The downsides of using a management company are that you lose day-to-day control over the property and have to trust them to deliver the same level of customer service you find acceptable. But, they’ll also have more experience handling management situations, along with their own team of people they call for repairs on all their properties, which may be more cost effective in the long run. While they take care of all the issues with the property and tenants, you’ll be free to pursue other investments. This is really the most important question you can ask yourself before deciding on a buy-and-hold. Do you want the long-term responsibility of a rental property? If you can confidently answer this question, and all the previous ones, then it is time to start researching properties in locations that will give you the greatest pool of possible tenants and the best return on your investment. Plan your leases accordingly by avoiding vacancies during winter months when less people are moving. Get organized with either a management company or the proper software to help you oversee the property. Keep tenants happy because their rents are your monthly income. My final word of advice is invest wisely, understand the commitment that a rental property requires, and be prepared so your investments in buy-and-holds don’t ultimately turn into buy-and-folds. Am I Ready to Become a Landlord?
It all comes down to the tenants’ needs and what they are willing to pay for the duration of their lease.”
This of course is similar to renters. Obviously they don’t want a house with broken down appliances or walls falling in, but as the owner, you have to decide whether certain upgrades like new cabinetry or flooring will be worth the expense. Question whether these added renovations will increase the value and yield a higher rent as a result. The home is still livable with Formica countertops instead of granite, but you may see lower rents. It all comes down to the tenants’ needs and what they are willing to pay for the duration of their lease. If they are comfortable with an extra $30 a month for an alarm system, then go ahead and install one.
Can I Manage it on My Own?
This all depends on three things: your level of experience, how many properties you currently have, and whether you want to deal with the tenants directly. If you are an investor who wants to gain more exposure to single family rentals, then becoming a property manager is a great opportunity. You’ll need the time and proper rental software to help you with basic accounting, leases, rents, and listing the property. However, if you have multiple properties across different locations, you’ll need to find time to visit each property for an inspection, collect rents, listen to tenants’ complaints, and hire all the maintenance yourself.
ATTOM Data Solutions • P11
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