Investing in rental housing is a great way to grow your wealth. However, many real estate investors fail to recognize the amount of work and overhead costs that go into managing this type of property. Even if you only rent out a couple of units in a building that you personally occupy, you need to take an organized approach to managing your rentals. Here are some important things that you need to do to make the most of your multifamily investment.
Arrange for Preventive Maintenance on HVAC Units
In warm weather regions, repairing or replacing units’ HVAC system is one of the biggest expenses that multifamily property owners commonly have to deal with. When a system suddenly stops working, the onus is on landlords to coordinate timely repairs. Of course, paying for emergency repair services can be pretty costly. In the case of very old HVAC systems, investing in repairs may not be cost-effective. Newer systems have better performance and useful lifespans. They can also make apartments more energy efficient.
One of the best ways to spare yourself from replacing a system sooner than necessary or footing the bill for big repairs is to stay on top of preventive maintenance. Having a technician clean an air handler helps to keep a system working well and can prevent mechanical failures.
Don’t leave it to your tenants to tell you when a system needs cleaning. They don’t own the HVAC, so keeping it well-maintained probably isn’t a priority to them. In fact, a lot of renters are loath to bother their landlords with anything unless it requires urgent attention. Take charge of scheduling preventive maintenance with a company that services HVAC in Tampa. A knowledgeable technician can clean and calibrate every HVAC unit in your building on a fixed schedule.
Bid Out Service Contracts Before You Renew Them
Keeping costs down makes your rental activities as lucrative as possible. To get good deals on important services, you have to shop competitively. Don’t let contracts with service providers auto-renew simply because you think you’re already getting a good deal. Seeing what else is out there could get you more competitive rates on some of your operating budget’s bigger line items.
At least two or three months before a contract is going to expire, you should start bidding it out. You might find sizable savings on expenses like waste collection, landscaping, or access controls.
Safeguard Your Investment With Insurance
Comprehensive insurance coverage is an indispensable way to mitigate your financial risk exposure as a rental property owner. Bear in mind that your exposure extends far beyond simple property damage. The cost of a single liability claim could easily exceed the total volume of profits that a rental unit could generate over several years’ time. To make well-informed decisions about what you need to do to protect yourself, it is imperative that you understand the distinction between different types of coverage. Study policies in detail to identify exclusions and address possible gaps.
In addition to maintaining your own coverage, it is a good practice to require lessees to carry renter’s insurance. Incorporating a clause about insurance into your rental agreement will help to ensure that renters will be capable of providing you with a remedy in the event that they cause damage to your property or another renter’s property.
Consider Bringing in Reinforcements
Some multifamily owners find it advantageous to establish working relationships with professional property managers. Having a property manager oversee leasing and maintenance tasks can take a lot of the legwork out of multifamily ownership. You can customize a service plan to meet your unique needs, so it may be possible to avoid paying for more service than you actually require. For example, you can take care of leasing activities yourself and leave rent collection tasks up to a manager.
One advantage of working with a professional property management company that handles rental units is that it can help you steer clear of legal landmines in landlord-tenant relationships. A certified manager should have a thorough understanding of applicable law in your jurisdiction and your duties as a landlord. With professional guidance, you can ensure that all of your legal notices to tenants, the way that you handle maintenance issues, and your responses to requests for reasonable accommodation are all consistent with the law.
With the demand for affordable rental housing on the rise, a multifamily investment could be a great decision. Ultimately, good management practices will help you maximize the return on your investment. .