Investing in real estate is one of the best things you can do with your money. Time and time again, it’s proven to be a sound investment for consistent cash flow- especially if you’re able to hold the property for a long time. But managing a lot of real estate can be a HUGE pain. Especially if you’re a new investor who is doing everything without a property management company.
What is property management?
The basic idea is that you hire a company to take care of 95% of the issues with the property. For example, they’ll start by finding quality candidates to rent out the space. This reduces your risk and means you don’t have to file through dozens of applications.
Another good example is maintenance. Most property management companies will handle the small repairs on their own. They’ll find out about the issue from the tenant, find and pay a contractor to fix the issue, and then follow up to make sure everything went well.
That’s right- no more 3 a.m. calls regarding a broken toilet coming to your cell phone!
They’ll collect payments, answer any questions that the tenant has, set up new contracts when the old ones expire, etc. Property managers can help with a wide variety of things, it just depends on the type of contract you set up with them.
There is a fee of course- 10% of the total rent is typical. But considering how much time and energy that saves YOU is what makes it such a worthwhile investment.
…But if 10% is too much, there is another way. And let’s face it, for an investor with properties that have low cash flow, you need to look at all of your alternatives.
Introducing- Cloud-Based Software
Here are just a few things it does for you:
- Allows you to setup online rent payments, so your tenants can pay you directly without needing to send a check or hand you cash.
- Easily manage work orders, whether it’s the weekly trip for the gardener or an emergency visit from the A/C repair guy.
- Do your bookkeeping for you, making tax time much easier on yourself or your accountant.
The best part is these solutions cost a fraction of what a property management company would charge and if your property manager uses an online solution, you gain greater insights into how that property is being taken care of!