How To Manage Your Own Rental Properties (And Why You Shouldn’t)
If you are considering getting into property investing, you may be toying with the idea of managing your properties yourself. While this is doable, you should go in with your eyes wide open about what it entails. Managing rental properties well is a labor-intensive undertaking, with the potential for steep costs if you make an error in judgment.
Property management involves getting the unit ready to rent, marketing it, screening tenants, and preparing and signing a lease. You must alsocomply with all local and state laws, such as getting a business license for short-term rentals. In addition, you will have to deal with maintenance requests, ongoing repairs, HOA compliance and violation remediation, tenant complaints, evictions, and finding new tenants when one leaves. For many property investors, working with a property management company is a cost-effective alternative to the do-it-yourself option.
Eaton Realty works with investors throughout Hillsborough County, Florida, to help them manage their rental properties. We make the property management process as simple as possible, with systems in place to prep your units for rental, market it, deal with any issues that may arise using smart tech solutions, and more. Reach out today to learn more about our property management services.
How to Manage Your Rental Properties
There are several steps involved in property management. If you already have one or more rental properties, congratulations! Acquiring the property is a huge step and a great way to build wealth. Now comes the hard part: managing your property.
Legally Protect Yourself
As an initial matter, you must ensure you have all of the legalities in place. The steps you need to take will vary based on where the property is located, whether you plan to rent it short-term or long-term, and to commercial or residential tenants. You will need to research both local ordinances and state laws and regulations to ensure that you have the appropriate licenses and permits. You should also secure landlord insurance that specifically provides property protection and tenant liability protection.
Get The Property Ready To Rent
Next, you will need to get the property ready to rent. What this means can vary significantly based on the unit in question. If your rental is located in a high-end area of Tampa, for example, you may need to do some upgrades to ensure that you meet prospective tenants' expectations. Doing some market research can help you understand what should be done to improve your chances of finding a great tenant. At a minimum, most landlords like to paint their units to make them bright and fresh. You can also work on curb appeal, adding landscaping or other improvements to the exterior.
You should find and hire a reputable cleaning service to make sure that the property is as clean as possible. You may also hire a contractor to make necessary repairs, replace locks, and make other improvements.
Stage The Property & Take Listing Photos
Depending on your budget, you may even stage the rental. This can be done by a staging company or even through virtual staging. At this point, you should find a photographer to take pictures of the property for marketing purposes.
Having great photos that show off your rental is essential when it comes time to list your property. You’ll also need a good description highlighting your home's best features. You can then post the photos and description on various rental property websites. Depending on the number of hits you’re getting, you may need to pay extra to advertise your property with premium placement.
Show The Property & Screen Potential Tenants
Hopefully, you will start getting calls and emails about your rental property. Set up appointments to meet prospective tenants and show the property. If they are interested, you will need to screen them before deciding whether to rent them. Screening tenants can be a time-intensive process. You should start by setting some standards. Think about what tenant you’d like to have and anything you don’t want to happen on your property (like smoking). Next, you should:
Hopefully, you will have more than one application from prospective tenants for each unit. At this point, you may choose to schedule interviews to narrow down the field and decide who to choose.
Draft A Lease Agreement & Get It Signed
Next, you will need to have the tenant sign a lease. If you don’t have one, you should work with a lawyer to draft one. An attorney familiar with landlord-tenant law will ensure that the lease terms are valid and that you are protected. Ata minimum, the lease should include the names of all tenants, occupancy limits, terms of the tenancy, rental amount and when it is due, any deposits and fees, responsibility for repairs and maintenance, restrictions on illegal activity, whether pets are allowed, your right to enter the property, and any other restrictions or limits you want.
Provide Ongoing Support & Maintenance
Once your tenants have moved into the property, you will be responsible for ongoing repairs and maintenance. Your tenants may call you in the middle of the night to tell you that a pipe has burst or the refrigerator has died. You will need a plan for how to manage repairs, whether you are handy and will fix things yourself or you will have a list of contractors you can call to handle these issues.
Your tenants may also have other complaints to address. For example, they may be upset about a noisy neighbor or ask you if they can have an exception to your no-pets policy. You will be responsible for figuring out how to handle each of these complaints or requests promptly.
You will also have to collect rent from your tenants. If they don’t pay, you will need a system to provide them with a written notice to cure. If you need to evict your tenants for non-payment of rent or a lease violation, hire an attorney to handle that process or learn how to represent yourself.
Once a tenant moves out or is evicted, it’s time to start the process from scratch. Ideally, you’ll keep your rental properties occupied most of the time to limit carrying costs and maximize profits.
Is Managing Your Own Rentals a Good Idea?
The idea of managing your own rental properties may be incredibly appealing. After all, if you manage your properties on your own, you’ll have full control over every aspect, from marketing to tenant screening to performing maintenance and repairs. It can also mean saving money on property management fees and ensuring that your property is cared for in the way that you want it to be.
Of course, having complete control over your rental properties also means that you have all of the burdens that come with property management. Consider the issue of property maintenance and repairs. Problems like a broken hot water tank don’t just happen when it’s convenient. If you manage your own rental properties, you’ll likely be getting calls at work, evenings, weekends, or even while on vacation. Whether you’re retired or unemployed, handling this aspect of property management can be incredibly challenging.
If you have multiple rental properties, keeping track of and prioritizing requests and complaints from tenants can also be challenging. Not having a system to stay organized can lead to unaddressed issues, which may ultimately lead to unhappy tenants - and even lawsuits. After all, landlords in Florida have certain obligations, and a failure to perform can lead to legal liability.
It can also be difficult to screen tenants properly and in accordance with Florida and federal law. For example, did you know that under the Fair Credit Reporting Act (FCRA), you must get a tenant’s written consent before running a credit check? You also must comply with various anti-discrimination laws to avoid the potential for legal liability.
Unless you’re experienced with tenant screening, it can be hard to spot good tenants - those who will pay their rent on time, be respectful of your property, and won’t bother other tenants or create problems. Property managers not only have an eye for spotting good potential renters but a process for performing a thorough background check. This may include a credit check, employment history, eviction records, court records, criminal history, reference checks, and more.
Once your property is rented, a property manager will deal with mundane issues like rent collection and maintenance requests. They can also handle things like evictions, which must follow a strict procedure under Florida law. Many landlords simply don’t have the time to learn how to do evictions properly, let alone ensure they do each step right so that a tenant can’t challenge the eviction.
Ultimately, it is possible to manage your rental properties on your own - especially if you have a lot of time and experience in the field. However, making mistakes when managing your rental properties can be incredibly costly, whether you are losing money due to choosing a bad tenant or getting hit with a massive fine for something like housing discrimination.
A skilled property manager can help you avoid these unnecessary costs. They also typically have software and other technology to handle things like collecting rent and receiving and responding to maintenance requests. Automating the process this way can reduce the likelihood of making a mistake or overlooking something.
A property management firm will charge you a fee to handle your rental properties. This fee is typically money well spent, as it allows you to focus on your own work, other investments, and even leisure activities. After all, if time is money, then investing some funds towards property management is a smart business decision. It can allow you to minimize operational costs, reduce stress, and maximize your own time and profits.
How Eaton Realty Can Help
Being a landlord can be a great way to earn passive income. However, dealing with tenants can be a source of frustration and stress. A Hillsborough County property management company can help you avoid issues like lost rent, property damage, and wasted time by properly screening tenants, handling maintenance issues, and going through the eviction process for you.
Based in Lithia, Florida, Eaton Realty works with landlords and investors throughout the greater Tampa-St. Petersburg region. We have decades of experience in the real estate market, including property management. Our team will help you minimize stress and maximize profits for your rental properties.
To learn more about our services, fill out our online contact form or call our office at 813-672-8022.