TIP OF THE MONTH - January 2015
THE LANDLORDS HANDBOOK-2nd EDITION
Daniel Goodwin & Richard Risdorf
operating small investment properties has made many people financially
independent. As a real estate investor, you may have the pride of
ownership coupled with a hedge against inflation that serves to protect
your asset from losing value. As a property manager, your two chief concerns are: #1-maintain your property #2 increase its value.
Regardless of your specific goals, effective management
is the key to achieving them. Simply owning rental property will not
guarantee financial independence, because properties do not generate
cash flow by themselves. To make money, you need to know good
property management techniques. You need to know:
how to keep good tenants: how to collect the rent on time: how to
maintain: the physical structure of your property, and most
importantly, how to deal with people.
To some extent, owning your home has prepared you for
owning other buildings. However, managing rental property is not
the same as managing a home. For example, decorating schemes that
might be perfect for your home-especially colorful ones-could do not go
with a prospective tenant’s furniture. In apartments, carpeting
and wall treatments should be in neutral colors, and in materials that
are durable and easy to clean and maintain.
Kitchen appliances also are different for rental
properties as compared to home use. You may choose to buy a range
with added features for your home, but a tenant who does not cook will
not want to pay a premium rental for having it. Also, as a
property manager, you must be aware of depreciation-thus you might
choose a different water heater or furnace for a rental property than
you would for your own use.
This web page was updated on 01/05/2015.