You may have spent plenty of time researching the basics of being a landlord, but one thing you might overlook in the flurry of activity that comes with a new business venture is how to set yourself up for long-term success. It's hard to look past all the short-term tasks that need to be done, and take a look at the big picture. However, planning for long-term success is essential if you want to move from owning a property or two to achieving financial independence through property management.
The first step is to build a strong foundation with your property management business. You're starting out with a single property, but you want to establish yourself with as much future-proofing as possible when it comes to your business processes. A thorough business plan helps you establish exactly what you're looking for in the short, medium, and long term for your business. You'll have a reference document to go back to as you grow your property management company.
It's important to look for opportunities to streamline your business processes before they become an issue. One of the biggest problems a property manager faces is being overwhelmed by the amount of work they have to put in once their business is successful and begins growing. Look at services that provide you with ways to cut down on the amount of hands-on time you spend, such as contracting a handyman for your maintenance, or looking at software solutions to help you accept rental payments from your tenants online.
Take a hard look at the long-term prospects in your geographic location. Some areas are rapidly growing thanks to nearby businesses, revival projects and gentrification. Other areas are on a downslide, meaning that you're facing decreasing rent and properties that aren't going to retain their overall value. Set yourself up in geographic locations that are poised to grow, or are currently experiencing growth, when you look at new properties. Understand what your potential tenants are looking for in an area, and how best to provide them with the living situation that meets their personal needs.
Understanding how to establish quality landlord-tenant relations is another way to set yourself up for long-term success. When you have happy tenants, you end up getting quality referrals when it's time for them to move away and buy their own house. You want to cultivate long-term tenants instead of cycling people in and out of the property on a regular basis.
The other side of the landlord-tenant coin is to not wait to take legal action if you're dealing with a situation such as a non-paying tenant or one who is damaging the property. The eviction process is not particularly complicated in a non-payment situation, and you don't want to lose money on a property while a n on-paying tenant makes plenty of excuses.
Once you've spent some time growing your property management business, revisit your original business plan. Don't be afraid to alter some short, medium, and long-term goals to better reflect the situation you're in, the growth rate you face, and the struggles you have overcome over the course of developing your business.
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