The rental market is back in action. Post-pandemic, people are all prepared to work from the office and are relocating back to the metropolises. And a fun fact, renters account for more than 44 million households in the United States.
The present asking for rent is 77.1% more than the 2020 US median gross rent. While this is a great opportunity for property owners, managing multiple properties manually can be a hassle. This quick guide on rental property management, ensures that you’ve got nothing to worry about.
Property managers have a lot going on—thinking strategically, sketching out marketing plans, and achieving target objectives. But handling your properties requires more than just skills and here’s where technology comes to your aid. Let’s get into the most powerful tricks you need to handle your rentals.
What is Rental Property Management?
Rental Property Management is when a third party handles the everyday operations of a portfolio of residential/commercial real estate assets. One of the primary aims of property management is to maintain a healthy profit margin while ensuring tenant happiness and retention.
Property Management is a booming field. The US Property Management market generates an annual revenue of 99 billion dollars and offers a mean monthly rate of $1295. While the market size of the real estate industry in India was worth 120 billion U.S. dollars in 2017 and is estimated to reach close to one trillion dollars by 2030.
To make the most of this opportunity, property managers take up the responsibilities of marketing and advertising the properties which ensures it’s rented. The job description also requires property managers to:
- Collect rent
- Handle taxes
- Draft, sign, renew, and manage leases
- Arrange for property repairs
- Constantly communicate with the landlord
- Set up budgets for maintenance and repairs
- Ensure compliance with laws and safety regulations
- Screen tenants
Which requires a mix of soft skills and hard skills, including:
- Being good with people so that you can handle issues with the tenants easily.
- Marketing skills to increase your property’s visibility.
- Financial skills to manage the budget and keep track of accounts.
- Knowledge of relevant laws, licenses, and potential legal issues.
Along with these skills, rental property managers need to first understand the different types of properties, build a buyer persona for each, and know the pros and cons of each listing.
Types of Rental Properties
Be familiar with the different types of rental housing properties that exist! Before considering factors like geography, population level, population income, and convenience, you must consider what properties are eyed by potential tenants.
You have residential types, such as:
- Single-family homes: Generally referred to as bungalows or independent houses, these houses don’t share walls with the neighbours. They have open spaces outside the house and are often more spacious. They are usually rented out to a single family, but groups of bachelors can be considered as tenants if they fit your bill. A few downsides to such properties include suburban locations and higher maintenance fees.
- Condominiums: Mainly refer to apartment complexes. These offer much flexibility to the tenant and are often located in prime spots close to the hustle and bustle. Condos have more restrictions than independent houses but offer more excellent amenities as a trade-off. Most condos are equipped with pools, gyms, clubhouses, party halls, etc. The space might concern large families, but it should be appropriate for families or groups of 1-4 people.
- Multi-family homes: These include side-by-side or up-and-down duplexes and triplexes. Renting out a multi-family home is more attractive due to the larger rent that can be collected. However, it can become an issue if the families don’t agree with each other. In such cases, it will come down to the landlord or the property manager to solve the dispute.
Commercial rental properties include:
- Retail: Retail properties have rooms that are rented to companies that conduct direct sales to customers from a storefront. Owning and managing retail properties can be a challenge as the revenue is directed through sales, but with the right positioning, sales could drive massive revenue numbers.
- Industrial: For their operations to get off the ground, warehouses that deal with heavy manufacturing, light assembly, bulk storage, and flex industry need a commercial space. Industrial properties can boom when there’s a good balance of supply and demand for the product sold, so understanding the market and its requirements is crucial here. Industrial property challenges involve the complexity of the industry, from the ever-changing regulations and environmental requirements to the need to ensure that the property is maintained and kept up to date.
- Office: Office spaces are the places where people work. Plain and simple. You can have various sizes of offices based on the team size, project size, project requirements, company purpose, etc. With a growing workforce and certain sectors that are blossoming currently, picking office spaces in well-connected locations can be advantageous. There are challenges that vary from finding the right location and size, to managing the costs associated with leasing or purchasing a space.
- Hotels: When you go on holiday, here’s where you arrive, right? Hotels are an important property type that consists of places where people can stay the night and live at a home away from home. Tourist locations, business-driven cities, and overall “happening” places are good locations for investment in hotels. The ever-changing nature of the hospitality industry and the increasing costs of purchasing and maintaining real estate can make it difficult for hotels to acquire the best sites and remain profitable.
Commercial rental properties present unique challenges to property management, such as maintaining tenant satisfaction, responding to tenant complaints, and ensuring compliance with applicable regulations. So, let’s understand some of these challenges in detail.
Challenges of Property Management
1. Increasing Revenue
Increasing revenue can become a challenge when there are so many costs involved in managing a property. Maintenance, marketing, remodeling, renovating, etc., can create problems with the profit margins, and the revenue would have to be boosted to see an increase in profit.
The only way to increase revenue is to manage and monitor your sales and activities better. For example, Rohan Builders managers to boost their overall sales by 54% by improving lead tracking and automating their sales process. It’s all about utilizing data to understand what works and what doesn’t.
“If tracking is important for your business, then I’d definitely recommend a Real Estate CRM like LeadSquared. We are able to know exactly what the lead is doing on our website: such as the floor plan he has seen, or the financial plan he is interested in. All this ensures a more personalized selling experience, which in turn boosts sales revenue.”Javadd Khan, Marketing manager, Rohan Builders
2. Property Listing
It takes time to manually update vacancy and occupancy information for each of your properties. But these activities are essential to market availability and showcase opportunities.
If listing properties slow you down, you can utilize an inventory management tool to automate this process.
[Also read: The real estate inventory management guide to learn more about efficient property listing and handling tricks.]
3. Tenant Operations
Tenant operations is the process of managing a property that is leased or rented out to tenants. This can include duties such as collecting rent, responding to maintenance requests, and enforcing the terms of the lease. Tenants are the daily headache of every property manager. But without them, there’s no business.
It can be a tough job to manage tenants because they may not always pay their rent on time or may violate the terms of their lease, requiring the landlord or property manager to take action. Additionally, it can be difficult to manage multiple tenants at once, as each tenant has different needs and may require different attention.
4. Time Management
Running between properties, virtually or in person, is always a struggle. You must ensure that each of your properties is in tip-top shape and that their sales and marketing efforts are running at full speed. You can miss out on leads and deals without adequate time management.
5. Safety Concerns
Property managers must ensure that their properties meet safety guidelines and are equipped with adequate measures to tackle an emergency. Some safety measures, that are a must, include:
- Smoke detectors
- Fire alarms
- Circuit breakers
- Insulated wires
- Pressure-resistant piping
Steps to Manage Rental Properties Effectively
Step 1: The Beginning.
It’s essential to have a property to manage before getting into property management. This probably would have been the obvious first step. However, scouting for properties, finding landlords who’d like to hire a property manager, and putting yourself out there are tasks you need to perform beforehand. You’ll also need to ensure you have an appropriate business license.
The first few tasks on your list are now to advertise the property on various channels. You can leverage ad campaigns, organic website leads, and social media campaigns, and even cleverly use your social media handles to direct traffic to your property’s landing page. Once you’ve generated the right leads, you’ll need a tool to manage them and ensure you aren’t missing on any site visits. LeadSquared’s sales and marketing CRM can help you out here! Learn everything about your property and ensure that you’re setting a competitive rent amount considering location, size, amenities, and facilities.
Step 2: Yay, Tenants!
The rental property market is booming as the number of tenants increase. And now, you have capitalized on this trend and procured a tenant(s) for your property! That’s a great direction we’re moving in.
Treat your tenants well. It’s essential to build good relationships with them and improve your people skills to avoid miscommunications and mishaps. Be proactive, respond to their concerns, and ensure their issues are fixed. Unhappy tenants will make your job much harder and may even result in your reputation taking a hit.
Communicate clearly and regularly with your tenants. Inform them before entering the premises, provide convenient payment options, and explicitly lay out rules and regulations.
It also depends on whether your property is a long-term rental or a short-term rental. Short-term rentals call for frequent rotation of tenants, whereas long-term rentals create stability but slow cash flow. Select the right tenant based on your property type and conduct thorough screenings to ensure you pick the right people. If it’s all good, sign that lease!
Step 3: Maintenance and Repairs.
What did we say? Treat your tenants well. And this means that the property needs regular upkeep and maintenance. Before a tenant moves into your rental property, you must ensure that all the facilities and amenities are working perfectly and that damage (If any) is immediately fixed. Here are a few things to keep in mind:
- Maintain quality! Get leaky pipes fixed and broken furniture replaced, and please let there be no water dripping from the ceilings.
- Safety features are a must, so invest in smoke detectors, fire alarms, electric circuit breakers, and fire extinguishers.
- If possible, have hired personnel to help tenants as and when they need help. These include plumbers, electricians, maintenance workers, etc.
Also, when a tenant moves out, you can upgrade/overhaul your property. Install more premium appliances or services, and you could raise the rent for future tenants. Also, invest in beautifying the living environment. A splash of paint, a potted plant, or an aesthetic false ceiling significantly increases ambiance and improves the overall living experience.
Step 4: Documentation, Taxation.
Dealing with money and finance is a rollercoaster, but if appropriately done can bring in reasonable remuneration without the stress. Remember to maintain an explicit lease agreement so the tenants know precisely what rent amount to pay and when. Ensure that this cash flow is regular and document the payments well so it becomes easier to account for this money during tax calculations.
All you need to do to avoid the stress of financial planning and management is
- Make a proper cash flow account to understand your income through rent and how much you need to spend on repairs and maintenance.
- Learn how the tax is calculated on your property and how much you will have to pay.
- Make a note of any claims you may be eligible to avail so that you can save money.
- Hire an accountant if you need to, but ensure you methodically keep track of your finances to avoid stress and be thorough with the numbers in your bank account.
Step 5: When Push Comes to Shove.
We hope it doesn’t have to come to this, but here’s what needs to be done if you need to evict a tenant. Some of the grounds for eviction of a tenant are:
- Causing destruction or damage to property
- Renting out the property without the landlord’s permission
- Construction of a new property on the same land
- Requirement of property for the landlord’s purpose
- Multiple complaints against the tenant
- Illegal activities occurring on property grounds
In these cases, an eviction notice must be sent to the tenant. If the tenant does not vacate after the notice is issued, a lawsuit may be filed, and the case may be taken to court. T A tenant needs to be provided with an eviction notice, and legal proceedings must be followed in these circumstances.
Step 6: Let the Computer Handle it.
Try a rental property management software to help you scale up and handle multiple properties at once. It helps you:
- Collect rent automatically
- Maintain a forum for tenant complaints and concerns
- List currently vacant properties
- Manage leads from multiple sources and more
Phew, that’s a lot of work for a person. Luckily, a CRM tool can help with this.
For a comprehensive overview of rental property sales and marketing, take a look at our Real Estate Sales and Marketing Playbook. From understanding the sales pipeline to converting leads into tenants, it contains all the information you need to succeed.
With LeadSquared, you can keep track of your entire sales process in real-time and make sure you don’t miss out on any potential customers. With no downside and lots of value to gain, our eBook is a must-have for anyone in the real estate industry.
How to choose the right Property Management tool?
We’ve gone over several tips and tricks for handling rental properties and have name-dropped our tool multiple times. But what do you need to look for while choosing the appropriate software?
A good property management tool can:
1. Automate your Workflows
Manual work is a thing of the past. Everything that you do can be automated, as it should. From lead capture to lead distribution, tackle your inquiries automatically and focus on the pipeline. A good tool should have easy-to-use automation that is rigorous but convenient to set up. They should be flexible enough to customize according to the process. With a comprehensive Property Management tool, handling leads needs to be hassle-free.
2. Nurture, Score, and Qualify Leads
Using marketing automation for lead nurturing has been shown to increase qualified leads by 451%. 57% of marketers feel that the most significant part of automation software is lead nurturing. If you use the right CRM, you may connect with your clients based on how they interact with your campaigns.
Your sales staff must identify ideal opportunities for completing real estate deals. You can determine what counts as a high-quality lead with the perfect CRM. The algorithm rates and grades each lead according to your chosen metrics, and then the sales staff knows which lead to contact first or arrange site visits with.
3. Aid in your Marketing Efforts
Landing pages and email campaigns are vital in bringing your properties closer to the public. Accessible drag-and-drop landing pages allow you to create engaging portals for your prospects to make inquiries while giving you the data you need. Ready-to-use templates make creating attractive landing pages and emails easier to capture interest faster and seal more deals.
This is especially crucial if your business consistently runs several marketing initiatives across various channels. Making landing pages for each project or property can take some time; hence, a built-in landing page tool that enables you to develop adaptable landing pages for your campaigns easily is essential.
4. Provide powerful PropTech Capabilities
PropTech is the future of real estate, blending property management with cutting-edge modern technology. The tool that you use needs to be ready to tackle the culture of today, and stand out against competition.
Get an idea of what PropTech is, and how it can affect your real estate business in this article about the digital revolution coming to real estate.
Learn how Stallions is using LeadSquared to cater to all their sales processes.
Stallion is a PropTech pioneer, providing innovative solutions for the real estate industry. The company specializes in providing cloud-based solutions for property management, as well as solutions for data-driven decision-making. Stallion also offers a suite of sales solutions, including a mobile platform that enables agents to manage their entire sales process from a single app.
Implementing LeadSquared has been a game-changer for Stallions, as it has enabled them to automate their sales processes, track key metrics, and improve their customer service.
|Capturing and sorting leads from different platforms.||It’s effortless to link any external application to accumulate leads with the help of Integrations and API capabilities.||Shorter TAT and faster closures|
|Analyzing sales performance and correcting drop-off points.||Provide complete stats/metrics to identify issues, retest campaigns & provide feedback.||Making team performance more efficient with full activity tracking.|
|Reduce manual sales processes.||Automated workflows allow for 10-15 checkpoints, such as site visits, on-field orientation, deal closed, and disbursement, to take place in the background.||Allowed for mundane work to be taken care of without manual labor and improved sales productivity.|
“Real-estate-specific software focuses on the developers and their needs. They aren’t accommodating to us, who needed something to create a good sales pipeline. We required something to help manage leads, sales, and customers, and by far, LeadSquared has been the best in this domain.”Pratik Jain, CEO, and Founder, Stallions.
We hope this article gave you a glimpse of what rental property management is and how you can take the necessary steps to become a successful property manager. And for property managing companies that want to see better returns on their real estate investments, we have just the solution for you.
LeadSquared’s Real Estate CRM can help your agency automatically capture leads from all sources, deal with inquiries from any channel, reduce response time, and build lasting relationships with your future tenants. With LeadSquared, you can quickly scale up your property managing endeavors and onboard multiple properties and tenants. It is the complete Rental Property Management tool.