Anyone who has experienced managing a property would be the first to tell you that it is a thankless job. There are too many challenges you need to overcome to make the operations smooth-sailing. With the rise of Airbnb or Vrbo, it gives Americans more opportunities to gain passive income from their property.
For instance, about 26% of Americans in 2016 rented out their home or a room to transients. The contract can be short-term or long-term. However, the majority of them manage the property themselves. With no prior experience, they mostly learn on the job.
Property management software
Managing a property is mostly a hit-and-miss endeavor. Those who managed to learn quickly on the job expanded their business. Even if you do not have the experience, however, a property management software will mask all your weaknesses and make you seem more competent than you are.
Commercial rental property is a big business. It is typically composed of different segments, such as office, industrial, and retail. According to data, from January to June of 2019 alone, some $8.12 billion were already poured into office construction. Meanwhile, the value of construction for rental properties is estimated to be $89.5 billion.
What are the most common challenges you face when managing a property?
Vacancy
If your primary business is property rental, you need to minimize the days when the room is vacant. Most Airbnb users, however, do not rely on their properties as the primary source of income, so they are not that worried about the vacancy rate.
Marketing
This one is related to the first point. Effective marketing will help boost the occupancy rate. The property management software has a marketing feature that makes it easier for you to place an ad or promote the space for rent.
Tenants
When you are dealing with people, you can expect different personalities. To minimize the headache, you need to screen your potential tenants through an extensive background check. It ensures that you only take in those who can pay, take care of your property, and those who always pay on time. Also, you need to keep a file of your tenants so you can go after them in case of damage to property.
Managing finances
Another challenge is proper auditing and inventory. You should always know where the money is coming from and where it is going. It would be best if you were on top of the cost of running your property. If you hire a landlord to take care of your property, they should give you regular reports on the real state of your business.
Time management
The reason you set up a rental property business is to generate a passive income. However, if you are already too preoccupied with managing the operations to the detriment of everything else, then you have a problem.
In the future, more and more landlords and property owners will exploit technological innovations to make their jobs more manageable and efficient. For instance, online platforms will allow them to manage their business by remote. Using their smartphones, they are always on top of the key indicators that tell the status of their operations. They can check their properties through CCTVs, talk to tenants through video-call platforms, and accept payments online. Technology frees much of their time without sacrificing management quality.
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