You have a client that wants you to list their investment property for lease. Piece of cake, right? You list the house for lease. Someone contacts you wanting to lease the property. You write up a lease using the TAR form. Tenant moves in. You earn your commission. Your client has “passive” income for a year or two. And, you expect to do it all again at the end of this tenant’s lease. What could possibly go wrong?
There are many perils and pitfalls that could trip up you or your client in leasing and managing a rental property. Here are just a few. Do you know where to check for local ordinances and state property code regarding lease properties? How will you screen tenant applicants? Who will the tenant contact for maintenance items? Is your client handy? Do they know a great handyman? Has your client thought about who is going to take those emergency telephone calls in the middle of the night or on holiday? What if the tenant doesn’t pay rent on time? What recourse does your client have? What if the tenant’s trash the property? What if your client has to evict them?
After the lease is signed, you’re not a part of the relationship between your client and their tenant, but what if your client looks to you for advice. You might know a great handyman. Do you know a great lawyer to help them with code violations, non-paying tenants, or evictions?
If your client plans to generate passive income as a real estate investor, the best advice you can give them is to hire a Professional Property Manager. Your client leaves their property in the capable hands of the property manager for a small monthly fee. Professional Property Managers screen tenants, negotiate leases, handle maintenance calls including the late night ones, take care of monthly accounting, make court filings, and distribute net monthly income to the Landlord.
Get to know local Property Management companies. Choose a Company that has Certified Leasing and Management Credentials. Using a licensed REALTOR and Texas Certified Leasing and Property Manager brings an advanced level of education, knowledge and experience to your team. Your TCLPM has extensive, up-to-date knowledge of landlord/tenant law and will assist you with code compliance, both state and local.
Associate yourself with a company that looks out for your long term success as well as your clients’. Some Property Management companies offer incentives to agents who refer their clients for property management. Some will refer your client back to you annually for leasing. Some will refer your client back to you when your client chooses to sell the property. A company that has a large, diverse portfolio can provide you with local connection and market expertise. They have the years of experience needed to market your client’s properties so they rent quickly to qualified tenants and at the best price.
Whether your client is just getting started or a seasoned landlord, a Professional Property Manager can help them take care of their investment property so they can focus on growing their real estate investment portfolio. Wouldn’t you like to sell your client more investment properties with the peace of mind that both they and you will be working with the best in the business toward making the most of their investment?
Guest blog courtesy Shirley Johnson, 3G Properties