[FONT="]Property Management of Your SFH or Now What do I do?[/FONT]
Most beginning investors self manage their first investment properties. After you spent your time and energy acquiring the potential cash cow how do you manage it? Managing properties is a completely different job and requires different skills than buying. Here are some things I have learned.
[FONT="]Step 1: You need to review the rent rolls to see who you have on roll and see their rent payment history. This should have been also done during your due diligence period before your closing.[/FONT]
[FONT="]Step 2: Arrange a letter of introduction. [/FONT]
[FONT="]•[/FONT][FONT="]In the letter you need to provide your business contact information and rent payment arrangements.[/FONT]
[FONT="]•[/FONT][FONT="]With some tenants(good tenants) you want to reassure them that you will treat them fairly and that you will honor all terms of the lease agreement.[/FONT]
[FONT="]•[/FONT][FONT="]With other tenants (not so good tenants) you will want the wording to reinforce the terms of the lease and reiterate that you intend to honor the lease and you expect them to as well.[/FONT]
[FONT="]Step 3: Have a questionnaire for the tenants to fill out.[/FONT]
[FONT="]•[/FONT][FONT="]You need the names and ages of all the people that live there.[/FONT]
[FONT="]•[/FONT][FONT="]You need contact information(.cell, home, work phone numbers, email addresses, etc)[/FONT]
[FONT="]•[/FONT][FONT="]You may need copies of photo ID to verify tenants identity.[/FONT]
[FONT="]•[/FONT][FONT="]You may need car descriptions and tag numbers.[/FONT]
[FONT="]Step 4: Build a reputation and relationships with your business.[/FONT]
[FONT="]•[/FONT][FONT="]You need to work on being pleasant, consistent, and predictable.[/FONT]
[FONT="]•[/FONT][FONT="] You need to understand that you will have difficult situations and you need to handle them professionally.[/FONT]
[FONT="]•[/FONT][FONT="]If you let a tenant be late one month they will be late another month.(There are rare exceptions.)[/FONT]
[FONT="]•[/FONT][FONT="]If you let a tenant be late one month and do not collect late fees then they will expect it the next month.[/FONT]
[FONT="]•[/FONT][FONT="]If you let them collect trash in the front yard once they will do it again.[/FONT]
[FONT="]Step 5: You will need to collect paper forms.[/FONT]
[FONT="]•[/FONT][FONT="]You will need a written form for every incident that arises.[/FONT]
[FONT="]•[/FONT][FONT="]Keep a copy of all written correspondence with tenants.[/FONT]
[FONT="]•[/FONT][FONT="]Examples of forms: 3 day pay or quit, notice to enter premises, notice of impending maintenance, notice of nonpayment of rent, notice of change in contact information.[/FONT]
[FONT="]•[/FONT][FONT="]Provide receipts to tenants for any payments that they make.[/FONT]
[FONT="]To keep your relations good with your tenants here are some courtesies that may help.[/FONT]
[FONT="]•[/FONT][FONT="]Remember it’s your house and business but it is their home.[/FONT]
[FONT="]•[/FONT][FONT="]Do not park in or block their driveway.[/FONT]
[FONT="]•[/FONT][FONT="]Do not enter the unit unless you are invited unless it is and emergency.[/FONT]
[FONT="]•[/FONT][FONT="]You are required to give 24 hours written notice before you have to enter the unit for maintenance unless it’s an emergency.[/FONT]
[FONT="]•[/FONT][FONT="]You are required to give 30 day written notice for any change of terms of the lease.[/FONT]
[FONT="]•[/FONT][FONT="]Tenants should provide written notice of problems with unit. They often do not. Even if they casually mention a problem they still want it fixed. [/FONT]
[FONT="]Some tricks for dealing with difficult tenants.[/FONT]
[FONT="]•[/FONT][FONT="]Emergencies can be subjective.[/FONT]
[FONT="]•[/FONT][FONT="]Emergencies can occur while the tenant is away or at work.[/FONT]
[FONT="]•[/FONT][FONT="]These emergencies or the belief that there is an emergency provide you or your personnel the cause to have access to the unit.[/FONT]
[FONT="]•[/FONT][FONT="]Possible emergencies: plumbing problems, leaking toilets, possible gas leak, possible electrical problems, possible HVAC problems, possible roof leaks.[/FONT]
[FONT="]•[/FONT][FONT="]While attending to that emergency you may discover that there are hazards to the tenants health. These hazards may be an inconvenience to the tenants.[/FONT]
[FONT="]•[/FONT][FONT="]The tenants may decide that they don’t want to live in a place with these possible hazards.(Oh shoot)[/FONT]
[FONT="]Dealing with prospective new tenants.[/FONT]
[FONT="]Prepare yourself an application.[/FONT]
[FONT="]Show unit.(Have pens and clipboards for prospects to fill out apps)[/FONT]
[FONT="]Applications must contain the conditions that could exclude a prospective tenant from consideration.[/FONT]
[FONT="]Conduct personal interviews and ask questions that require more than yes or no answers.[/FONT]
[FONT="]Get copies of legal identification.(digital camera)[/FONT]
[FONT="]Listen[/FONT][FONT="] to responses and read their body language. Interview all the adult tenants.[/FONT]
[FONT="]Be upfront and extremely clear about all deposits, fees, and rent amounts and when they are due. Present these in writing and have the prospect sign theirs and your copy of the lease.[/FONT]
[FONT="]Check references, criminal, and credit backgrounds.[/FONT]
[FONT="]If they are OK, then:[/FONT]
[FONT="]Prepare a lease with all conditions.[/FONT]
[FONT="]Go over each condition of the lease with your prospect before allowing them to sign. If there are any changes to the lease have both parties initial the changes.[/FONT]
[FONT="]Sign lease[/FONT]
[FONT="]Collect money[/FONT]
[FONT="]Provide receipts[/FONT]
[FONT="]Show that the keys work and provide keys.[/FONT]
[FONT="]Tour unit with tenant one more time to note any problems.[/FONT]
[FONT="]Refer to step 3.[/FONT]
Feel free to add your input or disagree with me. We may both learn somehting new.:cheers:
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