Managing Your Real Estate Investment – Part 1
Veteran Investor, Gord Lemon reveals how to deal with maintenance issues to keep your ideal tenants happy.
~ From Canadian Real Estate Wealth Magazine
In a previous article, we discussed how to self-manage your investment property successfully highlighting the most effective strategies to selecting an ideal tenant. We also learned that by employing specific advertising techniques, posing key questions in your outgoing message, checking all references and having a rigorous but fair application process can yield you an ideal tenant. If your prospective tenant has passed all of the above categories, it is now time to move on to actually managing the tenant and the property.
In this article, we will cover a number of tenant management techniques and money-saving methods of renovating a vacant unit.
Maintenance and renovations
To attract and keep a quality tenant, it is imperative to maintain a quality unit. Many landlords make the mistake of barely fixing up or even cleaning a vacant unit and rely on the good faith of the inbound or outbound tenant to do so.
KNOW THIS >>>The No. 1 reason that tenants will vacate premises is due to the lack of response by the landlord to do repairs. It is clearly in the best interest of any landlord to repair or renovate a unit as it creates tenant satisfaction resulting in less vacancy, often allows you to increase the rental amount, not to mention most repairs are also tax-deductible.
Here are some issues to consider:
1. TYPE OF RENOVATIONS
The key to doing repairs in any situation, whether as a buy fix and sell or renovating a rental unit is to make sure that you are getting the best “bang for your buck.” You should be making approximately $2 for every $1 invested. Therefore, in the case of a rental, it is important to become familiar with the maximum rental amount your renovated unit will command considering the geographical area and age of the property.
It is imperative to check rental ads in your area for comparable units. In other words, if your rental unit is two-bedroom, one-bathroom, look for similar rental units in the same area in order to compare apples to apples. If you are still unclear as to the degree of renovation and the rental amount you can charge, you may want to respond to some rental ads yourself and go see some of the units available in your area. This will give you a visual on what the acceptable standard is, to what degree you must renovate and what you can charge once your unit is renovated.
It is critical to only renovate to the standard dictated by the area. Spending more money on your unit to make it ”best in the area” in order to demand the highest rent can often backfire. You must understand what the market will bear in relation to the neighbour¬hood your unit is in. In most cases, a clean, well-kept and modestly renovated unit will be more than satisfactory to give you top dollar for the area.
2. EXTERIOR OF THE PROPERTY
You must assess your property through the eyes of your potential tenant. As such, first impressions go a long way and the tenant’s first impression begins the moment they see the property from the outside. Therefore, nice landscaping is essential. A clean manicured lawn which is free of any garbage accom-panied by a few simple bushes and flowers will give an excellent first impression. Make sure the driveway is sealed and free of cracks. If it is winter, make sure all sidewalks and driveways are clear of snow and ice.
We will continue the unwritten rules of successful property management in Part 2 of Managing Your Real Estate Investment
If you’d like more info, to find out about training/coaching or to learn about how you can participate in cash flow real estate which provide above average returns, schedule a free 15 minute call by filling out the form below. And we assure you, no pressure or sales will accompany the call. Look forward to speaking with you!