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Introduction

Welcome to Property Management Kit For Dummies, 4th Edition. You can discover many of life’s lessons by doing some on-the-job trial and error. But that possibility doesn’t apply to property management: The mistakes are too costly, and the legal ramifications too severe. This book gives you proven strategies to make rental property ownership and management both profitable and pleasant.

About This Book

Many landlord–tenant relationships are strained, but they don’t have to be. A residential rental property owner who knows how to manage their property properly and who responds promptly to the legitimate concerns of their tenants will be rewarded with good people who stick around. The key is maintaining your property properly and constantly investing in upgrades and improvements. By doing this, you can be successful in meeting your long-term financial goals and realize that being a landlord is an excellent primary or secondary source of income.

This book is based on hands-on experience and lessons from my own real-life examples. Unlike many landlords and property managers, I believe that your tenants are your customers, not your enemies, and as such, you should treat them with respect. You may find investing in residential rental real estate to be a key piece of your overall investment strategy, but not everyone is cut out to be a property manager. I want to make sure you understand not only the basics of the rental housing business, but also some of the tricks that can make you glad you’re a real estate investor.

Although this book is overflowing with useful advice and information, it’s presented in a light, easy-to-access format. It explains how to wear many hats in the property management business: advertiser/promoter (in seeking tenants), host (in showing the property), handyman (in keeping up with and arranging for repairs), bookkeeper (in maintaining records), and even counselor (in dealing with tenants and their problems). Just as important, this book helps you maintain your sense of humor — and your sanity — as you deal with these challenges and more.

I wrote this book in essentially chronological order — from your first entry into the world of residential rental property ownership and the corresponding steps to prepare and promote your property to showing your rental and selecting the right tenants. As a result, reading the book cover to cover makes sense, but feel free to read the sections that are most relevant to you at any given time. Skip around and read about those areas that are giving you problems, and I’m confident that you’ll find some new solutions to try. You can also skip sidebars (text in gray-shaded boxes), but I think you'll enjoy these humorous anecdotes.

To make your life easier, I’ve included many of the forms you need to be successful in managing your rental — whether you’re just starting out with a single-family rental home or condo, you have a handful of rental units, or you possess a whole portfolio of rental properties. These forms are available online at www.wiley.com/go/propertymanagementkitfd4e. Feel free to print them out, have your local legal counsel review them, and start putting them to use.

Foolish Assumptions

When writing this book, I assumed that you’re likely reading this book because you’re one of the following:

 An unintentional property owner — someone who, through a series of circumstances, suddenly and unexpectedly came upon an opportunity to own a residential property. Perhaps you inherited a house or condominium from a relative, and not wanting the property to sit idle, you decided to rent it out. Or maybe you transferred to a job in another city, and because you’ve been unable to sell your home, you’ve been forced to rent the property to help cover the mortgage and operating expenses. Many property owners find themselves in the rental housing business almost by accident, so if you count yourself in this group, you’re not alone.

 One of those people who made a conscious decision to become a residential rental property owner. Perhaps, like many rental owners with a plan, you needed to buy a new, larger home and decided to keep your existing home as a rental property. Or maybe while you were looking to own your own place, you found a great duplex and decided to live in one unit and rent out the other. In a world where people seem to have more and more demands on their time, many aspects of rental housing ownership are very appealing, such as the capacity to supplement a retirement plan with additional income and the proven opportunity to build wealth. The key to achieving this success is finding a way to make money while still retaining control over your life.

 Someone who already works in the rental housing industry. Maybe you’re just starting out, or maybe you’ve been in the field for some time. Either way, you want to find out more about your chosen profession. Good for you. The rental housing industry has so much variety that you’ll always be discovering new things and appreciating that every day is a new challenge. Yes, there is some repetition (you have to collect the rent every month), and you must be available at all hours of the day and night (for emergency calls), but unlike in many jobs, no two days ever seem to be the same. That’s what attracts so many professionals to the field of residential property management (and keeps them there).

When you’re an owner, residential real estate offers one of the best opportunities to develop a steady stream of residual income that you earn whether you’re sleeping, participating in your favorite leisure activity, enjoying your retirement, or relaxing on vacation. Whatever the circumstances, the bottom line is the same: You hope to generate sufficient income from the property to cover the debt service, pay for all operating expenses, and possibly provide some cash flow, along with tax benefits, appreciation, and equity buildup. The key to your success is knowing how to manage people and time. And this book has plenty to offer you on that front.

Icons Used in This Book

Scattered throughout the book are icons to guide you along your way and highlight some of the suggestions, solutions, and cautions of property management.

Remember these important points of information, and you’ll have great success as a rental property owner.

Keep your sights on the bull’s-eye for important advice and critical insight into the best practices in property management.

This icon highlights the land mines that both novice and experienced rental property owners need to avoid.

This icon flags real-life anecdotes from my many years of experience and mistakes. When you’ve managed more than 560,000 rental units in 340 years, you see some interesting situations. Now, I share them with you.

This icon flags specialized business facts and data that are interesting as background data but not essential for you to know. You can skip paragraphs marked by this icon if you're not interested in tangential information.

Beyond the Book

In addition to the forms included here in the book, you can go online to find many more forms that are going to make your life a lot easier as a residential rental property owner. Here's the address:

www.wiley.com/go/propertymanagementkitfd4e

I include a state-by-state reference to the state laws that pertain to residential rental housing. You'll also find a real estate glossary and resources that are available from the Institute of Real Estate Management (IREM), the National Apartment Association (NAA), and the National Association of Residential Property Managers (NARPM).

This book also has a helpful online cheat sheet with easy-to-access tips for property managers. Just go to Dummies.com and type “Property Management Kit For Dummies Cheat Sheet” in the search box.

Where to Go from Here

To get benefit from any great resource book, you must read it! This book is designed for experienced and seasoned landlords, as well as rookies who still think that all tenants are nice and prompt with rent payments and should be invited over for Thanksgiving supper.

Whether you’re contemplating owning residential rental real estate, looking to fine-tune your proven landlord secrets, or facing financial ruin at the hands of the Tenant from Hell, this book offers chapter after chapter of solid rental property management advice, for everyone from new rental property owners who have a single rental home or condo to owners of hundreds of units. The methods I present are effective for all sizes and types of residential rental properties. The book explains how to attract qualified prospects; select and screen tenants; maintain and increase the rental rate; and handle security deposits, rental contracts, broken water pipes, late rents, tenants who overstay (and don’t pay). Find the topic you want to know more about, and start reading right there.

Everything is manageable and workable — if you know what you’re doing!

Property Management Kit For Dummies, 4th Edition, helps you protect your investment and maintain your sense of humor, as well as your sanity, as you deal with one of the most unpredictable professions: property management. Consider this book to be your property management bible, written just for you.