Real estate investments account for $9 billion of all of the investments made in the country every single year. One of the reasons this number is so big is that many people choose to manage multiple properties, multiplying the amount of money they can make in the industry. As you take your property investments to the next level, there are a lot of ways that this can go wrong.
Being clever and organized are the keys to managing multiple properties. Here are 11 tried and true methods for keeping your properties in order.
1. Market Smart
If you want to be able to juggle multiple properties at once, you need to have an overarching theme. You need to make sure that when people see any of these properties, they see a recognizable brand. A strong marketing strategy will ensure that you have as few vacant properties available at any given point.
Think about who your target market is and where they’ll be looking for homes. If you’re in an older market, they might not be looking at the coolest new listing sites. They might be using a local paper that you’ve never heard of.
Make sure that you take an approach that considers all of the potential channels for advertising. Believe it or not, older people are on Facebook a lot more than younger people. Targeting toward a younger audience might require you to sign up for an app, website, or start promoting your properties on Instagram.
Your strategy, as well as your brand, needs to match the audience that you’re aiming for. Figure out what sets you apart and lean into that.
2. Maintain Your Properties
Your properties need to speak for themselves. When people visit the properties and neighborhoods where you own, they need to walk away with a sense that you’re a good caretaker.
Whether you’re looking to sell, rent, or deal with investors, you need to show that there’s a handle on repairs and maintenance. Dealing with them as soon as they’re identified is the key. If work needs to be done constantly, hire a full-time handyman or supervisor to take care of things.
You need a Rolodex chockful of local roofers, painters, electricians, and HVAC specialists. Many real estate investors or property owners will buy a company like this or else start by running a company in these industries. When looking to manage multiple properties, you have to be savvy to survive.
3. Screen Your Tenants Carefully
Before you allow anyone to sign a lease, you should do the due diligence of screening tenants carefully. If you don’t screen your tenants, you risk getting new tenants who tear your property apart. Undesirable candidates won’t be able to pay on time, will tear up your floors, or invite vermin into your buildings.
While pets can be a useful deterrent to mice and rodents, an improperly cared-for pet will do more harm than good.
Consider how many people will be living in your spaces as well. Renting out to individuals is easy, but once they start building families or cohabitating with roommates or partners, that multiplies your issues. That’s twice as many people using your plumbing and putting pressure on your electrical outlets.
Keep in mind that if the idea of people moving into your properties and making it their own is upsetting to you, you might be in the wrong industry. Even renters want to feel like the places they rent are their home. Make sure that you keep an open mind when screening your tenants.
4. Stay Friendly With Tenants
Even more important than screening your tenants is building relationships with them. Over time, these relationships will pay off. If they feel like they can turn to you with issues, they’re more likely to help you keep your properties in good condition.
If they feel harassed or irritated each time that they reach out to you, they’re not going to be willing to do it. They’ll try to come up with cheap or poor solutions for fixing issues that could become foundational.
You also need to stay kind and civil with tenants that you don’t like, respecting their legal rights. It’s also illegal to discriminate against tenants for any reason, so staying friendly means staying on the right side of the law. Keep things from being emotional, keep them professional, and you won’t have any issues with your tenants.
They might also spread the word to friends who are looking for a new place.
5. Stay Organized
Your calendar is everything when trying to manage multiple properties. Once you start managing more than a handful, it’s easy for them to start getting lost in the shuffle.
If you’re starting out on your own, it’s important to make regularly scheduled visits and inspections of your properties. Successful real estate investors keep track of things via a specific schedule in order to know what’s happening even at properties that seem just fine.
Showing management presence is important to many investors. It also gives the chance for landlords to speak directly with their tenants. This keeps small problems from growing and shows tenants that it’s possible to address their landlords directly to keep small issues from festering.
6. Hire Pros
While you might be a DIY type, don’t be afraid to have a backbench of professionals to help you out. Taking care of small issues is smart since most professionals will bill you a minimum of hours. However, more harm than good can come from trying to install complicated systems on your own.
There are a lot of legal issues to consider when you own property. Being properly insured, prepared, and up to code is not only good for your tenants but will protect you from lawsuits. The best way to protect yourself is to get some lawyers on your side as well.
Make sure you have a professional accountant once you start managing more than a few properties. Costs will start to pile up and so will your taxes. However, if you offset some of the taxes with what you’re spending out of pocket, you might be able to grow your business faster.
7. Go High Tech
There are a number of new ways for you to complete the many tasks that come with owning property. You no longer have to deal with mailed checks, key exchanges, or even traditional signing events. So many of these things can be done online and in ways that keep you more organized than ever.
Video technology allows you to see renderings of prospective properties, get virtual walkthroughs, and see a first-person view of what things look like. With instant messaging, you can keep an entire team connected. Using productivity tools, you can ensure that the work that needs to be done is properly organized and occurs in the order that is required.
VoIP technology means that a whole remote staff can be connected at little to no cost from their mobile devices. You can even virtually meet prospective tenants who might be moving from far away.
8. Focus on Customer Service
While being a landlord isn’t like any other kind of service job, you are providing a kind of service for your tenants. You’re giving them a place to live and helping to care for it so they don’t have to worry about the details. The reason that renting costs more than owning is that, over time, the repairs are covered in the rental fees.
It’s expected that tenants can call up property managers and have them handle major issues. You’re going to be dealing with people who see your properties as their home and sanctuary. While you may legally own them, they have a right to feel comfortable and relaxed in the space they’re leasing.
If you fail to take this into account as you manage multiple properties, you’re going to leave a bad taste in tenants’ mouth. Word travels faster than ever these days and the last thing you need to do is to end up high in google results for “bad landlords”.
9. Remain Communicative
A property manager is only as valuable as the channels of communication. If you can’t be at the beck and call of your tenants at all times, you need to have a number they can call. On top of that, you need to get back to their messages.
One of the best ways to deal with your tenants is to offer them a 24/7 line to call. Rather than leaving an answering machine message, having them speak to a live representative means they’ll feel listened to. Even if that person is answering from a remote location, the human contact will be meaningful.
During the holiday season or every six months, check in with tenants to see how they’re doing. Send a short note or a comment card to see how they think you’re doing. More communication is always better.
10. Consider Selling
While there’s a lot of money to be made in rental properties with more people renting than ever before, it’s not always worth the hassle. For some people, trying to manage multiple properties can become an albatross or a daily struggle. Rather than juggling these properties, perhaps selling some off could be helpful.
While there are tax consequences of selling off your portfolio, there are also tax issues with owning several properties. Also, consider your own retirement and future. You might want to have some passive income to count on when you’re older and looking for a relaxed retirement.
However, selling off can also reduce your exposure to risk. If you don’t think you could bear another major real estate dip or recession, consider selling now. Not only do you insulate yourself from risk, but you also ensure that you can tune out when news about real estate comes on the airwaves.
11. Open an LLC
One of the ways you can expose yourself to risk is by entangling your personal funds with your rental property funds. If you open an LLC, you can insulate yourself against any lawsuits or tax issues. With an LLC for each property, you can manage multiple properties in different states without having to file a ton of paperwork.
Some families do this as part of retirement funding. This can simplify your investments when you need to make decisions in the future.
An LLC creates shares rather than requiring you to sell off or transfer ownership of property. Giving everyone an interest in an LLC rather than handing off a single property can resolve lots of family disputes.
Turning your property over to one person is going to cause a lot of unintended drama, especially unwanted after a death. Shares of an LLC protects from marital claims and creditors as well. Shares can be transferred throughout your lifetime as well if someone else passes away, gets married, or has children.
That’s how people build lifelong legacies with the properties that they own. You’re not looking to manage multiple properties just for the fun of it anyway. It’s likely you’re thinking of providing for your family and this is one of the best ways to do it.
Manage Multiple Properties With Ease
If you want to manage multiple properties with ease, make sure that you choose good people to work with. The team you get in your corner will make all of the difference when it comes to building your empire. Rely on the assistance of real professionals and you’ll keep your tenants happy while building a powerful real estate brand.
For a refresher on your investments, check out our guide on smart ways to invest.