If you’ve just opened up your investment portfolio by purchasing a residential property, it’s time to learn how to manage it, to ensure you can expand on this kind of portfolio in the future. Because a real estate investment doesn’t take care of itself. There really are a lot of responsibilities on your plate now, and you’ve got to keep up with them in order to make any kind of real money here.
And if you’re not sure where to start with your new asset, we’ve collected a few starting points together below. Be sure to go through them before making any major moves with the house or apartment in question.
Maintenance is Number One
The first thing you’ll need to think about, in terms of property management, is how you’re going to both assess and take care of the maintenance needs. Sure, you’re not living in the house yourself, and maybe you’ve not decided quite what to do with it yet, but in order to make any money at all, it needs to be a place people want to live in!
Not to mention just how important it is to set up your reputation as a landlord. You need to be able to take care of your properties, to ensure your tenants are happy to stay with you and keep on paying rent, because a landlord with a high tenant turnover isn’t going to attract many more happy customers in the future… efficiency is the key.
Adjust to Tenant Expectations
Speaking of adjusting to tenant expectations, this is the second most important thing you’ll need to cross off your management list. Keeping your tenants as happy as possible is your number one responsibility as a landlord; performing regular maintenance, building your reputation, and being as personable and available as possible, are tasks all carried out in the name of keeping tenants happy enough to stay. Because one good tenant, with a sizable income, could feed you and your family (and your savings account) for years to come.
You need to be fast and efficient in the way you handle tenant expectations. You need to carry out maintenance and repair work as quickly as possible, so as not to interrupt their day. You need to think about the people who are going to be living together in your property complex, as pairing neighbours is another understated responsibility of yours too!
And most of all, you need to be fair, and non discriminatory – know the laws surrounding this, to ensure you’re never caught up in a court case you didn’t quite see coming. In the UK, there are some very clear laws surrounding this, which you can read up on right here.
If You Can’t Keep Up, Divide Your Assets
Managing property, when you’re not planning to live in the house you’ve bought, can be hard to do on your own – we’ve established that by the existence of this post altogether! And because of that, dividing your assets might be the key to regaining control and making the money you need out of the investment. And seeing as real estate is a valuable commodity, and the need for it will never dwindle away, you won’t run short of people willing to go halfsies!
For example, you could ‘share the freehold’ here, with a friend or family member you trust, or even just a tenant you really like and are willing to go the extra mile with. Because once somebody has got both the share of a freehold, and then you also have the lease agreement to abide by, you’re not the only one who is responsible for the property anymore – you all need to be in agreement if something is to occur, such as maintenance works. And if you need any more details on this, you can read this share of freehold explained article right here!
Ultimately, if you want to divide responsibility for your asset amongst two or more people (usually four), you can take out agreements like these. This is especially useful if you’re an owner of a block of flats, and you know there’s interest out there in this complex.
It’s All in the Financial Details
And of course, you’ve got the cash to worry about too. Namely, you’ve got taxes to pay, if you do decide to rent out your property, and these come round each and every year. You don’t want to fail to keep up with these in any shape or form, as they could make or break your profits margins, as well as ruin your reputation as legitimate landlord people ought to be renting from.
Of course, depending on where your property is, you’re going to have different kinds of tax to pay – if you’re in the UK, rental income counts towards your income tax total, and this is something every single earning person has to pay if they’re above a certain threshold. But what counts as rental income in this scenario? That’s something you definitely have to be clear on.
The bulk of your taxable income is going to be the rent itself, but it also consists of income from other things tenants have paid for over the year, such as bills or cleaning concerns, and even deposits on the property itself. However, if you’re worried about the amount of tax you’ll have to cope with here, remember that there are plenty of deductions you can take out too.
Managing Your Property: Is it as Hard as People Think?
Buying a house is something a lot of people dream of. However, if you’ve got the means to simply look for an investment property, because you’re looking to expand your financial horizons, you don’t need to worry too much about how you’re going to cope managing it. Most of all, you’ll just need to decide how you’re going to put this investment to best use; renting it out is usually the way forward, so keep the above tips in mind!
