Dawna is a real pro! I am so glad she was on our team. For nearly four years she guided us through the volatility of the San Luis Obispo housing market, answering our questions from a far (we live in Montana) and flagging appropriate properties or developments along the way. When the timing was right and we found just what we were looking for, Dawna expertly guided us through the negotiations and inspections. This wasn't our first home buying experience, but we really appreciated how easy Dawna and her assistant made the whole process. We successfully closed in less than 30 days.
1. Determine if you (owner) want to manage property: Landlords get calls at night, on holidays, and at other inconvenient times. Decide if you like working directly with tenants. If this is an experience you seek, get educated ASAP about property management in the state where you plan to own property. This is an expensive career if you intend to learn-as-you-go. Meet with real estate attorneys, look up real estate education websites, ask your local association of REALTORS® etc.
2. Determine if you want to hire a property manager: If you intend to hire a property manager, evaluate property management options in the neighborhood of the property. Be sure to check unconventional sources for referrals like landlord-tenant law attorneys, local CraigsList postings, Yelp reviews, and even opinions from moving companies.
3. Plan your rent increases in advance and stick to your plan (i.e. yearly). One of the easiest ways for a multifamily property to perform as expected is to consistently keep rents at market prices. This is also one of the easiest ways to increase and maintain your property value. Keep in mind that there may be state or local rent controls in place that may impact the amount/timing of your increases.
4. Don't be tempted to keep rents low: Maintaining less-than-market rents to keep tenants from complaining rarely works. In our experience, quality tenants will pay fair market rents for a clean well-maintained property and respectful treatment by a property manager/owner. In fact, expect 35-40% of your rental income to go towards property expenses and if you do not have enough income, the property may not have enough income to be properly maintained.
5. Keep all documents up to date: Update your applications, leases, and communication forms for current laws. Civil code sections have changed many times over the past century, but some forms currently in use by some landlords appear to be from the 1950s. Remember: just because it is on the internet, does not mean that the document is current. Take the time to look up your state’s Civil Code sections that pertain to landlord-tenant law, and consult periodically with legal advisors to review your documentation.