October 17, 2019
Investing in rental property is a fantastic way to generate passive income, but the operative word here is “passive.” While being a landlord doesn’t have to be a full-time job, the responsibilities add up and can complicate your primary career and your personal time. Here’s how rental agents can offset the effort and expense of active property management, allowing you to enjoy the dividends.
Do you know how to price your rental with confidence and promote your listing? In a renter’s market, do you know how to attract the right tenants without compromising your bottom line? A qualified renting agent does, and he or she can help you maximize your rental income using location-specific, current market data. A professional rental agent will give you a solid idea about where you stand based on school district, home value, amenities, number of bedrooms, and zip code.
Do you have time for open houses, walkthroughs, in-person interviews, and application reviews? Do you have access to the best background reporting services without paying retail fees? Tenant screening isn’t just about adding up the numbers and taking a wild guess at character and responsibility. It’s about Equal Housing Opportunity compliance and understanding local laws relating to short and long-term residential contracts. Most problem tenants and costly, contentious evictions are easily avoided through careful applicant screening.
Imagine you’ve rented out your primary home or your vacation condo, but you live hundreds of miles away. An appliance breaks, flooding the basement. A fire breaks out, or you need to show up because your ideal tenant’s family emergency requires them to break the lease and request an immediate pre-vacancy inspection. If there’s nobody but you to step in, how will it affect your other obligations? Will you be able to hop on a plane to meet insurance adjusters, oversee repairs, and ensure your property is in good shape when the tenant pops the keys in the mail?
And let’s not forget:
Noise complaints: Partying, loud music or TVs, and arguments
Tenant conflicts: Parking spaces, laundry room etiquette, or smoking in common areas
“High maintenance” tenants: Those who make frequent petty complaints, or elderly or disabled renters who benefit from courtesy checks
Monitoring and reporting neighborhood crime affecting the property
The unexpected happens. More often than you’d think, and Murphy’s Law has a habit of kicking in when you’re on deployment, on a cruise, or in the middle of a high-pressure business deal. Professional property managers know how to handle emergencies, acting on your behalf to protect your investment, coordinate with contractors and insurance companies, and oversee (or reduce) turnover.
How diligent are you with changing the batteries in your smoke and carbon monoxide detectors? Do you really change your furnace filters every 30 days and clean out your gutters each spring and fall? All of these tasks are part of your rental property’s routine maintenance program, as well as other responsibilities to ensure you remain compliant with local codes. If you’re not on top of it, you could get into trouble.
Property managers use special software with options customized for their clients’ preferences and properties to stay on top of routine and requested inspections, upkeep, and repairs. What’s more, using these tools allow them to generate reports and consult with you and your preferred contractors. This reduces your annual maintenance expenses and decreases the risk of expensive emergency repairs.
Eviction law is tricky enough without having to deal with hostile tenants or, let’s face it, otherwise wonderful renters experiencing financial distress. Maybe you purchased a tenant-occupied building and inherited the former owner’s nightmares. Property managers can step in and objectively assess a situation, make objective realistic recommendations in favor of or against eviction, and handle the eviction process legally and effectively.
Most experienced managers have connections with reputable attorneys specializing in landlord-tenant laws, and experience keeping their clients compliant.
Do-it-yourself property management may work for you if you live in the area and have a flexible lifestyle, but if you’re concerned about focusing on your retirement or primary career, a property manager can save you money, protect you from liability issues, and serve as your local representative.
If time, upfront capital, or logistics are holding you back from participating in the lucrative world of real estate investment, consider REITs.
REITs offer investors a 100% passive opportunity to add commercial real estate to your portfolio. Investors get all the benefits of real estate ownership, without any of the hassles!