Some property owners decide to hire a management company to handle their residence rental, which can provide several benefits, but may wonder if the outcome is worth the cost.
Most property management companies charge between 5 to 10 percent of the rental fee.
To avoid paying the fee, a property owner can handle the same services and improve the return on investment.
You can use advertising locally and online to find an appropriate tenant. Placing a “For Rent” sign outside of the property that includes basic details may be effective. An ad in a local weekly publication or flyers distributed in the area can also generate interest. Placing an ad on Craigslist or another online website or publication may also be a good option. Finding a responsible tenant can be one of the most key steps in making your rental experience profitable.
Screening a tenant
Screening a potential tenant to your comfort level may involve a credit or background check, and a tenant application. When meeting the prospective renter in person, engage in a discussion with them to establish rapport and use your best judgment with the following goals in mind that can increase your return on investment give you fewer headaches:
- The property will be well-kept and therefore require fewer repairs and maintenance.
- Rent will be received on time.
- The lease could extend beyond the first year.
Taking a class that reviews real estate and rental property legal issues will help you avoid complications, such as observing discrimination laws during tenant application and screening, drafting a secure lease agreement and minimizing risk in the property and on its grounds.
Timely maintenance and repairs
Handling repair and maintenance requests quickly can maintain a positive owner-tenant relationship and can prevent smaller repairs from growing and becoming costly expenses. You may need to find a maintenance and repair and HVAC company to retain for standard and emergency repairs. Read about preventive maintenance requirements
It can be an advantage to being in the local area of the property as the owner to respond to any issues that develop, or to hire someone to handle any problems as necessary.
Renting property involves many nuances that may not always be clear to someone untrained in the field, but a property owner can learn the steps to manage the rental process independently. A rental management company charges 5 to 10 percent of the monthly rental fee, which can be costly.
Attending classes, asking questions, reading article online and networking with other property owners can give a property owner the tools to manage in lieu of hiring a professional.
Areas to gain expertise in include marketing, rental applicant screening, property management legal issues, routine maintenance and repair and emergency issues as they come up.
It is important to develop experience and skills in key areas to ensure that you are mitigating risk, maximizing profit and feel assured that your property is in the best possible hands, your own.