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10
Steps to Turning Your Property into a Cash Positive Investment
As experienced rental property owners, we struggled with the decision of how to manage our properties. Our number one priority was positive cash flow, but we just couldn't make the numbers work with a property management company, so we decided to do it on our own. After trial & error and a bit of luck, we've pulled together a task list of things to enable you to manage your property. These steps are independent of the PMBOTM property management software system. Good luck!
- Step 1 - Set
up a website. Experienced renters & travelers today require more
information than they have in the past. You'll need a place to list
property information and display pictures. However, don't think that
a website alone will get you rentals. Websites are really just electronic
brochures. We'll talk more about using the internet to generate traffic
below (see Step 8). - There are multiple companies out there that do
small business website setup. You can check with your local Chamber
of Commerce or Yellow Pages if you prefer to talk with someone locally.
There are also many providers that can be found online. We suggest using www.google.com and search for small
business website development. Website costs vary dramatically depending
upon the features in your site. If you have a single property, we recommend
keeping your site very simple to keep your $ low.
- Step 2 - Register
a domain name. A great domain name can be an attractive advertisement.
There are multiple sites online to search for and register a domain
name. Try www.domainname.com.
- Step 3 - Find
a web site hosting provider. Check with your website design company
or search online. There are sites that will host a small site for $10
- $20 / month. You'll probably also find some that offer "free" websites.
These sites feature advertisement banners. We'd stay away from them.
They detract from your site's purpose and renters tend to see these
sites as annoying or worse - uncredible.
- Step 4 - Keep
track of your rental's availability (inventory). A great resource
(and it's free) for manual set up and tracking of your property's availability
can be found at www.rentors.org.
For a quick and easy website setup, simply link from your site to this
free property calendar.
- Step 5 - Sign
up for credit card processing. Your credibility as a legitimate
business is key to having travelers feel confident in renting your unit.
Reserving with a credit card gives them and you the security you desire.
With credit card processing, you are able to charge up-front for the
reservation, eliminating the "snail mail delay" where you're left wondering
if they really sent in the check. - There are numerous options out there
for credit cards. For liability reasons, I do not recommend a specific
credit card company or process. However, if you register your business,
you'll undoubtedly get numerous credit card offers in the mail. You
can also research on the internet (www.google.com - search on small business credit card processing). - we recommend finding
a terminal option - which will allow you to manually enter credit card
information securely online via a merchant account. Be prepared for
an initial setup fee ($250-$750) and monthly credit card fees (generally
$10 - $20) as well as potential minimum charges. The merchant accounts
may also want to run a credit check prior to giving you merchant access
approval.
- Step 6 - Find
a local company to provide cleaning services. Check with your local
Chamber of Commerce, Yellow Pages, or other Property Owners in the area.
You'll want an established company to increase reliability and confidence.
When getting rates, ensure that you know if those rates include or do
not include supplies (sheets, towels, cleaning supplies, toilet paper,
paper towels, trash bags, soap, etc.). Rates will vary extensively by
location, but I'd throw out a general rate of $50 per hour for a one bedroom in a resort
areas with a $10 supply charge per trip. Rates will increase for multiple
beds / bedroom & baths.
- Step 7 - Find
a local company to hand out keys. Don't even think about trying
to mail out keys. It just doesn't work. If you don't live in the same
town as your rental (and even if you do!), your best course of action
is to find a local business to provide this service. This may take a
bit of research in the area. Check with your cleaning company first.
They may also provide key pick up / drop off services. If not, check
with local management companies, the yellow pages, and the Chamber of
Commerce.
- Step 8 - Create
a reservation confirmation letter. Since you will probably not go
to the initial expense of accepting credit cards online per your website,
you'll want to get a signature in order to authorize credit card processing
(this is generally done during check out via online shopping carts).
I utilize a word document (sample attached) to provide information and
ask the renter to fax back the last page to confirm their reservation.
This also provides a means for check in/out instructions, cancellation
policies, and property rules.
- Step 9 - Determine
your Marketing Strategy. Now that you're ready to start taking rentals,
you're next step is to find the renters. For online traffic, you'll
need to submit your site via search engines. Check with your website
developer or go online to find a company that provides this service.
You may also want to do newspaper ads and/or look for affiliate programs
that cater to individual renters - such as PMBO! Keep an email list
of anyone that contacts you - great for direct marketing at a later
date!
- Step 10 - Don't
forget to track all expenses! You're now operating as a small business
and many of your expenses will count as tax deductions. Talk to your
accountant up front to ensure that you know what qualifies.
... or, use our rental property management software to do the work for you. Click here to get started. |
