Rental property life cycle
As most property owners will confirm, the road to successful investment property management is not easy. If you are one of those that considering acquiring an investment, it can be quite daunting. However, it all comes down to how well educated you are on investment property issues. One of the most important aspects that you need to have a firm grasp on is the rental property life cycle. Let us commence by investigating the two fundamental aspects of a rental property life cycle.
1. Turnover period
To start with we will take a closer look at the turnover process. Simply put, the turnover period represents the time when a rental property lies idle. We can also define it as the time in between tenants. This scenario can be brought about as a result of tenants not renewing their lease. It can also come about due to a failed tenancy agreement and one of the parties requesting to cancel the lease. Regardless of the circumstances, a turnover period is not an ideal situation for any investment property owner. Moreover, it represents a loss in rental revenue, which can be a huge problem if it is meant to a service a mortgage. As such it will have an adverse impact on your cash income and outflow.
One of the most important considerations for you as a property owner is maintenance. Prior to advertising and leasing your property you must ensure that your property is habitable. Firstly, it is your legal obligation to ensure that you address any issues that make your property uninhabitable. Secondly, not carrying out through maintenance will adversely affect your rent rate. It is highly recommended to make certain your property is in excellent condition thus generating the right interest. Moreover, when your property is well looked after the more likely you are to charge premium rentals.
To start with, the strategic management of the leasing phase is crucial to successful property management. Two of the tools that aid in this process include effective landlord-tenant communication, as well as setting realistic and practical targets. Successful implementation of both will ensure the long-term success of your investment.
2. Tenancy period
Most investment property owners consider their landlord responsibilities to be over once tenants have moved in. However, this is a great misconception that has put a lot of landlords is huge problems. The duties and responsibilities of a landlord go beyond just merely receiving monthly rentals. In as much as your property constitutes an investment, it is also your tenants home. As such the way you manage it and interact with your tenants is very important.
a. Routine tasks
Primarily there are two issues that fall under routine tasks. These are maintenance as well as rent collection. Both tasks can be undertaken on an individual basis or you can engage a property manager or management agency to handle it on your behalf. Maintenance issues are generally unforeseen and therefore difficult to plan for. However, regular inspections and checks can help to address any issues before they escalate. In addition, timely and quick responses to any issues are essential to building great landlord-tenant relations.
b. Issues that require prior notice
There are certain circumstances under which a landlord is compelled by law to give the tenant prior notice.
1. Lease renewal
In the event that you do not wish to renew your tenants least, it is common practice to give them at least 60 days advance notice. This accords your tenants a mole time to make alternative arrangements. Likewise, tenants that do not wish to renew their lease or want to terminate it are obligated to provide the landlord sufficient notice.
2. Rental increments
Another scenario that requires the provision of advance notice pertains to a rental increment. In most instances, landlords will increase rentals prior to the commencement of the next lease cycle. Under such circumstances, the landlord is also required to provide the tenant with sufficient notice.
In conclusion, property life cycles become relatively easy to comprehend and manage with time and experience. All in all you, a landlord must display great social and people management skills. In addition, they need to be diligent and be able to undertake a lot of groundwork. Moreover, you could simply retain the services of a competent and experienced property manager or agency.