If you are getting into residential real estate investing and plan on renting out the properties, there’s some important information you should have first. Though some refer income from real estate investments as “passive,” there’s nothing passive about being a landlord or property manager. Many have jumped into the industry as a side-gig to make extra money on top of their 9-5, only to find that being a property manager is a full-time job in itself. The following insights will help you come to a better understanding of what property management really entails.
- Understand the costs. First, you have to buy the investment property at the right price to ensure you will have long-term success. You need to know exactly how much you plan to lease out the home for and for how long so that you know how to set the rent. But, you also need to consider recurring costs like insurance, maintenance, and taxes. Going into the real estate business with little to no research is a surefire way to lose money.
- Understand the time involved. Being a property manager takes time. You have to figure out how to market your rental, screen applicants, and draw up a legally-binding lease all before you see any income. Then, you will be on call to assist your renter with any issues they have with the property. If you have a particularly troublesome renter, you could spend a significant amount of time every week interacting with them. And if things get really bad, the eviction process is notoriously time consuming and drawn out.
- Understand Landlord-tenant law. These laws are different in every state, and are incredibly important for property managers to know. A violation of these laws can cost you big. Depending on the situation, it could mean that the renter is free to leave without paying out the rest of their lease, or even a potential court case with fines and legal costs. And, of course, legal issues will eat up even more of your time and energy.
These are just basic, preliminary things to consider before taking the plunge into property management. If anything above gives you pause, then being a landlord is probably not the right move for you. It requires flexibility, patience, and good people skills to do the job well.
But, just because you don’t have the time or desire to be a property manager doesn’t mean that you can’t profit from real estate investing. That’s where Norniella Management Company comes in. We are a full-service property management company that will take care of all landlord duties for a clear, reasonable fee. This means that you are free to keep your day job while truly getting passive income from your investments. Call us today at 888-979-5357 to learn more about our services and pricing.