Being a new landlord and managing property for the first time can be overwhelming. Many new landlords make errors that make them incur losses and hate the property management business. There are some tips you can employ to ensure your first property management project is successful.
Rent must be priority
According to Noah Kiganda Ssonko, the managing director Ecoland property services, rent is your major source of revenue therefore, be willing to aggressively pursue payments and have late charges for delayed ones unless there is a genuine reason.
Have the tenants vacate the house for newer ones that are able to pay on time. Most times it is hard to have long time defaulters pay as their debt keeps accumulating the longer they stay in your property.
Kiganda says: “If a tenant stops paying rent and ignores your calls, then you need to start the eviction proceedings or you will find that the tenant is not paying for a long period of time thereby making you incur losses.”
Failing to keep records of revenue and expenditure is one of the greatest mistake any landlord can make. Without such information, there is no way you can know if your property is making profits or not. Some tenants may actually take advantage of you and probably not pay on time because you do not have the records.
Know your tenants
Also knowing your tenants is important in helping you realise your rental fees on time.
Before getting the person to be your tenant, it would be prudent for you to know the type of work they do and the number of people they are coming in with in order for you to assess their ability to pay your rent on time and properly take care of your house.
“Some tenants have a lot of children or even pets that cause damage to your property. Have a limit for the number of people your house is likely to accommodate and stick to it or you will incur losses from renovating for the damages that tenants make,” says Kiganda.
Have a clearly defined standard for the type of tenant you want to be part of your community. Professional people are usually more preferable because they will get ashamed if they are thrown out of a rental over defaulting which is not the case with people who are not professional.
As a new landlord, you should look beyond just having your house rented out. Look out for extra income opportunities that could improve your property’s return on your investment.
You can also rent out any unused shed to a person that may want it for instance. Also, according to Tito Odoi, the director Globe Property Management Services, owning land along a highway or in any other strategic location can be lucrative.
It can serve as a prime locale for companies to erect billboards, network mast base stations. Payments to landowners will vary wildly, depending on the size of the sign, current advertising rates, traffic counts, and numerous other factors.
He says: “If you are not yet sure of what you want to use it for, you can get advertisers put up billboards on the land and charge them. This type of business can earn you millions over a long period of time more than just focusing on the rental houses.”
Renovations that matter
Making house renovations may help you get another tenant immediately but Odoi advises new landlords not to invest in renovations that will not produce higher rent.
“The renovations may not lead to a higher rent to justify the expenses.
“Depending on the location, it may be hard to find a person who is willing to pay a higher rent to make the renovations worth it. Capitalize only on to those renovations that matter,” Odoi says.
If you think you will not be able to manage this property, you can hire a property manager to do it on your behalf.
Ensure that you have a good agreement clarifying his specific roles to the property and what percentage he is entitled to earn after collecting rent for you.
He says, “Property management companies take care of buildings as well as empty spaces.
A manager will ensure that the property boundaries are maintained and slashing bushes. For a rentable property, he collects rent, pay utilities, make repairs and superintends the property on your behalf.”