the-abcs-of-real-estate-investing-ken LifeFeeling

unlimited number of tactics for getting prospective resident traffic. Professional property
management companies know what works and what doesn’t. You can also handle this part
of the job on your own.
But be aware that getting residents is not the sole objective. You want to attract the right
residents. So as a rule, I never rent an apartment to anyone who has not been run through a
criminal and credit check. In every apartment building or community that we manage, every
applicant is run through a background check. We are not under any obligation by law to rent
to criminals or sex offenders under any equal housing act. And I don’t feel any moral
obligation to give those who need a “fresh start” a home in our apartments. What I do feel is
a moral responsibility to provide as safe a living environment as possible for our residents.
I feel even more strongly about background checks after the 9/11 tragedy. When the
identities of the terrorists behind the attacks as well as those who took part in the killings
were revealed, several news stations reported where they lived and interviewed neighbors.
In almost every instance, they lived in rental housing and many of them had fraudulent
Social Security numbers, and some even had criminal backgrounds. Missed opportunities
leading to a global tragedy. I background-check everyone and tell them right up front. If
they don’t like it, they go somewhere else and that’s exactly the point.
INCREASING THE CASH FLOW
It is the property manager’s responsibility to increase the cash flow of the property.
Good property managers understand the real-world parameters within which they must
work to achieve this goal, but if you are managing the property yourself, you’ll want to be
aware of what the market is doing in your immediate area. Take the time to review your
local newspapers, drive by the competition, and call the surrounding properties in the area
so you’ll know your market before you increase your rents. Simply call and ask the rental
rate, the square footage, the deposits required, and what is included in the rent.
LEGAL AND CONTRACTS
Get into the rental property business and you’ll quickly learn that most states have a lot
of laws governing the operations of apartments big or small. A professional management
company knows these laws and has in place the appropriate forms for residents and property
owners to complete upon leasing. In addition, they know how to file the appropriate reports
and documents with the government. If you do not use an outside firm, you’ll need to create
your own leases, eviction notices, pet addendums, and so on in accordance of the law.
Management companies also ensure that all residents are treated the same, in other
words, that all have read and signed the required paperwork and are apprised of their rights
as tenants and of your rights as the landlord. When you are your own property manager,
especially of small properties, it’s easy to be lax with your paperwork. This can and will get
you into trouble eventually. If you don’t believe me, rent the movie Pacific Heights. Not
everyone is as nice as they appear on the outside.
You are going to want a limited liability entity like an LLC for asset protection. For a
good overview I recommend reading Start Your Own Corporation by Garrett Sutton, Esq.