Property Manager Lead to Passive Income
Property managers may seem like the most unnecessary piece of the Core Four, but that is incorrect. A realtor, broker, and general contractor all save you time and money, just like the property manager. The property manager is what makes real estate more of a passive income stream vs. active. Trying to manage the property yourself creates additional stress and is another side business that you may not have wanted to get into.
Property Managers Leverage Resources
Right of the bat, understand a good property manager will have numerous resources that you likely do not have. When it comes to making maintenance or repair calls, a property manager has a team ready to go or a company on speed dial. A good property manager has relationships that were built on years of previous jobs and networking.
If you live in the town you’re buying property, you may think you can do it yourself, but what do you do when something big happens? You will search the web for a company and hope they do a good job. And, unless you have witnessed a similar repair, checking the work may be a guess job. A property manager has seen it all before and can make sure the job is done right. It all starts with sending out a team that has been tested and approved on other jobs.
If you do not live in the same area, this is even more worrisome to attempt a repair on your own because you aren’t there to quality check the work. Now, you have to blindly take the word the repair technician did the work correctly. All this can do is cause stress on your and your tenant.
Property Managers Select The Right Tenant
Speaking of tenants, a good property manager knows what to do to get the highest quality tenants. Problem tenants and eviction rates go down significantly when you have a property manager. Why is this? Because, the property manager has a rigorous application and background check process. They also play the “bad guy” when it comes to tenants who want something extra, like pets in your property when you explicitly said no pets. As the owner, you will tend to have some sympathy for fluffy when you talk to potential tenants. Property managers are not. “Sorry, the owners said no pets.”
Property Managers Help Expand Your Portfolio
A good property manager is also you ear to the ground for potential new properties. The conversation when you choose your property manager should include a discussion on your goals in real estate to see how they align with your property manager. They are fully aware of the rental prices in the area and can help you with your deal analysis. Also, if they come across a property that meets your criteria, they can give you a heads up. Many times, when someone wants to retire from real estate and sell their property, the property manager is the first to know. You may be able to get an off market deal with minimal effort.
Conclusion
A property manager’s value comes highest from piece of mind. You have other things to stress about, like finding more deals. Make sure the numbers work in your deals to include a property manager, and let the cash come in while you relax. You will get top quality renters and not have to manage repairs. If you read books on rental properties or BRRRR, you will hear about horror stories of those who tried to go about it alone.
Disclaimer
Once again, I am not a financial advisor. These tips are some things I have validated with my own personal experiences. If you feel you need more personal advice, please consult a professional financial advisor. Dont forget to check out the Book List for published authors on this topic!
