America’s rental property market has been growing steadily over the last several years. Analysts expect this trend to continue during the years to come. People are increasingly choosing to rent rather than buy a home for numerous reasons. Many fear they can’t afford all the extra costs that come with homeownership. Others simply don’t have the credit standing they need to qualify for a mortgage loan. Some have decided it’s just best to take a more short-term approach.
Taking Advantage of the Situation
Though the general public is increasingly veering away from the prospect of purchasing property, that doesn’t mean everyone should follow suit. In fact, if you’re thinking of investing in rental properties, now is the time to do so. You’ll find ample listings on the market and few buyers with whom to compete. With help from NRIA, you could certainly find suitable investment properties to add to your portfolio.
To Manage or Not to Manage
As a rental property owner, you’ll have a number of decisions to make. What to include in rental agreements, which tenant screening processes to use, and whether to invest in single- or multi-family units are only a few of the choices you’ll face. Whether to take care of the property on your own or hire a property management company will also come into play. Each option has its own benefits and disadvantages.
The Do-It-Yourself Approach
If you’re a hands-on person, the DIY approach may be your best option. Keep in mind, though, there’s a lot of work involved in managing a rental property. On the surface, you have to deal with marketing, screening tenants, collecting rent, and allocating funds appropriately to name a few elements. In the event a tenant fails to hold up his or her end of the agreement, you’ll also have to handle the legal aspects of eviction and collecting back rent.
There’s also the more physical end of the spectrum to consider. Measuring rooms, reading serial numbers on fixtures, and choosing interior color schemes is one thing. Installing flooring, replacing water heaters, making plumbing and electrical repairs, and replacing broken siding are entirely different matters. All these factors have to meet local building codes as well. Otherwise, you’ll be up against hefty fines and penalties. If you find you’ve bitten off more than you can chew, hiring contractors will enter the mix.
Turning to the Professionals
Professional property management companies handle all the work on behalf of their clients. When you hand over the reins to the professionals, you don’t have to worry about finding tenants, purchasing materials for repairs, comparing contractors, or any of those other aspects. Property management companies have working relationships with professionals in various segments of the industry, so they know who to turn to for maintenance and repairs.
That being said, bringing professionals into the picture comes at a price. You have to pay for their services as well as those of the contractors they hire. All the financial matters are your responsibility; the property management company simply handles the money and legwork for you.
All Things Considered
You may save a great deal of money in the long run by managing your rental property on your own. Of course, you’ll need to be proficient in marketing, bookkeeping, construction, electrical and plumbing work, and a wide range of other tasks. Hiring a property management company takes a great deal of the work off your shoulders, but you’ll pay a little more for the lighter workload. Think carefully about your situation and which alternative works best for you before making the final decision.