We all enjoy the financial security and freedom real estate investments offer us, especially those who manage and own multiple rental properties that turnover a steady stream of passive income monthly. In fact, nothing beats the satisfaction of knowing your profits cover all your operating expenses and mortgages, leaving you with a respectable sum to spend on whatever you like and invest even more.
However, when we say “passive,” the process of managing multiple rental properties can be very exhausting. As the clock ticks closer to rental dues, some tenants can be a headache to handle. And, while you’re not working in the usual office space, property management is equally as hard, and sometimes even harder when you encounter fixing-up projects that require a huge budget. So, we propose a solution to make all these problems go away, and that is to build your own property management team!
Can’t I Do It Alone?
We won’t deny that the idea of building a property management team may have raised some eyebrows because if you’re doing fine alone, why else would you want to introduce extra people that could cost you more? The answer is quite simple — your time is money, and all the time you spend worrying about fixes down to the last detail is time not spent on more productive things like browsing listings and making even more money.
Sure, you may find it satisfying getting to handle things by yourself, but if you have any plans of scaling up and managing more, there’s only so little you can do by yourself. Adding more working hands and thinking minds into the equation is the sensible choice to lock in more profits, and here are the things you need to consider.
#1 Hire a Professional Property Manager
The core of your property management team is a professional property manager; he’s your point-person and oversees all the major management functions that you’d usually accomplish yourself. Likewise, you’ll want to ensure that he is competent and well-experienced, so make sure to screen them properly and do a background check to guarantee their experience.
- Experienced with Handling Tenants: Handling tenants may be one part of the job, but it’s often the most difficult part when you consider the tenant horror stories that happen everywhere. You’ll want someone who’s good at building professional relationships but is also firm on your set rules and capable of evicting a tenant.
- Quick Response Time: Since the property manager is your point-person, you should expect a quick response time so that you’re updated on what’s happening and will be immediately notified if anything of concern happens. The last thing you’ll want is to be left in the dark, only to one day find out that you’ve incurred some significant expenses on your monthly statement.
- Very Flexible: While property managers are expected to have general communication and administrative skills for their position, the job description requires a lot of flexibility. Hence, you want someone resourceful and can work around different challenges. There’s a whole lot of uncertainty and spontaneity in the real estate market, and you wouldn’t want a property manager who gives up midway.
#2 On-contact Service Team
Apart from your property manager, a significant portion of your property management team should include an on-contact service and maintenance team that can do the heavy lifting. Commonly, property managers have their select on-site maintenance personnel, but on the off-chance they don’t, you’ll need an experienced group of people with a portfolio for competence.
- Extra Manpower: Renovations and fixes aren’t done by magic, they require a huge chunk of time and effort to get done, and your on-contact service team will serve as the extra manpower necessary for the job. There’s also the benefit of having more affordable services since they’re regularly working for you, so you save on costs in the long term.
- Good At Fixes: Like your criteria for the property manager, you want a team of people who have experience and a portfolio to prove it. So whenever you decide to do some forced appreciation on a property to increase curb appeal and overall value, you won’t have to worry about running into unnecessary problems.
But, You Have Other Options, Too
Of course, while we recommend assembling a property management team, there are alternatives that you should consider if you don’t want to go through the hassle of screening. It may cost you a bit more, but with these options, you get a guarantee for quality standards because they’re a business.
- Hire a National Property Management Firm: National property management firms are excellent to work with, and while they have a minimum unit criterion and monthly fees, you get an excellent staff. Many of these firms also have many connections for services to get competitive prices on fixes like plumbing and termite control.
- Hire a Local Property Management Company: Much like the previous option, a local property management company offers the same benefits but at a smaller scale. The upside is that they specialize in the city/state they are located in, and they can directly report to you in person.
Understand Your Opportunity Cost
Overall, there are numerous benefits to assembling a property management team or choosing to hire one, and with all the time it frees up, you can turn your income-generating assets into full passive mode. So, be sure to understand the opportunity costs of all options and see which trade-offs you prefer.