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Passive income is often misunderstood as being a form of income that you do nothing at all to acquire, yet manage to make a decent amount of money, year after year. Property can be a great source of passive income but that doesn’t mean you won’t have to do anything at all. It may not be as labor-intensive as some other forms of investments that generate passive income, but when you are managing a large portfolio of properties, it can take a lot of time and effort to keep the ball rolling. This is especially true when we talk about older properties; maintenance and upgrades can become quite cumbersome and expensive to do. However, where there’s a will there’s a way and with these expert tips, you can comfortably manage a single property or a large portfolio. If you are just starting out, these will be valuable pointers to keep in mind that will help you scale up smoothly.
1. Documentation
One of the most challenging parts of property management, documentation is basically keeping track of what has been done and what needs to be done to a property. The process can be especially challenging if you have a number of properties that you tend to. For example, if a house has bad plumbing, and there are 5 bathrooms and each of them has different problems, it can be very easy to confuse which bathroom needed the new sink, which one needed a new shower, and so on. Now multiply this with ten houses, and you can see how confusing it can be. Even if you were delegating this task to a plumbing service or a property manager, you still need to know what changes were made and where they were made. This way, you can check on them later and also let your tenants know. Be sure to write down every change that you make and every bit of work that is carried out. Consider making a separate file for each property and updating it with every development.
2. Inspections
It can be especially time-consuming if you have properties across the country or in different countries; to inspect each one physically and evaluate its condition periodically would be nearly impossible. However, this is one of the most important parts of property management. Make sure you hire a quality service for property inspection and maintenance as this is something that will heavily influence the quality of your property. Poor evaluations, bad work quality, and failure to properly check vital components such as fire alarms, HVAC systems, and waterworks, could eventually cost you a lot of money. Moreover, you want to delegate this task to people who are familiar with local regulations and requirements so they deliver work that meets the standards, and you (the property owner) don’t have to deal with more problems because they didn’t do their job properly.
3. Outsource
At the end of the day, the properties you manage are creating an income and this is business. Just like any business if you want to take it to the next level and optimize your operation to create even more money, you need to build a qualified team and delegate processes to expand capacity. There are numerous ways to outsource specific tasks related to property management and focus all your efforts on your own area of expertise whether that is marketing, renovation, or investing in new properties. It can be a bit intimidating at first to give someone else authority over your domain and then pay them for it. But with the right training and direction, you can find really good people who can do the job really well.
4. Filter Your Clientele
As a property owner, you always want to rent it to the highest paying tenants, and that’s very reasonable. But sometimes you can save yourself a lot of headache by offering your property at a lower price to someone who might not be willing to pay as much but is a really cooperative tenant to work with. For example, if you rent your property to a company that will be using it to accommodate their executive staff, you might take a hit in the monthly rent, but this is a very long-term tenant who will most likely take very good care of the property. Moreover, working with high-value tenants also increases the value and prestige of the property, which won’t benefit you right away but it’s a big gain in the long run.
Managing properties can be really easy to do if you tackle any problems the right way and have a great team to work with. Rather than trying to do everything on your own consider hiring people who are competent and trustworthy. Moreover, make use of technology, adopt new strategies, and work smart rather than working hard.