Many Americans have the dream of starting their own business. In fact, freedom from the corporate world, being your own boss, and making a lot of money, are the thoughts that dominate your mind when you’re feeling that entrepreneurial spirit.
But running a business is a lot of work.
Launching a rental property business and becoming a successful landlord does not come easy. Even in Anne Arundel County, which County Executive Steve Schuh says is “The best place to live, work and start a business in Maryland,” having a successful property business is not going to come without its fair share of experience, knowledge, and most of all, work.
That said, not all hope is lost.
Deemed the heart of Maryland, home to over 500,000 thriving residents with good jobs, growing families, and a desire to enjoy all that the region has to offer, Anne Arundel County has the potential to make you a profitable property owner.
With a few key business skills backing your property investment ventures, and a solid property management company helping you along the way, reaching success in your rental property business may not be as hard as you think.
Take a look at these essential business skills you should have prior to investing in your first rental property, so that you can start with your best foot forward.
These skills will ensure you are best prepared for all the unknowns that your landlord business will inevitably throw your way. In addition, working to obtain these skills will help increase your chances of achieving your dream as a business owner.
Top 5 Business Skills Every Anne Arundel County Landlord Should Have
1. A Business Plan
Before starting any business, you should have a business plan in place outlining your short and long-term goals.
Without a business plan, you risk losing money before you even get started.
Here are some key things to ask yourself when you start thinking about getting into the rental property business:
- How much money do you realistically expect to pay out for your first investment property?
- How can you make your financial situation the best it can be before purchasing a property?
- How many rental properties do you plan to own?
- What types of risks are you willing to take to secure the perfect rental?
- What areas are you looking to invest in?
- Who will manage your rental property after tenant placement?
- How much positive cash flow can you expect to make?
- What will you do if your property is vacant for long periods of time?
Though you may not have complete and exact answers to all of these questions, or whether you may your find that your answers evolve over time, it is a good idea to figure out the basics before jumping in blind.
Any successful business owner will tell you that not planning is a recipe for disaster.
2. Market Expertise
Along with having a solid business plan to follow as you start your rental property business comes the idea that you should have real estate market expertise before purchasing any property, no matter how great a deal it is.
Market research, one of the most important business skills a landlord can have, will reveal whether an investment is sound or not.
Identifying which areas bring in higher rent amounts, have the lowest vacancy rates, and have a highly qualified tenant pool searching for rentals, is going to set you up for success from the start.
In addition, knowing what your competitors are doing to become successful, how appealing the area you are looking to invest in is for potential tenants, and what types of renovations you can expect to make, will help you make wiser investment decisions.
All businesses require high levels of organization to become, and stay, successful. This means developing a secure filing system, complete with important property related documents, including:
- Property investment paperwork
- Property certifications
- Completed tenant applications
- Invoices related to property maintenance, repairs, and upgrades
- Rent collection receipts
- Vendor W-9 forms
- All tax related forms and returns
- Lease agreements
- All notices and communication given to tenants
- And much more
Proper bookkeeping is going to make sure you stay out of trouble with the law, appear professional to every tenant you work with, and keep your life much less stressful.
Since owning a business comes with plenty of unplanned and stressful times, worrying about important documents that you could have properly organized (but didn’t) should not be one of the reasons you are stressed.
4. People Skills
Working with people on a regular basis is part of what it means to be a property owner.
Prospective tenants, existing tenants, vendors, contractors, property managers, and even your accountant are just some of the different types of people you will work with as a landlord.
And, while it may not be the same as your office job once was, your ability to get along with people, even in times of trouble, will significantly impact your success as a landlord.
You must work to find the perfect balance between offering exceptional customer service to your tenants, and becoming too friendly with them.
Remember, being polite is okay, but bending the rules to accommodate tenant mistakes is not. You are running this business, not your tenant.
This means you need to have zero tolerance for things like late payments, roommates that have moved in without background checks, pets that have been staying in your property despite the no pet policy, etc.
Be firm, set your expectations from the start, and stick to your guns.
However, don’t be mean, intrusive, or too picky.
Sounds easy enough, right?
It can be, as long as you practice your people skills. Having good, professional relationships with all those involved in your rental property business will take your business far.
5. The Ability to Delegate
Bosses love to be in charge – it’s what they’re there to do.
And, it will probably be no different for you when you become your own boss, and start running the show.
However, a good business owner knows when things become too overwhelming, and knows when to relinquish some control.
This is when employing the help of an experienced property management company can help make your business a real success.
By hiring the right kind of property manager in Anne Arundel County to help you handle some of the responsibilities that come with running a rental property business, you will still maintain all of the control over your property, just without all the extra stress.
A good property management company will be able to do the following:
- Property advertisements
- Tenant screening and placement
- Rent collections
- Maintenance and repair requests
- Routine property inspections
- Proper bookkeeping of all important documents
- Management of pending evictions
Delegating these jobs to a property manager is not giving up on your rental property business. Instead, it is a way of nurturing it to become more successful.
If you are in the Anne Arundel County region and are thinking about starting your own rental property business, have Bay Management Group help you from the very start.
Not only do we have the expertise to help you garner high quality tenants, we have the business skills to accompany yours when it comes to your rental property business.
Contact us today, and see all the ways in which we can help your rental property business thrive.