Guide to managing your investment property

Real estate has been a primary investment vehicle for many in Canada. In this guide, we'll go through the basics of investment property management with tips and tricks to better manage your investment properties.

Let's learn more about the basics of rental property management.

Importance of communication

Whether you have a residential or commercial investment property, being in communication with your tenant will give you a picture of how they are maintaining your property, how they are doing financially and whether they have run into any issues with the property that could use some preventative maintenance. You can discover and address issues proactively than reactively go after the tenant once you retake possession of the property.

Maintenance and repairs

Maintenance and repairs are necessary for any building, residential or commercial. Timely preventative maintenance and upgrades increase the value of your rental property, allowing you to charge higher rents and prevent a major repair down the line. Upgrades and repairs fall under two categories – essential and cosmetic. While cosmetic upgrades and renovations may seem unnecessary at times, they earn you more rental income.

If you have the time yourself and you are handy, you can do the maintenance and repairs yourself and save money. Otherwise, you must have a good business relationship with contractors. Property managers can also handle these things for their clients. If you don't want to go through the hassle of working through multiple vendors and contractors, opting for a property manager is the smarter choice.

Understand lease agreements

Lease agreements/rental agreements are legal documents that specify the terms of a tenant's stay in your property. A well-drafted lease agreement solves several problems even before they emerge.

Unless you are a legal expert or working with a property manager, you will need legal assistance to draft a lease agreement. Make sure your lease agreement is foolproof and doesn't have any ambiguity.

Being aware of and understanding local tenant laws

Tenant laws are specific to provinces. Before you start looking for a tenant, know everything you need to know about local tenant laws. Learn about which documents you need to obtain and preserve and the legal rights of tenants. You should also be aware of your rights as a landlord and the things you can legally prohibit your tenants from doing.

Here again, hiring a property manager simplifies the process. Instead of studying and understanding all the tenant laws, you can let your property manager handle it for you. It's particularly beneficial for people who don't have time.

Advertise and market your property to your ideal tenant

There are plenty of free platforms to post your investment property for rent. However, savvy investors know what to do to attract the ideal tenant. An ideal tenant is not always one that pays the most but the one that incurs the least amount of stress for you as the landlord.

Get your property staged and have a professional photographer take pictures when your property is vacant. It makes a big difference to a potential tenant to see what they are getting into and how it could be laid out. Pictures speak a thousand words and are incredibly effective in attracting tenants.  

Also, look at other postings made by landlords to see what type of information they are including in their posts. Professional property management companies make hundreds of posts a day and use standardized professional templates that you can copy. By doing these things, you can attract desirable tenants.

Manage finances

Property is both an asset and a liability. You have to spend money on a property even when it's earning you passive income. Unless you closely track your expenses and income, you won't understand how much rental income you are actually getting. Track your expenses and analyze what are monthly recurring expenses in order to determine what kind of return the property is generating.  

Property owners hire property management companies to get detailed income and expenses reports and account ledger reports. Don't go into the real estate market without understanding the nuances of rental income vs rental expenses.

If all of this seems too much work, you can simply hire a property management company to handle every aspect of investment property management.