There are property investors and managers who are successfully balancing thousands of rentals while making millions. And that is not done by one person trying to juggle all those properties. Instead to build a real estate empire, it is built on a successful system. Without a system, all property investors and managers will be limited in what they can accomplish in portfolio of properties. You can only be in so many places at once, which is literally the case with your rentals. Collecting properties without a system will result in loss of income, vacancies, disrepair, evictions, and ultimately, stress.
Property managers duplicate themselves to manage 3 things: money, tenants, and properties
all three are necessary for a functional rental. In order for a property manager to manage thousands of rentals, they must duplicate themselves. There are three ways to duplicate yourself:
1. Independent Contractors
Independent contractors will always be a part of a property manager system. While there is more financial overhead with employees (such as tax withholdings), obtaining that kind of control and loyalty might be necessary to effectuate your system. Under the IRS rules, someone is an independent contractor if the property manager has the right to control or direct only the result of the work. Under those same rules, someone is an employee if the property manager has the right to control what will be done and how it will be done. Finally, technology can be a way to keep those overhead costs and automate certain aspects of your system (like rent collection or credit checks).
System to Run Your Rentals
How do you direct and grow your employees, contractors, and technology to function in an orderly fashion to maintain the money, tenants, and the properties? A house built on sand will not stand for long; but instead you need a solid foundation: a system.
A system is made up of your corporate structure, strategy, standard operating procedures, and contracts. Every new property when purchased should begin in your entity structure. Possible tenants should start at the top of a funnel that may effectively filter out the bad tenants from the paying tenants. Rent should be handled in a secure yet convenient manner, while reducing and quickly eliminating issues of non-payment.
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