If you’re just getting into the Toronto residential or commercial property management game, it’s important to know what to do. Managing properties is more than just charging the right amount for rent, keeping spaces full, and fixing things that break in a timely fashion. It takes a lot of time and effort to manage properties correctly, and everything you should be doing may not seem obvious at first.
You may want to consider securing the services of a company that manages property for you. Fees will typically range from 7% to 10% of the price or higher in some cases. If money is tight and you have plenty of time and interest in managing your own properties, you might want to save yourself the fee and do it yourself.
These property management tips for new landlords are from an article in Entrepreneur.com that can help anyone get started in Toronto residential or commercial property management.
1. Toronto Residential and Commercial Property Management: Reinvesting
It’s obvious that things will break from time to time, but what may not be obvious are the need for a regular maintenance plan and continued reinvestment in the property. Most Toronto residential and commercial property management companies use software to manage maintenance plans. Before you can create a maintenance plan, you will need to get to know the property and all the appliances and other systems that are in it. You must determine how often maintenance must be conducted on each system to keep it in good working order and extend its life. Once you know this information, you can go about creating a plan.
You should also reinvest in the property on a regular basis because the more often it’s rented out, the more use everything will get. You should stay on top of all the systems in your properties so you can replace them before they break down entirely. Reinvesting in the property’s amenities will also make a big difference in the renter’s experience. Property reviews are a major source of new business for landlords, so you’ll want to keep everything in top shape.
Read our article on how reinvesting can make the concept of compound interest work for you.
2. Keep Finances in Check
A big part of property management is keeping the finances in check. You’ll want to make sure that when you reinvest, you aren’t going overboard with what you do. Before you reinvest, you will need to understand everything that has to do with how much revenue you can generate on it.
For example, the location of the property is important because renters want to be close to shopping and, in the case of long-term rentals, schools, but they also want security and a safe neighbourhood. Some properties will rent for more simply because of where they are located.
Another important factor in how much revenue you can earn is the level of luxury it offers. Obviously, more luxury means more revenue. Two other factors are the size and the amenities it offers.
Toronto residential and commercial property management companies use various data points to predict how much revenue the property will bring in. Without the appropriate data, you’re just taking a guess at how much rental income you can earn on your properties. The key is to make your prices competitive with those of similar properties but not so underpriced that you miss out on potential revenue.
Your Toronto Residential or Commercial Property Management Team
You will also need a realtor who is knowledgeable about the type of properties you’re investing in. Some investors prefer to own short-term vacation rentals, while others prefer properties with long-term leases in either the commercial or business niche. Real estate agents often specialize in certain types of properties, so you should look for one who knows a lot about the type of properties you invest in. Their knowledge should include not only finding and buying but also managing rental properties.
Some real estate agents may offer property management services, but you may need a separate property manager. It’s a good idea to speak with several management companies before you decide which one to use to manage your properties. It makes more sense to hire a Toronto commercial or residential property management company that’s local or at least has a local presence. Many companies offer services in multiple cities, but you want one that specializes in Toronto properties.
Some good questions to ask property managers include asking about how they will maximize your rental income, how they will take care of your properties, and how they will communicate about your properties, both with you and with your tenants.
3. Maintenance and Inspections
Another important part of owning properties and renting them out is regular maintenance on the systems inside the properties. It’s a good idea to build some level of redundancy into all of your inspections to ensure that nothing is missed and that every system is checked on a regular basis. This will enable problems to be handled before they become serious issues that affect the experience of your tenants.
Preventative maintenance will always be an important part of property management. Thus, it’s important to have a plan in place and not to deviate from that plan. The last thing you need is for a major system like the heating or cooling to break during an exceptionally hot or cold period. Such a situation has a major negative impact on the rental experience, no matter how long the guests are staying there.
Most serious issues can be prevented by simply staying on top of the systems in your properties and checking them on a regular basis. Regular check-ups will often reveal when an important part of the system is toward the end of its life so that it can be replaced before the entire system goes down.
The Toronto residential and commercial property management business is a competitive one, so anything you can do to provide a quality experience to tenants will make a huge difference in your bottom line.