Real estate is always a smart investment. It follows, then, that having multiple properties is even smarter. Owning and renting multiple properties increases your income and gives you a certain level of security – even if there are issues with one of your properties, you’ll still have others to fall back on. You may think that managing multiple properties isn’t that different from dealing with a one tenant building. However, people who manage multiple tenant buildings face some unique challenges. If you’re thinking of renting out multiple properties or are already a landlord to people in multiple locations, then it is time to learn how best to handle this situation.
The challenges you will face if you manage multiple tenant buildings
There are three main aspects of managing a rental property:
- building management
- tenant management
- finance management
Building management includes making sure that everything in and around the building is in working order and dealing with any major repairs. Even though you are renting your property to others, you are still responsible for keeping it in good condition. Tenant management is all about dealing with the people renting your property. You have to find the right tenants, collect deposits and rent from them, keep track of when they’re moving in or out, and more. Finally, finance management is the aspect of your work that deals with money. This is where you sort out how much you’re charging, how much you’re spending and how you can maximize your profits.
When you have multiple properties, then you have to deal with all three of these challenges in multiple locations. You should be doing this on two different levels – individual and global. So you want to keep your eye on individual buildings (which property is turning a profit? which property needs repairs?), as well as the big picture, (are you earning money as a general rule, even if one of your properties is underperforming?).
Tips on how best to manage multiple tenant buildings
Managing multiple rentals means taking care of everything from contracting repairs to settling disputes with tenants in multiple locations at the same time. It sounds complicated, but if you do it right, you can turn an excellent profit from multiple rentals with relative ease.
1. Don't do it alone - delegate
The key to not getting overwhelmed by complex tasks is asking for help. You don’t have to manage everything about all your properties by yourself. With professional property management, you can relinquish some or all of your tasks or properties to experienced property managers you can trust. That way you can be sure that your buildings are being managed properly while also reducing the level of stress you’re under.
2. Establish good relationships
The biggest problems with managing several tenant buildings usually come from the tenants themselves. The key to avoiding such problems is having good relationships with your tenants. It all starts with finding the right people – you don’t want to let just anyone onto your property. Then, you must establish a relationship based on mutual respect and trust. You want to maintain your authority but still be friendly, polite, and professional. That way, your tenants will respect you as their landlord while still being able and willing to come to you at the first sign of problems. In most cases, such good relations result in being able to work out potential issues before they really happen.
3. Have a back-up plan
Even if you take all precautions, things sometimes go wrong. Although you’ll try to avoid it as much as possible, there’s a chance that you’ll have to evict some of your tenants. In such cases, it is always good to have a plan. Draft eviction notices, consult with lawyers, have a storage provider that can help out to put your tenant’s belongings away, study the rules and regulations on evictions carefully and, overall, just have a plan for the worst possible scenario.
The worst possible scenario, however, isn’t always about tenants. Things can happen to your properties too – natural disasters like flooding or accidents like fires could ruin you. To avoid that, always make sure that you are properly insured.
4. Communicate frequently and effectively
Things change all the time; both you and your tenants need to be ready for that. When change happens, however, it’s important that everyone is still on the same page. Make sure to communicate with your tenants about rent, inspections, house rules, and other relevant topics. Practice effective communication: be clear and concise. Make it obvious that you expect the same from your tenants if they will be late with the rent, need assistance with something, or plan on moving out.
5. Learn to prioritize
When you‘re managing multiple properties and tenants, it’s easy to get in over your head. There will always be something going on somewhere that requires your attention. You mustn’t let this overwhelm you or you’ll end up never getting anything done. Instead, it’s important to decide which tasks to focus on at the moment. Is there a tenant causing serious problems in one of your buildings? Is one of your properties in some kind of danger? Do you have issues collecting rent from someone? Are there any major repairs to do that will affect the quality of life for your tenants? These are the things you need to prioritize.
Sometimes, it’s a good idea to look into professional property management services for the most important aspects of rental management. When you don’t have to worry about your finances, for example, you can easily focus on other tasks.
Look at the big picture when you manage multiple tenant buildings, but don't lose the details.
The key to being able to successfully manage multiple tenant buildings is striking a balance between treating each property as its own unique investment and looking at all your properties as a whole. It is possible, for example, that one of your properties isn’t earning a lot of money. You have to be aware of this and look into potential issues at that particular property. But as long as you’re earning enough in total, continuing to manage that property won’t be a problem as you work on figuring out how to make it more profitable. Thus, you must manage individual properties separately while still being aware of the big picture.