We sometimes forget that as independent rental owners we are small business owners. We are entrepreneurs and, many of us, are sole proprietors. We like being our own boss (don’t tell my wife). We put the “I” in independent rental owner.
A recent study by international business consulting firm Sage North America found that 43% of small business owners (that’s us) have not taken a vacation in more than five years! Sole proprietors gave the following reasons for not taking time away:
- You’re not there when your clients need you;
- You’re not available when an emergency happens;
- You could miss out on a new opportunity;
- Extra money is going into the business not towards vacations/time away; and
- Even more work will be waiting when you return.
As business owners, our clients (renters) are a 24-7 responsibility. Fire, hail-storms, floods, power outages, hurricanes, and other natural disaster and emergencies uniquely impact our livelihoods. If we have vacant units, it is imperative that we follow-up on all leads. Mortgages, taxes, maintenance, and insurance, who has “extra money”? If you own rental property, there is always work to do.
While we all agree with the above statements, most of us take time off, all of us get sick, need a break, have family commitments, and have hobbies and outside interests beyond our rental housing portfolio.
Our December IRO meeting featured a roundtable discussion about ways we can manage planned and unplanned absences from our properties. I appreciate each IRO that attended and shared their thoughts and insights.
Following are some best practice and tips that were shared:
- Make a list of important personal and business documents and procedures. This list should include electronic usernames and passwords, phone passwords, bank accounts, investors/partners, vehicles, insurance (personal and business), property portfolio details, etc.
- Legal: make sure that your spouse or someone your trust has Power of Attorney in case you are unavailable or incapacitated. Have a “Last Will & Testament” that clearly and precisely delineates to whom each of your assets will transfer upon your death.
- Get a lock box at your bank and place the above list and other important documents in it.
- Emergency Contacts have a list of emergency contacts (spouse, children, etc.) with their personal and work phone numbers and email addresses. Keep this on your phone, in your wallet, in your purse, and in your lockbox.
- Make sure that your family and close business associates (accountant, attorney, partners, fellow property owners, etc.) have your phone number and email.
- Make sure your computer files are accessible in case of an emergency. Backup everything to the cloud. Ensure that you can access your electronic files anywhere, any time.
- Tenant information: ensure that you have electronic and paper copies of all leases, lease addendums, rental applications, credit, and criminal screening, rent roll, payment records, security deposits, pet information, tenant communications (notices, reminders, maintenance requests status, etc.), maintenance requests, and security deposit depositions.
- Create an operation manual. Include step by step instructions on how to post rent, pay mortgages, process maintenance/service requests, etc.
- Suppliers: Create an accessible list of suppliers (plumbers, painters, landscapers, HVAC repair, carpet/flooring, electrical, minor carpentry, foundations, etc.).
- Maintenance Supply Accounts: Ensure that your emergency contacts know your maintenance supply preferences: Home Depot, Lowes, Teague Lumber, etc.
- Preventative maintenance schedule. Create a list of periodic, preventative maintenance and providers: HVAC (coil cleaning & filter replacements), landscape/lawn, gutter cleaning, smoke alarm battery replacements.
- Consider using a service to take your weekend and after-hours maintenance requests.
- Consider hiring a property management firm or realtor to assist. Operational and maintenance issues can be time-consuming. Everyone’s skills, portfolio, and life circumstances are unique. Retaining a firm to handle maintenance and manage tenants is always an option.
This list is not exclusive nor exhaustive. My hope is that it will give you a place to start and some things to think about.
Finally, get to know your fellow AATC IRO members. We are a great resource for each other. We can sympathize with your crazy tenant stories and cover your maintenance calls if you need a vacation. If you need contact information for an AATC member, email Perry Pillow at email@example.com or call him at (817) 616-0354.