A major part of the American dream is buying your own home. But once you’ve got a primary residence under your belt, there’s nothing to stop you from earning a passive income through rental properties, supposing you have the capital and the credit needed to purchase additional properties. The only problem is that not everyone is cut out to be a landlord. In fact, there could be quite a bit of work involved in this scenario that you are ill-prepared to shoulder. Whether you end up with residential or commercial properties to manage, you’ll find that you’re responsible and liable for all kinds of requirements. You may be called upon to handle any problems your tenants bring to your attention, from plumbing issues to termites to noisy neighbors. And you’ll also have to deal with issues your tenants cause. But there is a possible solution: a hired landlord or property manager.
The real question, however, is when is it appropriate to hire such a professional to take over the duties of a landlord for you? And there are a few factors you’ll probably want to consider first. For example, cost is going to be a major determining factor in whether or not you decide to hire help. In order to make rental properties of some sort worthwhile, they have to produce enough income, at minimum, to pay for related expenses. In other words, the money coming in needs to cover the mortgage, the property tax, insurance, maintenance, and so on related to the property. If you can earn a little extra after all that, so much the better. And yet, you need to keep your pricing competitive in order to nab reliable tenants.
Herein lies the problem. With all that expense already on your plate, you must be able to justify the extra cost associated with hiring a landlord or property manager. Now, if you have several properties, you can likely get a package deal and spread the costs across multiple income sources. But if you only have one or two income-producing properties, you might not have the extra cash on hand to make hiring help feasible. Of course, there are other things to consider before you say yes or no.
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For example, the decision to hire a property management company comes with a number of perks. For one thing, you won’t have to interact with tenants. If you have problems collecting rent, your landlord or property manager will do it for you. And if you live outside the area where your rental properties are, your manager will check in on the property and the tenants to make sure everything is shipshape – they’ll deal with maintenance, complaints, and even eviction proceedings in some cases. You’ll need to know what services are offered up front, but this could actually save you from a lot of travel and other expenses in the long run.
There are certainly property owners that have the personality, knowledge, and skill needed to be a hands-on landlord. But if you’re not the type, it doesn’t necessarily preclude you from owning rental properties in order to earn a passive income. You simply have to find a reputable stand-in like Revid Property Management to take the reins for you. Then it’s just a matter of crunching the numbers to make sure the costs are distributed amongst your properties.