Most of us know from experience that there are two types of landlords:
- The kind that does everything in the building themselves, (most likely while wearing overalls): Collects rent, cleans out common areas, repairs all units.
- The kind you never see. Does all of the above duties via a contractor.
Tenants don’t care what kind of landlord you are, as long as the home is properly cared for. So now that you are considering owning rental investment property, consider which of the above types of landlords you would like to be.
In our experience, the second kind of landlord is both preferable and profitable. When you buy a turnkey piece of property, it is tenant-ready. But inevitably something will need repair and, unless you are a professional home contractor, it is not worth your time to do repairs on your own.
A good property manager is usually worth more than the 10 percent of monthly rent that they earn. Some of the things you can expect from them include:
- Screening and accepting new tenants
- Collecting rent and getting you paid on time
- Quick turnaround for tenant’s needs such as keys, repairs, etc.
- Good connections with contractors who will show up on time and work for a reasonable price
- Communication with the local municipalities for permits, inspections, and more
We suggest interviewing a few property managers when you purchase a new home. Find the one that communicates with you efficiently and in the way you prefer. If you’re big on text, make sure they can text when you have questions. Make sure they seem open to questions because you will often have questions. Make sure you have good chemistry. It is important not only to trust them, but also to like them! This is an important relationship after all!
Owning turnkey property is not the cash cow some people think it is. It doesn’t earn you a big cash dump. It earns you a slow and steady stream of cash. Because of the small but steady stream of cash, it can seem like there is little money to spare. Often that is true. But you can’t skimp on the property management. Suck this one up because it is a tax deduction after all! Property managers are worth their weight in gold and are the key to a success or failure of your investment property!