your local market through your Ping Property Manager can help improve the overall return of your property.