One of the best ways to manage money better is to learn how to invest. One of the best ways to invest is to get into real estate. One of the best ways to get started in real estate is to buy rental properties. One of the best ways to reap the rewards of rental property ownership is to make finding good property management your central investment focus rather than aspiring to become a landlord, yourself.
The Challenges of Managing Your Own Rental Property
It’s not always a good idea to become a landlord if you want to spend your time searching for other real estate investment opportunities or if you’re looking for a passive income source to build your wealth.
Landlords struggle with many challenges when taking care of their property. These range from desperately advertising their properties for rent in local newspapers to fill vacancies to threatening slow-paying or disruptive tenants with eviction notices.
Hiring a Property Management Company
Imagine buying a great property but you lack the marketing and sales skills to attract tenants. It’s a daunting situation to be in. Instead of trying to figure things out, find a property management company in your area. If, for example, your property is in Austin, then hire an Austin property management firm to grow your rental business.
You will increase your revenue over time when you adopt a simpler business model, when you have reliable rental income, and when you improve tenant retention. Let’s take a closer look at these three ways of increasing your revenue from your rental properties:
A Simpler Business Model
Although managing property is anything but simple, it can be easy from your point of view. By hiring professionals to take care of all the complicated details of property management, all you have to do is pay their fees for all the services they provide and cover all advertising, renovation and maintenance expenses.
Reliable Rental Income
Your property manager will make sure there are few vacancies and will quickly try to get the vacated property rented out again. They will use their marketing and sales skills to attract tenants and their customer service training to make sure tenants are satisfied with their new homes. They will also ensure that the property is attractive and well-maintained and will promptly issue work orders to an on-call team of service workers when repairs are necessary.
Improved Tenant Retention
Although tenants move because of a job relocation, a new relationship, or a desire to live in some other part of the state or country, they also move because they are unhappy with their living situation.
Here are some of the main causes of frustrations that force people to move out of a rental house or apartment:
- They cannot afford to pay the rent. Many property owners like to progressively increase their rents so that they don’t get accused of rent gouging. Tenants who found the initial rent manageable because of their income level may later find themselves unable to keep up with the constant demand for more money every time they renew the lease. Since their income has not increased but their rent keeps going up, they fall behind when they pay the rent, which leads to late fees. Eventually, when they don’t have the money to pay the rent at all, they leave.
- They are frustrated with poor maintenance. Tenants tire of the slow responses they receive from landlords when they complain about pest problems, leaking faucets, and clogged toilets. Eventually, they get frustrated and leave.
- They have found better places to rent. Tenants may leave when they discover they can find a far better place to live at a cheaper rate elsewhere.
A property management company tries to make sure that tenants don’t leave for these types of reasons. Property management companies will try to avoid arbitrarily increasing rents, will respond quickly when repairs need to be made, and will make an effort to ensure their rents are competitively priced for the area.
These tips will help you find property management resources to increase the profitability of your rental property investments.