7 Tips To Manage A Property Portfolio Efficiently
Managing a property portfolio doesn’t have to feel like herding cats.
With the right amount of planning and organization, you can make investing in multiple properties a rewarding process.
This post explores a handful of tips that every property portfolio owner can benefit from – whether you’re a first time property investor or a seasoned real estate owner.
1. Diversify your investments
Success largely comes down to the types of properties you invest in. Your properties need to be attractive to tenants/buyers and they need to be in a good enough condition that you’re not constantly pouring money into them.
Ideally, if you’re investing in multiple properties, they should also be quite diverse.
There are many different types of property you can invest in including houses, apartments, offices and vacation homes. Some investors prefer to invest in a single type of property – especially if that type of property seems to be doing well for them.
However, it’s not wise to put your eggs all in one basket. Investing in a range of different types of property can protect you against localized disasters or crashes/legislation affecting a single type of property.
Invest in different types of property in different locations aimed at different types of tenants in order to spread your risk.
Read 4 Factors To Consider When Building Your First House
2. Keep a tight budget
A tight budget is important to stop you overspending and getting into costly unwanted debt.
When initially buying a property, you need to make sure that you can reasonably afford the down payment and monthly repayments, while still being able to set aside some savings for repairs and other additional costs.
Some property portfolio owners cash out too much of their profits too soon or buy more property than they can afford, resulting in them not being able to pay for unexpected repairs.
Financial software can help you to create budget projections and help you determine when to buy another property or make property improvements. This leads onto the next important tip…
3. Embrace Technology
Technology is key to helping you organize data on your portfolio. Financial software can help you maintain a tight budget and keep track of upcoming costs and late payments. CRM software may help you to vet tenants and respond quickly to tenant messages.
There are even applications like https://quarem.com/ that can help you manage lease paperwork in one place.
These types of software may be able to send you automated reminder notifications to do tasks – and even automate certain tasks for you such as sending automated reminder messages to tenants.
4. Carefully Vet Tenants
Much of the day-to-day stress you experience as a landlord can be down to the types of tenants you take on.
The ideal tenant should be someone who you can trust to look after the property, pay their rent on time and get on nicely with neighbors.
When looking for new tenants, it could be important to put in place these vetting measures: a credit check, a reference and potentially a guarantor signature.
If a tenant applicant is able to pass all these tests, there is a greater chance that they will be a good tenant. This guide at https://moneyweek.com delves more into how to vet tenants.
5. Schedule Regular Inspections
Property inspections are key to identifying problems and fixing them in good time.
Before buying any property, you should always carry out a full survey to check for any hidden damage – a survey could prevent you from investing in a property that will cost you huge amounts of money in repairs in the future.
Once you own a property and have found a tenant, it’s then important to schedule regular inspections to check for further damage that may have sprung up.
Inspections can also ensure that tenants are following the terms of their contracts (such as not smoking indoors or sub-letting).
Properties should be inspected every 6 months and tenants should be given at least 24 hours notice (although it’s best to arrange a date a week in advance and find a date that is convenient for your tenant in order to keep them happy).
Read 17 Top Qualities Of A Good Real Estate Agent
6. Hire some help
Managing a portfolio of properties can be a lot of work. If you can afford it, consider whether it is worth hiring some help to take over some of the admin.
This could include hiring a lettings agency to help you find tenants and carrying out screening.
You can also hire property managers to carry out inspections and maintenance on your behalf – which could be useful with properties that you don’t live nearby to.
7. Monitor The Market
Monitoring the property market will help you to keep on top of trends such as property prices, average rent prices, types of properties people are renting, types of improvements investors are making and the types of tenants investors are taking on.
All of this can help you to make the right future decisions with your investments.
While a property portfolio can be a decent passive income, don’t get too passive with it – the most successful property investors regularly do their homework.
