Investing in real estate is one of the best ways to build wealth. Buy property in the right area, rent it to the right people, and you can easily generate a stream of passive revenue.
It all sounds so simple, but as any experienced property manager can tell you, property investing and property management are harder and more time-consuming than they seem. New landlords quickly get in over their heads as they scramble to find good tenants, keep their properties in good condition, and maintain all the necessary paperwork.
Thankfully, there are several strategies you can use to make property investing easier on yourself – without jeopardizing your profitability.
How to Make Property Investing Easier
These are some of the best strategies for making property investing easier:
- Work with a property management company. Consider working with a property management company. Property managers typically charge you a fixed amount per month, usually a percentage of your gross rent, and in exchange, they’ll take care of most property management responsibilities for you. They can handle marketing your property, screening new tenants, onboarding those tenants, collecting rent, dealing with issues, maintaining the property, and even evicting tenants if necessary. Though your property won’t be quite as profitable as it was before, you can unburden yourself with these responsibilities and more. Plus, you’ll have the reassurance that you’re working with real estate professionals who can help guide you to better decisions.
- Be choosy when adding new properties. New property investors are usually excited to expand their property portfolios quickly, but it’s typically better to be choosy when adding new properties. You should review several deals, passing on most of them, before you confidently add a new property to your holdings. This careful scrutiny will help you ensure that only the best, most efficient, most profitable properties enter your management.
- Diversify your property portfolio. Similarly, it’s a good idea to diversify your property portfolio. Invest in different types of properties in different areas; this way, if the real estate market undergoes a shift that impacts the performance of some of your properties, you’ll have supplemental sources of revenue to keep you afloat. This is a risk management strategy that can keep your portfolio thriving even during tough times.
- Proactively repair and maintain. Proactive and preventive maintenance are almost always cheaper and easier than making reactive repairs. That’s because if you allow certain problems to be neglected, they grow worse and more complicated. Proactively inspect your property regularly to remain on the lookout for potential issues, and fix those issues before they get any worse.
- Screen your tenants thoroughly. Vacancies are profitability killers, so it’s understandable why so many landlords are eager to get tenants in quickly. But if you rush too quickly, you could end up with a problematic tendency to make your life much more difficult. Instead, screen your tenants thoroughly and only accept the best candidates.
- Use a better software platform. The right property management software can make any landlord’s job much easier. It can automate rent collection, track your expenses, and even manage all your paperwork for you. Make sure you choose a platform that’s intuitive and usable so that both you and your tenants have a portal that exists as a net benefit.
- Automate what you can. Any manual effort you can automate is one less thing you need to worry about. Fortunately, most modern property management platforms have automation features that make automation easy. After choosing your settings, you can automate rent collection, repair requests, and much more.
- Practice positive conflict resolution. If and when conflicts arise in your property management approach, remain positive and work to resolve those conflicts as quickly and efficiently as possible. Work with your tenants to better understand their issues, practice active listening, and be willing to negotiate and compromise so that all parties are mutually satisfied with the outcome.
- Keep your tenants happy. It’s much less expensive and much easier to keep your current tenants than to try and track down new ones. Accordingly, if your tenants pay rent on time and respect your property, you should do whatever you can to keep them happy. Showing gratitude, sending small gifts, and taking care of issues quickly and resolutely can all improve your tenant retention.
- Learn from your mistakes. Finally, understand that all new landlords and property managers are going to make mistakes. Instead of dwelling on your mistakes or simply forgetting about them, it’s important to learn from them so that you can improve your approach in the future. Even small changes can accumulate to make a big difference.
Toward a Better Property Management Strategy
Because property investing is such a versatile and flexible strategy, you can practice it in many different ways. You don’t have to work with the property manager, nor do you have to buy properties in a specific neighborhood. That said, you’ll see greater profits and spend less time if you work actively to make property investment easier to manage.