an air-conditioning specialist to the list. “If my pager goes off when I’m away on vacation,” says Sullivan, “and the tenant wants someone to come over right away, I know who to call.” Be sure to pay the contractors promptly if you expect them to give you the immediate response you’d like.
Decide whether you’re a do-it-yourselfer. Rather than keep a list of contractors on hand to do repairs, you may prefer to turn over maintenance responsibilities to a professional. “If you have enough rent coming out of investment properties, it may be worthwhile to pay 6% or 7% of that income to a property manager, especially if you also have a full-time job,” says Tony Rogers, managing director of the LaSalle Financial Group, a retail firm of MetLife Insurance, in Coral Gables, Florida.
Whether you hire a manager or fix the toilets yourself, Rogers says that you must know the local market to be a successful landlord. “You can buy in an area where you live,” he says. “If you own property out of town, there should be a close friend or relative who can let you know what’s going on there.”
Rogers recalls when he was a full-time commodities trader in Chicago. “I invested in a duplex in Ohio,” he says. “Looking at the numbers, all I had to do was keep one side rented to break even. With both sides rented, I’d have an excellent return on my investment.”
Being a long-distance landlord, Rogers had no choice but to rely upon a property manager in Ohio. “I received a call one day,” he says, “telling me that both sides were empty. In fact, it had taken three months to get rid of one tenant who had done so much damage to the property that it took $15,000 to repair.” The message, therefore, is do your homework. Find a property manager with good references who can be relied upon to keep an eye on your property.
Be vigilant. If you own rental property close to home, you can do your own scans. According to Rogers, even if you have a full-time job, and you hire a management company, you should still take steps to protect your investment. “Go by and check on you
r property,” he says. “Go on your lunch hour, your nights, or your weekends.”
If you do assume responsibility for maintenance, it’s especially important to find reasons to visit the property. “As part of my agreement with tenants,” says Sullivan, “I used to cut the grass, so I was over at my properties regularly, doing a visual inspection. I don’t do that anymore, but I’ll still swing by from time to time to see how things look.”
One reason to “swing by” is to collect the monthly rent. “I also do things such as change the air conditioner filters,” says Sullivan. “Then I get to look around the house with a flashlight.”
Keeping your rental property in good condition not only preserves your investment, it will help you retain desirable tenants. “When I