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The
Five P’s of How To Be A Landlord And Manage Real Estate
By: Dave
Schneider
Many real
estate investors become frustrated with the tenants and the
toilets. And when you look at the way they manage, it's no
surprise.
The most
important part of investing in rental real estate is to have a
good property management system. In any successful management
system there are the five P’s. They are Property,
People, Paperwork, Policies
and Procedures. Lets look at each of these P’s
individually.
>> The Property
must be managed. You need to have a plan to make repairs and do
maintenance. This should be something that is automatically done
throughout the year and include such things as checking for
leaky pipes, checking smoke and fire detectors, caulking and
painting or any other maintenance items.
>>
The People.
This is the most difficult part of the management process. You
need to put in place specific systems to deal with all the
people that effect your rental business. This not only includes
your customers (tenants), it also includes all the other people
that help you in your business including caretakers, plumbers,
carpenters, electricians, handyman or anyone else you have
involved in running your rental business.
>> The Paperwork.
This part involves all the record keeping, tax issues, bank
issues, leases, tenants letters and legal issues. Software such
as The Complete Landlord’s Form And Letter Package found at http://landlordtools.com
is a good start. You also need to consider how to set up your
business. This should be discussed with an attorney. You should
sit down with a good tax accountant and address the tax issues
and what records should be kept. Using simple programs like
Microsoft Money or Quicken can be set-up to run the financial
part of your business. These simple programs can track your
income, expenses, who has paid rent and who hasn’t. With
programs like this, you can create and print reports for
individual properties and know exactly which properties are
performing the way you want them to.
>> Policies-
In order to control the first three P’s you should have
a specific policy regarding everything. For example: You should
have a policy regarding what to say and do if a tenant calls and
requests a repair. You should have a policy of what is a
violation of the rental agreement. By having a policy for
everything it makes it easy to determine what has to be done.
>> Procedures
– This goes right along with your policies. You should put in
place automatic procedures for everything. For example: If a
tenant doesn’t pay rent by the 5th of the month
(your policy) you will automatically start the eviction
procedure. Your procedure might be, you send them a written
notice on the 6th, if no response your start the
court process on the 10th (if law allows).
You then continue with the entire process that you set-up
until the tenant moves out. Then you start a new procedure to
rent the property. Every policy should have a procedure.
Taking
the time up front to plan the five P’s is the key to a
successful management systems.
Remember
that the name of the game is to create more cash flow and work
less. Having a system that deal with the 5 P's will do that for
you.
Dave Schneider has
been investing in real estate for over 25 years and is devoting
to helping landlords make more money!. For free audio seminars,
tools and information on real estate investing and being a
landlord, visit this site now: http://landlordtools.com
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TO REPUBLISH:
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article may be republished in it's entirety free of charge,
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