Real estate is still a reliable way to make money through short- and long-term rentals. Although managing your property yourself can save you quite a bit of cash, there are times when it will make more sense to hire a property management company to take over some of the chores related to renting out your real estate property. Here are three signs it may be time to contact the professionals.
Your Time Is Suddenly Limited
There are a lot of things involved with managing a rental property. In addition to locating and vetting tenants, you must perform necessary maintenance on the home, collect rent, take care of tenant complaints, manage third-party companies providing services (e.g., lawn care), and deal with any legal issues that arise.
This may not be such a big deal when you don't have any other responsibilities you must tend to. However, it can quickly become burdensome after you experience life changes that limit the amount of time you can spend managing your property.
For instance, children require a lot of time, and the demand only increases the older they get. So, if you have a baby, you may find there just aren't enough hours in the day to get your work done, not to mention you may not have any leftover energy after caring for your child to complete the tasks you do have time for.
Property management companies can do as little or as much as you want. If you find you don't have enough time to tend to your properties any more, decide what tasks you can and want to do, and contract a management company to take over the rest.
You Purchase Property Far Away from Your Residence
Another sign you'll need the help of a property management company is when you start investing in properties that are a good distance away from your residence, particularly if those homes are located in another state.
It can be incredibly challenging managing properties long distance. You'll have to make arrangements for services over the phone (or email) and either find someone who can verify the companies did the job for you or make a trip to check the work yourself. Tenants who pay late (or not at all) will have an easier time dodging you if you're not close enough to pay them a visit in person, and laws regulating evictions differ from state to state.
That doesn't mean you should give up on opportunities to invest in properties in other areas. However, you should look for a property management company that has offices in areas where you want to buy (or already have) property and then work out a deal to have them take over the responsibility of running those rentals so you don't have to worry about the logistics involved with having property far away from where you live.
Your Portfolio Gets Too Big
The more rental properties you have, the more money you'll make and the better you'll be able to weather dips and downturns in the market. The exact number of rental units you need depends on your goals. If you want to make $5,000 per month in rental income, for instance, determine the average amount of profit you hope to extract from each home and divide your goal by that number (e.g., $5,000/$500 per month = 10 homes).
However, more homes mean more responsibilities, which often results in less time for other things you might want to do in life. Unless you enjoy spending all your time managing your investment portfolio, it's a good idea to transfer some of the chores to a property management company to free up your time and energy.
To learn how a property management company can help you, contact a local sales agent.Share