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.
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.
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.
Part 1
So You Want to Be a Landlord?
IN THIS PART …
Figure out whether you have what it takes to manage residential rental property.
Discover what you need to know if you’re taking over ownership of a residential rental property.
Work with the current tenants, and inform them of your policies and procedures.
Chapter 1
Residential Property Management 101
IN THIS CHAPTER
