Guidelines for Managing Your Rental Property
Whether you a first time investor or a veteran, it's important to be mindful of these common hiccups when renting your property out.
A long-term rental property can be a very lucrative investment. It’s a good way to make passive income but being a landlord can sometimes seem like a full-time job. There are several factors to consider at all times to ensure you have your tenants’ best interests at heart.
Responsibilities such as maintenance and repairs can be costly, so you also need to maximize return on investment and keep an eye on your finances. For this reason, many landlords work with local property management companies in Kona, Waikoloa, Waimea and Honokaa who provide assistance in a number of areas. If you’re managing your own rental property, here are a few quick tips.
Understand Local Laws
It’s essential to have a good understanding of Hawaii state laws to ensure you are protected at all times. Each state has different property laws. These may, therefore, vary relating to rental agreements, property maintenance, land ownership, building regulations, and so on. It’s a good idea to get clued up on these laws before embarking on a new business venture.
Monitor Your Finances
If you’re renting a property, there will be plenty of expenses that will need to be balanced against your rent profits. It’s important to learn how to effectively manage your cash flow for this reason. You could consider hiring an accountant to help you monitor your finances.
If you decide to DIY your own finances, you need to make a realistic budget and stick to it. It’s advisable to create a specific account for emergency funds to spend on the property.
Prepare for Re-leasing in Advance
Often turnover is not as quick as you might hope so it’s a good idea to prepare for the end-of-lease and re-leasing in advance. This will ensure a more constant cash flow coming in from your rental property. If your tenants’ contract is ending, start the re-leasing well in advance to give yourself time to find someone else. You should also be prepared to evict tenants. In the case that you encounter problems with your tenants, you need an eviction plan in place in accordance with the local legislation and your insurance policy. Remember you must reside on the Big Island of Hawaii to manage your own property. You may use an on-island associate to manage on your behalf, but our best advice is to hire a professional rental company familiar with the island, local laws and codes.
As you can see, managing a rental property is not without its challenges. This is why many landlords outsource these services to professional residential property management companies. You can rest assured your property will be in the hands of the experts.
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A checklist to prepare your home for the Hawaii rental market.
Reliable and professional long-term rental property management is an important aspect of owning and maintaining rental properties. It is of utmost importance that your property is well-maintained, income and occupancy are maximized, that your tenants are well screened, and that landlord / tenant rules and regulations are strictly adhered to.
Residential property management is a job requiring a unique set of skills. Here on the Big Island and Maui, finding a long-term management company with experts who know the real estate market, the local area and are skilled at working with tenants, is imperative. Below are some things you should expect/receive from your property management company. Clear and open communication with you the owner, and with tenants. Experience and knowledge of single-family homes or condos in the area where your property is located. Your rental manager should be able to provide you with rental comps and share information about the location. Successful rental management companies are members in NARPM (National Association of Residential Property Managers). This national association provides its member with education opportunities from Industry experts, current laws and standard practices. Expert long-term rental market assessment. Advertising and marketing for the best exposure and quickest re-rental. Advertise rentals on multiple websites. Rigorous pre-qualifying tenant selection including Credit & criminal screening, prior landlord references, income and employment verification. Rule enforcement Lease enforcements Regular and routine property inspections. Association interfacing Access to the best possible vendors, contractors and maintenance companies to coordinate repairs 24-hour emergency service Experienced accountants Aggressive rent collection via online portals for on-time receipt of rental income. Keeping operating costs under control. Computerized billing and accounting ACH Deposits of net proceeds Bill payment services Monthly financial statements
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