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If you are looking to create a passive income source, generational wealth, or both, nothing does it better than real estate. However, it can be more challenging than it sounds. Especially if you are buying houses in different cities or even different countries, keeping a tab on things can get confusing and hectic.
Moreover, it’s important to note that while houses do provide an incremental increase in rental income over time, they also have increased maintenance costs. Once every decade or two, you might even have to redo the whole house. While these major overhauls won’t be too frequent in one person’s lifetime when you are in the real estate business and fishing for high-profit assets, chances are these homes are going to be relatively older and will need more of your attention to convert them into profitable rentals.If you are looking to create a passive income source, generational wealth, or both, nothing does it better than real estate. However, it can be more challenging than it sounds.Click To Tweet
However, thanks to developments in technology, communication, and the internet, things don’t have to be that complicated when it comes to managing your rental properties. Whether you are managing multiple properties within the same cities or a portfolio of international investments, here are a few tips to make life easier.
1. Improve Sales
One of the best ways to increase your problems and costs in the rental property business is by working with everyone and anyone that approaches you. Regardless of how small or large your property is, choosing the right tenants for the place will have a huge impact on the entire transaction. While having a look at their criminal record, performing a background check, and even looking at how effectively they have paid previous rentals will give you a good idea, it’s also about the kind of people you are renting your house out to. If you are renting your property out to a small business, you can be sure that they will be responsible for how they use the home, and you know it will be mostly used during the day. However, you also need to be aware that it will probably have a lot of people coming and going, and it might be illegal for you to be operating commercial activities in a residential area. It’s good to have a discussion with the potential tenant and get to know them and how they want to use the space.
Most people who rent out properties as a passive income source usually have a secondary day job or they might have a business of their own. Those that are in the real estate and rental business full time will have other projects on hand and multiple properties to deal with. In either case, it can be difficult to find the time to handle complaints from the tenant. Instead of managing your property entirely on your own, you could consider teaming up with a property management company that can handle some of the workload. Whether you need repair and maintenance work done, you are looking for a new tenant, or you need someone to help with rent collection and lease management, a specialized management company can help.
3. Provide Value
If you have been lucky enough to find a tenant who treats your property with respect, manages small problems on your behalf, and even pays you the rent on time, you need to improve your relationship with them so you can retain them longer. You need to look for ways to increase the value the tenant gets from renting your property rather than moving to a house down the road. These don’t have to be very expensive or elaborate things, simple things can go a long way. Maybe allowing them to have pets, allowing them to make minor modifications to their home to make it more comfortable for them, or maybe just sending them a little shopping voucher or some front row tickets to a new movie. The point is to show them that you value their stay with you and you are willing to go out of your way to make it a valuable relationship for both of you.
You could evaluate profitability in two ways when it comes to a rental asset. Either you are able to generate a higher rent from your asset, or it becomes easier and takes less work to generate the amount of money you are currently making. These strategies will help you achieve a bit of both depending on how you use them. Even as property prices soar, real estate is still a very profitable business, if you know how to manage it the right way.