Do you want to make money while doing zero daily work?
Well, my friend, that is called a passive income, and it's how many financially-savvy Americans are protecting themselves against a recession.
One of the most common ways to create a passive income is to own a rental property. However, as many landlords know, owning a rental home is not exactly passive.
Being a landlord means responsibility, which is why many landlords use property managers to outsource the work.
However, before hiring a property manager for rental maintenance, you should know where your money is going.
Read on to discover what costs are covered!
1. What Is Property Management?
Property management companies are companies that work to make your life as a landlord easier.
While you technically own the house and are putting in the financial risk, the property management company takes on the daily responsibilities associated with rental homes.
For a fee, property managers may help you advertise your property, screen tenant applications, collect rent, perform property checks, and generally field questions/maintenance requests.
Although using a service of this type means that you'll take home less money each month, it also means that you can sit back, relax, and forget that you own a rental property.
2. Consider Rental Maintenance
If you own your own home, you'll surely know how much maintenance goes into it. No matter how nice or new your home is, things are sure to break, leak, or need to be repaired.
If you're handy, you may be able to fix some of these items yourself. However, outsourcing the trickier problems to a professional is often necessary.
When you own a rental property, you will be responsible for maintaining your rental home as well.
This begs the question: what is the responsibility of the property manager versus the homeowner?
More specifically, who covers maintenance costs?
When hiring a property manager, it's crucial that you understand what costs are and are not covered.
Although each management company may have a different setup, a common framework is that the property manager deals with the tasks related to maintenance requests (receiving the requests, hiring the maintenance workers, scheduling the repairs) and the homeowner will cover the related costs.
3. Cost of Property Management
Property management costs will vary based on your area, but you can expect to pay around 10% of the monthly rent on the property for a manager.
There may also be hidden fees or additional costs to consider, such as these maintenance costs that come up.
When deciding to purchase a rental property, you must factor these costs in to ensure that your property makes you money, not costs you.
As for whether or not a property manager or maintenance repairman is worth it, consider how much time and effort you're willing to put in.
Should You Work with a Property Manager?
Unfortunately, there are very few money-making strategies out there that require literally zero work for you.
However, using a property manager and outsourcing as much work as possible will allow you to focus on other endeavors.
For more information on property management and related issues, check out our blog! There, you'll find some tried and true tricks for rental maintenance!