Rental property owners have a lot to think about. You need to make sure your company is set up, the lease is signed, and that your tenant is able to pay rent. Not to mention all of the maintenance and management that goes into owning a property in the first place. On top of that, there are other considerations for the property when it is being rented out. Instead of being hands-on with every decision about your property, you might want to hand over the day-to-day responsibilities of the rental property to a property management company. The passive income and rent you earn on your property will continue to come in, but you won’t need to do the work to maintain and manage the property.
Property Management Companies
A property management company is a great way to take the work out of owning a rental property so you can enjoy the benefits without the stress and the time commitment. This means not only do you need the right property management company, but you need a property management company near you.
Having a local property management company means you have a company that knows the area and understands what tenants are looking for. There are thousands of property management companies to choose from, so to make sure you know exactly what to look for, we’ve compiled some critical points.
1. Due Diligence
Of course before hiring anyone, you need to do your due diligence. This requires research to ensure the company’s pedigree as well as the company’s website to see if their services match what you are looking for. Any property management company that is on top of their work is going to have an updated, and easy to read website with all the information a prospective client might need to know.
The website should include some key information including the areas or regions they service, the comprehensive list of services so you know exactly what is included, and a management fee structure.
In a digital-first era, property management companies should have a tenant portal through which tenants can pay their rent and manage disputes. This level of organization is exactly what you should look for in a property management company near you.
Finding a property management company near you that fits your needs and is the best at what they do sometimes requires stepping outside of your office. It is a good idea to network with other professionals to find out who they are using to manage their properties and whether they would recommend that property management company.
Perhaps you even have investment partners who do other property investment outside of your business. They will likely have a local property management company that they use for their properties, and if they think they are good, then that goes a long way.
3. Online Reviews
Online reviews are great because they go beyond what the company displays on their website. The company may already have a review section on their website, which is great. You should take a look at those because they will often highlight the specific benefits that the property management company wants you to know about.
However, reading reviews on websites like Glassdoor.com can give you deeper insights into the company and its operations. Knowing how employees feel about working at a company is a great way to know whether they are the right property management company for you.
For more rental property-specific reviews, check out your local reviews on Yelp, Zillow, and other websites. These reviews go into the company’s good, bad, and terrible sides if there are any. This will allow you to filter by geographical region as well so you can find a property management company that is highly reviewed near you.
4. Talk to Locals
People are always the best source of information. Just like professional networking can help you find a property management company near you, so can the people who live in that company’s managed properties. Asking people for their input from a first-person perspective can give you real insights into what it is like to have the property management company running things.
Some of the most important things for renters are the personal touches a property manager includes in their services. You should igure out if the property manager has a good working relationship with the tenants and whether the communication between tenants and property management is clear and simple. One common area of friction is maintenance requests.
When something goes wrong at your property, tenants will ask for repairs to be made. You should ask tenants what the process is for maintenance and repair requests, and whether the property management company is efficient when solving the issue. Finally, ask them if they are planning to renew their lease. Tenants that are happy with their property management are more likely to renew their leases, and this is an important sticking point.
5. Check the Marketing Strategy
Check out local ads for properties, and take a look at the best-looking ads out there. A good property management company will understand effective advertising and marketing. This will help you rent your property faster and for more time. If their advertisement was effective enough to catch your attention, then there is a very good chance their ads for your property will catch the attention of future tenants.
Finding the Right Match
Finding a property management company near you can be a laborious and lengthy process, but it is necessary if you want to have a successful run at renting your property. Check into every aspect of their business, and whether they are as good as they say. Reviews from every source you can find will help immensely and lead you to the right property management company near you as well. Local is always best, whenever it is possible.
Top 7 Strategies for Investing in Real Estate
Real estate investing is one of the best passive income streams you can build. Buying a property and then renting it out or holding it for future gains when the market is hot is a great way to generate capital over the long run. The industry is huge, with millions of homes sold across the country every single year.
Real estate investing is a broad category though, and it is important to note some of the differences between strategies and which ones are the most lucrative. You want to spend your time on the things that give you the biggest returns, so it is best to focus your efforts. Real estate investment could refer to residential or commercial real estate, but whichever you choose, here are the top seven strategies for investing in real estate.
You shouldn’t jump into any investment without a lot of planning first. This is a big commitment both for your time but also for your capital. That means making sure the timing is right for you. You should also ensure the timing is right for the market. Buying at the bottom of the market when things are slow is a great way to scoop up a valuable property at a discount and hold it for a long time to make a profit.
Buying and holding the property over the long term will maximize your returns and give you the best income as well. Rents often rise annually, but your mortgage payments will remain the same. You can take advantage of this difference and maintain a steady and growing cash flow over the years.
2. Flip It
Particularly for investors working in red-hot real estate markets, this strategy can be highly lucrative. First, you need to find a property with a lowered value due to neglect, lack of maintenance, and possibly an outdated style. Once you buy the property, you can fix it, renovate it, and spruce up the look of the home, and put it back on the market quickly.
Typically fixing the key areas like the kitchen, bathrooms, and increasing the curb appeal through gardening, repainting, and refacing will give you the best returns. This works best in a hot real estate market where it is easy to find a buyer at a higher price point soon after you fix the house up.
3. Short-Term Rentals
A popular rental strategy over the last few years has been the short-term rental, through providers like Airbnb. This is a great real estate investment strategy no matter what your initial budget because you can rent out a space as small as a single room to an entire house. This strategy can require some extra work on your part to keep the property in shape; you’ll also need to manage the guest turnover between stays. However, there are property management companies that can help with your property rentals whether they are short or long term stays and this takes much of the work out of the process.
4. Real BnB
If you enjoy being a host, then instead of just renting a space or a property as a short term rental, you can create a full bed and breakfast establishment. This is more of a full-time job and you will need to be prepared for the time and work commitment. However, if your property is in a tourist hotspot and you like to host people, this could be a great real estate investment strategy for you.
No, this isn’t about real estate investment in Alaska. This strategy stands for Buy, Rehab, Rent, and Refinance. It requires buying a property, renovating it to get it tenant-ready, renting it out, and then refinance the rented property to buy a second one. Eventually, this could lead to multiple properties in your portfolio.
6. Crowd-Sourcing Your Investment
Real estate investment can be a capital-intensive venture that requires tens if not hundreds of thousands of dollars. Crowd-sourcing your investment is a great way to pool capital to buy a property for investment. You can buy into a crowd-funded real state company (options are limited) for often as low as $500, putting you on the property ladder and generating passive income at the same time.
7. Commercial Real Estate
This strategy follows many of the steps of buying a residential property to rent it to a tenant, but this is often a pricier option. Commercial real estate can be several times more expensive than residential real estate and is an entirely different market. The capital outlays will be higher for a commercial property, and the commercial real estate market is heavily tied to the general health of the economy.
Additionally, in a new work-from-home normal, demand for commercial real estate has never been lower as companies look to downsize their office footprints. This still leaves retail locations, dentist and doctor offices, and many other commercial real estate options, though.
One of the biggest benefits of commercial real estate investment is that the tenants rarely have disputes, and when they do, they are much simpler to fix. Residential tenants have particular needs for themselves their families, and this can means that their demands are much higher. Office space, on the other hand, only need to provide space for everyone to work with functioning electricity and internet connections.
Additionally, it is usually more difficult to evict residential tenants if they stop or cannot pay rent anymore. Courts are more lenient in considering their situation as they make decisions about evictions. Commercial tenants do not have the same luxury as they are businesses and are assumed to know the risks of their operations, including the responsibility to pay their rent.
Investing for the Future
No matter what real estate investing strategy you use, real estate investing is a great, long-term, passive income stream that can yield returns for years into the future. All of the strategies above are best used when executed over a long timeline. Real estate as an asset can be a highly lucrative one when approached with a measured and focused business plan, and all transactions should be treated as serious business deals. If you are ever unsure of how to proceed, it’s always best to consult a professional.