Property Management Advice

Tips for getting into property management

Getting into business of any kind obviously requires a fair amount of risk. But risk and reward go hand in hand in the real world, so why not dive in and try your hand at property management? But before you take the plunge, bear in mind two things: there are a lot of sharks out there, and common sense goes a long way. Here's some property management advice.

Real estate gurus will advise to no end about getting rich quick, no down payment purchases, and how many properties they own in how many states. If you see a book written by a real estate investor photographed next to a Bentley and a private jet, take this advice - don't take his advice.

But getting into property management is still a good thing to do with your money. Perhaps riskier than securities and bonds, but it can pay off. For starters, run through this primer of oft-overlooked items before writing any checks:

Talk to rental agents. They'll be able to tell you what kind of rental properties go in the area you are considering.

Check the newspapers and classifieds for a nice cross-section of popular styles and lease offers. Since these are from established property management agencies, it can be considered pretty well-researched information.

Focuson well-kept properties. Unless you are especially handy or have extra funds to take your time fixing it, it is just going to cost you. A sloppy appearance does not attract renters and will obviously lower the rental value.

When looking at specific properties, be sure the local rules and covenants allow renters. Wasting time investigating a property that prohibits renting would be costly, indeed.

Notify your homeowner's insurance agency and let them know you'll be renting - often there are special prices for landlords.

Get professional financial advice on the expected return from your property management upstart. You'll want an experienced mind on hand to calculate the price and maintenance versus revenue.

All this may seem terribly obvious, but it is a good start. After getting a feel for the market, decide if it is a plausible option for you. There are a number of property management software programs to facilitate record keeping. The rest is up to you and your nest egg.

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