Everywhere I look at the moment, people seem to be buying investment properties. I find interesting the number of people who don't understand the effort and time that is often required to successfully rent a property out to tenants and maximize the return on your investment.
As a time-poor investor myself, I usually find that the most cost effective and time efficient way to manage a property is to use a professional management service. Many people doubt this, probably because there's usually a fee involved, but I really do believe that the experience of a manager can help to maximize the value of your property and the returns you receive.
Guess what? Properties don't just rent themselves out! Good quality tenants need to found (i.e. advertised to) and then deemed suitable. Experienced property managers will have proven screening systems in place and possess the know-how required to approve credible applicants. Remember, vacant days and high tenant turnover are expensive and can reduce the return you will receive in the long run.
A property manager may also be hugely helpful when it comes to difficult tenants. Do you want disgruntled residents calling you about a leaking roof or broken toilet? I certainly don't! A manager acts as a third party between you and your tenant so you don't have to deal with any disputes.
Setting a market appropriate rental price is a very important aspect of maximizing your investment returns. Property managers have the experience in market analysis needed so as to maximize the rental rate your tenants are paying, without setting it so high that the property is empty.
Tenant inspection and property maintenance are ongoing issues with investment properties. Not only can these activities be time-consuming if you take it on yourself, they can also be expensive. Property managers have a huge network of contacts with whom relationships have been established over time, the same as you will have in your own profession. These contractors will often charge the manager less than if you as an owner were to just pick somebody out of the phone book.
The process of renting out a property is accompanied by a vast array of legal requirements, covering everything from when rent is considered overdue to the use of double sided deadbolts on doors. These laws tend to be complicated and can be accompanied by inconvenient consequences if not followed correctly. Dealing with rental properties everyday, a professional property manager will be well-versed with all legal aspects concerning your property and can thus reduce the liability on your part.
As you can see, there really is a lot to take into account when renting out your property. In my experience, the value of using an experienced professional property manager can often outweigh the costs associated with doing so. Please feel free to contact any member of the Century 21 team for information about buying an investment property or our property management services.