How to Manage Summer Home Rentals
Managing a summer rental property, or any property for that matter, can be a very rewarding and profitable experience if done correctly. Whether you plan to manage the property yourself or you decide to hire a property manager, it's guaranteed that organization, superior management skills, a reliable team (for administrative and maintenance purposes) and familiarity with the real estate market are necessary to succeed.
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Instructions
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Decide whether you would rather hire a property manager, manage the property yourself or manage the property using a combination of both. There are pros and cons to each option. Having a property manager on site alleviates some of the headaches involved with managing tenants and property maintenance, while managing the property yourself allows you greater control over the condition and finances of the home. Usually a property manager will accept a certain percentage of the rental income. Choosing to manage the property yourself (handling things such as collecting rent, showing the property and answering tenant questions) while having a team of experts to handle maintenance allows you both flexibility and a degree of control, without the hassle of a midnight maintenance call. If you decide to hire a property manager, some useful sites are Vacation Rental Property Managers, All Property Management and National Association of Residential Property Managers (see References).
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Advertise the property if you decide to handle the management yourself. You can do this online or in the local newspaper for a fee. It's strongly recommended that you consider the online route because buyers and tenants alike tend to search for rentals on the web. Vacation Rentals By Owner, Craigslist and Rentals.com (see References) are sites where you can advertise your home online and reach thousands of potential tenants. You'll also want to spread the word to friends, neighbors, family and Realtors about the newly available rental.
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Show your rental property and interview prospective tenants. It is important to screen the candidates by doing a thorough background and credit check, verifying employment and requiring written applications. Even if your next tenant is a friend or a family member, you will still want to have in writing the rental agreement. You can create your own rental agreement or obtain a generic contract. Organizations such as E-Renter, You Check Credit and Citi Credit Bureau offer background and credit check packages for a small fee (see Resources). It's worth it to pay this fee in order to avoid having the wrong tenant living in your home.
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Obtain renter's insurance to cover any liabilities, fire, damage or theft. There are many programs offered by Geico, Esurance, Allstate and others, so take some time to find one that is right for you.
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Visit the property on a bimonthly basis and arrange for regular maintenance and any necessary repairs. It's a good idea to have a list of trusted workers on hand ahead of time so there is no lag period between the disrepair and the repair work. Be sure to supervise repairs and maintenance work. During the visit, you will also want to make sure the tenants comply with all rental policies and procedures.
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Establish and maintain an organized system of collecting rental payments and security deposits as well as tracking any repairs and maintenance that have been done on the the property. Create an Excel spreadsheet documenting rental payments, repair work and cash flow analysis to make sure you are not losing money on your investment.
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Tips & Warnings
It is good practice to take photos of the interior and exterior of the rental property before the tenant moves in and after he moves out. Make sure the pictures are dated to avoid any confusion in the future.
If you plan to relocate out of town, it may not be worth your time, energy and finances to manage the rental property yourself. In this case, consider hiring a management company to care for the property.
References
Resources
- Photo Credit beach house image by jimcox40 from Fotolia.com
