For many real estate investors, the selection and purchase of a property is just the first step in their journey. Doing the research, looking at places and making bids can seem like a lot of work but what makes the difference is how you decide to manage your new properties.
Table of Contents - Step by Step Guide to Property Management
Many investors prefer to simply outsource property management to a third party, which is a completely reasonable thing to do. It can reduce the number of headaches that you have to deal with and can lead to happier tenants. For other rental property owners, the responsibility of property management will fall back on them as landlords. They’ll be the ones called if the hot water gets shut off or if the power goes out and should be prepared to know what to do. For investors who don’t mind this aspect of real estate, doing it yourself can save money.
Outsourcing property management as an investor
As noted, one option is to simply enlist a property management firm. Whether you have a residential or a commercial rental property, you can rest assured that there’s a property management firm in your province that will get the job done. Property management firms handle everything from financial management to building operations to emergency repairs, leaving you free to focus on your other endeavours—and sleep soundly, knowing that your properties and tenants are - in the hands of a trusted partner that you’ve personally selected. Some property management firms even use software that investors can also track vacancies, rent payments and many more metrics.
Becoming a property manager
If you’re interested in becoming a property manager, then the following steps can help you understand what goes into the process. Many managers might choose to specifically focus on either residential or commercial management, but it isn’t exactly necessary to focus on one or the other—although it might help make your business more streamlined. There are also some start-up funds associated with starting your own property management enterprise, so be sure that you have some money on hand or can arrange some sort of loan if you want to dip your toe into these waters.
Evaluate your skills
Property managers require a suite of both hard and soft skills that other jobs do not require, so you want to take a close look to determine where you excel and where you need help. Managers should have good people skills to help them build up trust and rapport with tenants, law enforcement, vendors and maintenance contractors in their areas. They should also constantly be looking to network with vendors and contractors since these connections can help save valuable dollars and cents for property owners—an attractive quality for them to notice.
This is not to say that property managers should be expected to outsource repairs to maintenance contractors regularly. On the contrary, property managers should be expected to perform regular maintenance and minor repairs consistently. Most property owners will quickly grow tired of a manager who needs to spend hundreds of dollars every time a faucet leaks or a toilet clogs, so brush up on your maintenance skills and even take some courses if you need to. You’ll be positioning yourself as a capable manager who can stay cool and collected when things go wrong, and property owners will know that you can be trusted to respond accordingly.
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Evaluate your finances
As noted above, aspiring property managers should be ready to have some cash on hand to sink into their startup costs. Any business is going to require capital upfront, and property management is no different. However, the startup costs that are associated with property managers are surprisingly low. First, you should check with your province and local governments about any sort of licensing or certification that you might need. You want to make sure that you comply with these regulations before you even get started, which can cost some money that you should view as an investment in your career.
The financial side can be varied and change drastically on a case by case basis. Property manager pay can be quite competitive, but the money upfront will help springboard you into a more lucrative part of the business. You want to evaluate the types of services that you’re willing to offer as a manager, then evaluate what supplies and training you’ll need to pay for to make that a reality.
Think of how to pitch yourself
If you’re an aspiring property manager, one of your biggest challenges is going to be how to market and brand yourself. One way that you can easily do this is to serve as a geographic “boundary-breaker.” Some laws help govern foreign investment in Canada, but you can serve as a bit of a guide for foreign investors from the United States and beyond. If someone from Florida travels to your province and decides it’s a great opportunity to invest, they likely don’t know an awful lot about the market, the weather and a host of other factors. That’s your opportunity to present yourself as a local liaison—you can ease their minds with your knowledge of local laws and regulations, to say nothing of how best to prepare and maintain their rental property during Canadian winters that can grow quite harsh, depending on where in the country you’re located.
Property management is a competitive field, but it can be one that provides a good living to the right people. If you think that it might be for you, then there are a few things that you can do to position yourself in a good way. Brush up on your basic maintenance skills and be prepared to encounter some challenging repair situations. Research local laws and regulations so that you can serve as good counsel to property owners, and always do your best to be a people person who can create and maintain relationships with several stakeholders.
7 Tips For Managing Rental Properties
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