Today I’m hosting a post from Jennifer Riner of Zillow. As you know, real estate is a huge part of my passive income strategy and if you can find a property that cash flows even after a hiring a property manager you’ve found a great investment. Read through the post below and let us know wht you think in the comments section!
Property investments require more time than some might assume. Placing rental advertisements, scheduling showings, corresponding with potential applicants and meeting prospects are just a few of the initial steps toward filling apartment vacancies. Some investors hire help to manage their properties and tenants while personally handling financial and administrative duties. Contracting assistance is often recommended, but not always financially smart. After all, employee salaries cut down on maximum profit.
To determine whether hiring professional property managers (PMs) is necessary, weigh the following advantages.
1. Free to Relocate
Investors personally managing their properties are often required to reside close to their rentals in case of tenant emergencies. For many rental property owners, living onsite is a struggle. While living onsite saves money, it’s similar to sleeping at the office – where unwinding from “work-mode” proves difficult. Plus, tenants may be tempted to take advantage of landlords’ proximity and ask for trivial favors during non-business hours. Owners who hire onsite staff to assist with management benefit with more freedom to move across town – even across state lines. Depending on prior experience of potential employees and owners’ willingness to release managerial control, residing in different regions of the country isn’t out of the question. If anything, investors with teams benefit from increased vacation opportunities.
2. Add Expertise
Amateur investors might want to seek out advisors, especially more seasoned managers who can maintain tenant satisfaction and property upkeep. Veteran PMs ensure obedience of all housing regulations and property laws on local and federal levels. They get together with companies like Roofing USA to ensure your home is meeting all of the guidelines. Fair housing guidelines are tricky, and new landlords should be weary of potential lawsuits against their assets. PMs can help landlords avoid legal infringements before they occur.
3. Minimize Daily Hassle
It’s difficult to become a “people-person” without already having the qualities necessary to succeed in a customer-focused role. Many prefer to work behind-the-scenes, handling paperwork and contracts rather than supervising maintenance and facilities. And, some people don’t have the patience for handling the needs of individual lessees, especially in multi-family properties. Further, facility issues can be tough to tackle, especially when searching for plumbing experts, electricians or carpenters. Experienced landlords can recommend the best repairmen in town without having to search through extensive reviews or risk overpaying for services.
4. Balance Career
Some investors view rental properties as part-time ventures – and some are more time-consuming than others. However, it is possible to balance career, personal life and investment property responsibilities. New investors with full-time careers can hire landlords to help with day-to-day necessities. Hiring PMs yields more time for locating other property investments or diversifying portfolios to ultimately increase gross income.
The aforementioned benefits might seem great to all investment property owners, but not pertinent. Property managers charge around 4 percent of total gross income for multi-family buildings to 10 percent of total gross income for single-family homes. The percentages vary due to the vast income difference between apartment complexes and single-unit rentals. For instance, landlords managing single-family properties might make $100 for a $1,000 per month rental (10 percent). Landlords managing multi-unit properties might make $1,000 for a multi-unit building that brings in around $20,000 per month (5 percent).Take these additional costs into consideration – do the benefits justify the costs? If so, hiring property managers is the right move.