Investing in property can be a wise decision. Having tenants means you will always have a steady stream of reliable income. This is the case whether you invest in commercial or residential property.
There is no escaping, however, that investing in property comes with responsibilities. Collecting rent, communicating with renters and strategising for future wealth can take up a lot of your time. Making your investments work for you is key. Here are some tips to help you do just that.
Automate rent collection
Being savvy with your finances probably allowed you to invest in property in the first place. But this skill extends into managing your income once you have tenants.
Leaving it up to tenants to decide how they pay can create more headaches than it is worth. Some may want to pay cash, some cheques and some bank transfers. However, cash and cheque payments are becoming rarer, and most are comfortable with electronic transfers.
Manual payments often result in late payments. To combat this, ask your renters to set up direct debits. This prevents lateness and gives clear expectations for payment. You also don’t need to interfere or do anything extra.
Consider utilising property management services
Renting to people does involve a lot of admin and behind-the-scenes work. From tenant screening, repairs and compliance checks, the work is endless. As someone with a busy life, outsourcing to a reliable property management services company will save you time.
Ensuring your properties are well-managed will keep your tenants happy and encourage them to stay for longer contracts.
Develop a clear strategy for rental yield vs. capital growth
A successful lettings portfolio is one way to financial freedom, so choosing between capital growth or rental yield is tough – you will find advocates for both directions.
Some argue it makes sense to go where the money is and invest in prime locations with high concentrations of professionals. This is called capital growth. You may also want to look at areas within the catchment areas of desirable schools. Properties that fall into these areas are often more expensive to buy and rent.
Rent yield strategies focus on regular homes which suit regular people. Whilst the rental prices may be lower, you are more likely to attract loyal, good-quality tenants. This leads to steady income although at a lower price.
Streamline tenant communication
Effective communication between landlord and tenants is essential but it doesn’t have to be time-consuming. There are tenant portals and property management apps that both parties can use to report issues, schedule repairs and even make payments.
Communicating well helps to reduce misunderstandings and improve tenant/landlord relationships. This all points to tenants extending their tenancy, keeping your income steady and long-lasting.
