FOR RENT: A ‘Financial’ Sign of the Times
Have you ever thought about investing in a house to generate rental income? Having tenants pay the monthly mortgage payment for your investment does sound appealing, right? Be forewarned though; unless you have substantial funds set aside, I caution you against investing in rental property. Air conditioners and water heaters break, roofs need repair and replacement, and vacancies can, and do, happen. However, if you have the desire, and a healthy cash reserve, home/condo/townhouse/duplex rentals can be a profitable undertaking, especially in a low interest-rate environment. Before you call a local realtor though, don’t underestimate the stress associated with the title of “24/7 Landlord;” it has caused some people to regret they ever ventured into a real estate investment!
Stress Relief. Enter the “property management company.” The benefits of utilizing this kind of company to relieve the burden associated with rental-home ownership can be substantial. Granted, all management companies are not created equal, and services vary, but here are a few things a good property management firm can offer its clientele.
On Your Side. Getting quality tenants is crucial, especially in areas like Florida where a transient population can mean frequent rental turnover. A property management company can vet prospective renters. Credit checks can be performed, and research can be done, to make sure the applicants don’t have a history of bounced checks or prior evictions. The property can also be inspected by the company for damage and necessary repairs prior to rental, at a 6-month interval, and when the tenants move out of the residence.
Who Are They Gonna Call? Do-It-Yourself landlords know about the hassle of late-night or weekend telephone conversations about broken appliances and clogged plumbing. A management company may be equipped to take those troublesome calls 365 days a year and arrange for needed repairs (make sure the company will contact you in advance of large expenditures). Gotta love it!
Dollars and Sense. The cost for a management firm varies from company to company, of course. Generally, expenses and commissions are taken out of the rental check before it is sent on to the property owner and a leasing fee and legal fee for the lease may also be part of the deal, but for the peace of mind a property management company offers, it certainly seems worth the additional expense!