Home | List of Articles | Submit an Article | Contact Us

The Five P’s of How To Be A Landlord And Manage Real Estate!

Copyright 2006 David 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. 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.

Related Articles:

Real Estate Investing - So You Want to be a Landlord! - Is landlording the way to go if you are starting into real estate investing today? Receiving cash flow from rental residuals is an exciting idea. If the rental housing is congregated in large apartments within a focused area, the costs of management and maintenance are more economical. Rentals are even more appropriate when all of the port ...

Landlord's Right to Enter - When you move in to a rental property, you agree to let your landlord handle many of the repair and maintenance problems. You also agree to lose some of your privacy rights. Unless your landlord is incredibly talented, he, or one of the people responsible for maintaining the property, must enter your home in order to make repairs and give inspectio ...

Landlords: Checking out Potential Tenants - If you're the landlord of a complex in high demand, you have to have high standards for your tenants. You don't want to rent to any Joe Blow and then lose the building a month later because he's been growing an "herbal garden" in the bedroom. In order to avoid any complications with your new tenants, the background check you perform should be exten ...

Your Responsibility To Promptly Submit Repair Requests To Your Landlord - As a tenant in a rental community, you have some advantages over homeowners. For example, you don’t need to worry about making simple maintenance repairs. What you DO need to worry about is submitting repair requests in a timely fashion. If you wait too long, YOU could be responsible for costly repairs. Let’s visit Suzy Shmoe - a resident of Hyp ...

Landlord Tips And Tricks - Every real estate investor dealing in rental homes has done his own clean-up and fix-up, at least in the early years. Landlords also become very skilled at managing tenants after being burned a few times. You learn the tricks of the trade and how to get the best results for the least cost. Maybe a few of the ...

Landlord Tips And Hints - Every real estate investor dealing in rental homes has done his own clean-up and fix-up, at least in the early years. Landlords also become very skilled at managing tenants after being burned a few times. You learn the tricks of the trade and how to get the best results for the least cost. Maybe a few of these tips will be new to you.

For a Complete list of Articles with summaries Click Here