Investment properties, what is the most important part?
A lot of time, energy and resource goes into getting the ideal investment property. First of all finding one, then financing it, doing estate deals, renovating it, marketing it for rent, the list can go on! All of these are important for your investment property but none of them are the most important thing about your investment.
Your tenants are…
Properties don’t create cash flow - tenants do
Take a moment and think about it. The property provides you with the opportunity to generate income, but it doesn’t pay the rent - the people in the house do! They are the ones living there, making the house their home, and paying the investor to be able to do so. This means an investor needs to do everything they can to make sure good tenants want to live there.
Getting the right tenant is key
Have you ever had a bad tenant? It could have been a pet causing some damage. Maybe it was people smoking inside when smoking wasn't permitted, or a new partner moving in and causing problems. Or perhaps it was that special tenant who decided to pay rent wasn’t applicable to them. Bad tenants are expensive and can cost hundreds, or even thousands of dollars.
Finding the right tenant, or better still, avoiding the wrong tenant is critical, and every investor should take this part of the process very seriously. If you are placing the tenants, make sure you have a thorough tenant screening process. Follow the proper steps, and take your time. If you work with a property manager, ask what they do to screen tenants for your property, because some will be more experienced and do a better job than others. You want the tenants who will care for your property and pay their rent on time.
Communication, communication, communication
Once you have good tenants in a property, you need to build and maintain that relationship. This is not a drop and go situation. How often do you check on your tenants? Do you know them, and make sure everything is going well at home? Do you listen? If there is an open line of communication, and the tenants feel heard, with their issues addressed, tenants are far more likely to respect and care for a property better, stay longer and complain less.
The property is important, but without any income coming in, that property can be a liability - and you don’t have cash flowing in to make it an asset without a tenant paying rent.
Tenant choose properties to live in. You want them to make it their home, so don’t take the opportunity lightly. Create a safe and healthy place for them to live; understand who the tenants are - or make sure your property manager does, and then create a relationship that allows those tenants to feel cared for and happy to live in your property for a very long time.
When you solve that problem, you will have an amazing property, a happy tenant, and a solid investment for the length of time you own it.
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