Why You Should Always Use a Property Manager
When you’re investing in real estate, it’s natural to look for ways to maximize cash flow. One common cutback is to manage the property yourself. Now, it’s one thing to consider managing a rental property if you live nearby. It’s another if you’re thinking about managing a property out of state. We recommend never managing a rental property yourself, whether it’s a turnkey rental or a rental that you bought and rehabbed yourself. Here are all the reasons why you should always use a property manager.
You Don’t Want a Second Job
Managing even one turnkey rental by yourself is akin to becoming an employee in a second job. Is that what you wanted when you decided to invest in real estate? No, it isn’t. But if you try to manage your turnkey rental without the help of a property manager, that’s exactly what you’ll be – an employee. And you’ll be working for your tenant. You’ll be answering their phone calls, managing their rent payments (or late payments), reporting their payment history to them, repairing their broken faucet/hot water heater/screen door and basically being at their beck and call 24/7. And those are just some of the tasks that property managers take on for you. If you go it alone, you’ll also be responsible for making sure their utilities are all paid up (even if they pay their own electric, you don’t want the power to be turned off in your unit, right?) mowing the lawn and handling any neighbor complaints. And don’t forget evictions. If you don’t hire a property manager, you’ll be calling the sheriff yourself and spending at least one day at the county courthouse. Oh, and now that your unit is empty, it will be your problem to market the rental, interview applicants, run background checks, get contracts filled out and deposits taken to the bank. Whew! If that doesn’t sound like a second full-time job, what does?
You’ll Be Able to Scale Your Business
When you hire a property manager for your first turnkey rental and subsequent rental purchases, you have the option to scale your business. Ultimately, what most real estate investors want is to build a portfolio that will support a passive income lifestyle. The only way to do this is with a property manager. If you’re spending your personal time looking after one or two properties and tenants, there’s little or no time left for looking for new deals, analyzing them, networking with investors or doing anything else to grow your business. It’s just not possible, whether you live next door to your rental or in the next state. But when you hire a property manager, your time and resources are free to scale up and build your business. In fact—and this is something not much talked about—your property manager is a rich resource to scale your business. Your property manager is connected to real estate trends and area landlords. Existing rental property owners often get leads for their next rental property purchase right from their own property manager.
You’ll Have Reduced Liability
Property managers indirectly help you to reduce your vulnerability to legal claims due to their record keeping practices. For example, your tenant claims that they scalded themselves because the thermostat on the water heater malfunctioned. When you have a property manager in place, you’ll have clear records that show that the water heater thermostat was just replaced prior to move-in. That will make it pretty hard for the tenant to claim that it’s your fault. Or let’s say that an applicant says they were discriminated against. If you were going it alone, you’d be hard pressed to prove that you don’t discriminate. But with a property manager in place, there will be processes and guidelines in place that show no tolerance for unfair discrimination.
Repairs Done by Experts
As a rental property owner going it alone, you’ll be responsible for all the repairs and maintenance of your rental property or turnkey rental property. That means when something breaks you’ll either have to repair it yourself or replace it. Unless you’re the most handyman or woman on the planet, you’ll likely run into challenges that are above your capabilities. What will you do; try to wing it or will you spend the time and money calling in an expert? And if you do try to wing it, you could get dinged for doing unlicensed repair work. Even something as “simple” as replacing a broken electrical socket requires the services of a licensed electrician. Repairs done by a lay person (i.e., you) may render your property insurance or warranty null and void. Not to mention the dangers involved in attempting home maintenance and repairs that are beyond your abilities. Save your money, time and investment by hiring a property manager. They’ll send in the correct, licensed professional to take care of whatever’s needed in your rental property. This ensures that all your maintenance is done by qualified individuals and that you won’t run into town permit problems in the future.
Whether you’re buying a turnkey rental out of state or a rental property in your hometown, it just makes sense to hire a property manager to take care of it. No matter how you look at it, property managers are well worth the cost, even it they do cut into your cash flow just a little bit. If you’re ready to start looking at turnkey rentals right now, just browse through our online listings. All of the MartelTurnkey rentals already have a property manager in place so you can focus on building your real estate investment portfolio.