Are you expecting your Santa Baby to fill your stocking with a duplex and checks this year? The idea of owning investment properties is often sold as an opportunity for easy money. Once new investors have jumped in to the world of owning rental properties, they quickly realize there is a lot more involved than cashing a check. On the surface, it seems renting out property only requires finding tenants to live in the house or apartment, collecting payments, and occasional maintenance for your property. Realistically, owning a rental property involves so much more than occasional up keep and communication with the tenant.
As a property owner you are responsible for:
Listing the property
Preparing the house for tenants
Providing pictures and descriptions for listings
Communicating with utility companies
Communication with leads
Filtering through applications
Ensuring your property is legally up to code
General maintenance of property
If you are looking to invest in rental property, it is important to consider the duties you will be tasked with once you are responsible for someone else’s residence. Although you own the property and it is legally yours, it is the place your tenant will call home. It will serve as a safe place for the residents, and most renters are hoping for a comfortable dwelling. As a landlord, you are the point of contact that your tenant will turn to for everything at any time of day. This shouldn’t scare you away from your investment opportunity, but you should plan wisely how you will handle these situations.
Chances are, if you are already in the business, you know how demanding being a landlord can be. Investment properties often are a source of side income that ends up taking all of your free time. If you work a full time job and have a family, just managing two rental properties can eat up what little free time you have left. It may leave you feeling defeated and considering selling to no longer be responsible for all the ins and outs of managing the property. On the other hand, the extra income might be worth keeping the property. If you want to relieve yourself of your headaches without losing your extra income, consider hiring a property management company to manage the time-consuming tasks involved with renting out your property.
What are property management companies?
Property management companies exist to do exactly what their name says- manage others’ properties. While it isn’t uncommon for property management companies to own some of the properties they manage, the majority of their work comes from managing properties for other owners. Some property management companies serve only for residential properties, but you can find management for commercial property as well.
As a rental management company, they take the burdensome tasks off property owners and handle the headaches themselves. They act as a middle man between tenants and property owners so property owners can stay in the loop, but don’t have to be overwhelmed by the day to day tasks. As such, managers will handle creating and updating listings, filtering through applications, setting up utilities, filtering work orders and arranging maintenance. Property managers can handle as much or as little as property owners request.
Should I Hire a Property Management Company?
If you have made up your mind that you do not want your schedule to continuously be consumed by the daily tasks of your investment property, then ultimately you have a few options- sell, hire your own property manager, or hire a property management company.
Selling your property will completely rid you of the time-consuming tasks of owning investment properties. You might be able to walk away with a lump sum of money based on where your finances stand pre-sell, but you will lose recurring income and growing equity.
Hiring a personal property manager is an option, but may not be the most efficient option for you. By setting up your own property management, you will have to decide how you want your management to run. You will need to find and possibly purchase a software company to organize data in order to access and provide access to information everyone needs. You will also be responsible for paying an employee.
This may seem like a good idea, but if you own just a few properties it might not be cost-efficient OR save as much time as you are hoping for.
The last option you have in claiming back your personal time is hiring a property management company. The benefits of hiring a management company are endless.
You will receive access to resources you wouldn’t otherwise. A property manager will list your property on their established website and social media and will advertise for you. By having an established site and social presence, they will already be gaining attention from potential tenants. They likely will also have access to popular rental listing sites that people are already using to search for properties.
They will be the point of contact for your tenants and will handle all communication necessary. From managing applications, to taking late night emergency maintenance calls, to delivering eviction notices…rental property managers act as your voice.
One of the most beneficial services you can receive from a property management company is the handling of maintenance. Upkeep of your own personal home is almost a full time job. Adding in every maintenance request from the tenants of your investment properties could consume your well-deserved free time. Companies that manage investment properties have their own resources to organize work orders and often have their own teams to resolve the maintenance issues, saving you money in the long run.
Imagine opening your email to see daily/weekly reports of what is happening with your investment property without having to handle any of the cumbersome business yourself. You only have to step in to manage what you desire to manage yourself.
So if you find that Santa Baby fills your stocking with a duplex this year, give yourself the gift of time by hiring a property manager. Then all that’s left is to cash your checks and do whatever you want with your new-found free time!