Summary List Placement
Investing in real estate can be a great way to generate passive income.
But being a landlord entails responsibility.
Managing a property isn’t as easy as it might seem, and landlords are often faced with drawbacks from unpredictable expenses to significant operational overhead costs.
Despite these, there are some ways to streamline the landlord experience, according to Eachan Fletcher, the CEO of DIY property management app NestEgg, and former CTO of Expedia.
“The income is not as reliable as it might appear on the surface, especially at a time like today, and the month-to-month cash flow is super-volatile,” Fletcher said of the experience many landlords have with rental properties in today’s market.
“Many expenses, such as maintenance events, are unpredictable and always seem to happen at the worst moments. Operational overhead is also a big problem for the independent landlord space, as most owners in this segment also have day jobs and families — busy lives that time-consuming property management tasks don’t easily fit into.”
“My wife and I are ‘mom and pop’ landlords ourselves,” Fletcher said of his experience in real estate prior to founding NestEgg. They’ve had a small portfolio of 11 units for over a decade (now managed through NestEgg) and they’ve “tried everything else. This is how we know the limitations of today’s products so well, and the messy, awkward hacks independent landlords have to live with to get by.”
Working alongside one cofounder who’d been in a similar position and another who ran her own property management company, Fletcher said he’s gained access to an insider’s view to how the property management space works.
And having become an expert in the field personally and professionally, Fletcher says there are five strategies landlords should live by when it comes to managing their properties, and he shared his advice with Business Insider.
1. Establish a good working relationship with tenants
While there is a lot of legislation and local code governing long-term rentals and there are contracts and leases in place, Fletcher said “ultimately it comes down to two or more human beings working together on a day-to-day basis.”
Understanding and mastering that is a key aspect of being a good landlord.
“The landlords I know who have the easiest journey are the ones who think about what they’re doing as win-win cooperation with their residents. This means a less confrontational relationship, better care of the property, and more reliable income.”
2. Have a system
“Running rental properties is a complex operation with a lot of moving parts and, if you don’t put structure into it from the start and just be reactive, it’s going to be a lot more work and a lot more intrusive on your personal time than it needs to be,” Fletcher said.
He said to establish a plan for how you’re going to run the units and keep track of information, handle maintenance including a communication system for how your tenant can reach you, what happens if you’re out of town, and the like.
3. Build a team
New landlords quickly realize that they’re constantly searching for …read more
Source:: Business Insider