When you decide to become a landlord, there are both pros and cons to consider. The biggest plus, naturally, is that you can use your property to earn a passive income. In some cases this can not only help you to pay down the mortgage on the home and cover extras like homeowners insurance and property tax, but it could even provide some additional income, depending on the property, the area, and the market. And if this is the case, you can use the extra money to avoid some of the negatives that come with being a landlord, such as collecting rent, inspecting the property, scheduling maintenance, and responding to complaints about needed repairs. With your extra passive income, you can hire a professional property manager to do this for you. Of course, there are a few things you’ll want to consider before you select a candidate.
First, you should choose a local company, or at least one that has a local branch. Many homeowners keep former homes as rental properties when they move. And the reason they hire a management company is because they are absentee landlords, unable to easily check on the property on a regular basis or see that repairs and other work are completed properly. If this is the case you definitely want someone local that can quickly and easily get to the property if needed. But you should shop around before making your selection.
A good way to go about choosing a property management company is to set up in-person consultations so that you can meet prospective managers face-to-face. This will tell you a lot more about them than conducting interviews by email or phone. However, you should also get references. Almost as important as interviewing property managers is speaking to their clients to find out if they are available, attentive, and good at their jobs. If a property manager can’t provide you with any references you should keep looking. You want to make sure you hire someone that other satisfied clients are willing to endorse.
You also need to talk about pricing, and there are several different questions to ask. Generally speaking, you can expect to pay about 5-10% of the gross income from rent. But you also need to understand that there could be additional costs. You need to find out exactly what the monthly fee you’re paying buys you. For some management companies, a low up-front rate may only cover rent collection. So you need to start asking questions. Does your monthly fee cover visits to the property for inspection or other purposes? Does it include taking calls from tenants? What about arranging for repairs to the property? Will they handle evictions and find new tenants?
You need a list of everything that is covered and what you will be charged extra for, as well as how much extra. This is a matter of exercising due diligence. In most cases, property management companies are not unfair, but you have to understand the arrangement so you know what you’re agreeing to. When you take the time to behave like a smart consumer, you shouldn’t have much trouble finding a reputable company like TriQuest Management Services to manage your rental property for you. And this can save you a lot of time and stress when you elect to turn your home into a source of passive income.