Four best time saving tips to assess your capability to manage your investment property solo.
Editor’s note: Part none of this real estate series: 3 Steps You Must Take Before Investing in Real Estate
If you’re considering investing in real estate, it’s easy to get caught up in the excitement of shopping for properties.
The ease of scanning listings on real estate apps means that you could scroll all day if you wanted. But it’s crucial to remember that finding the right investment is just the first step. The next one (which you should already be considering) is planning how to manage the property.
If you own several properties or you’re in the market for a short-term rental, choosing to use a management company is a no-brainer. In either case, maintaining the homes and tending to tenants can easily become a full-time job. It will be crucial that you consider the company’s management fee, which can range from 7-14 percent of your rent each month, during your search.
However, if you only own one or two long-term rental properties, it might feel like highway robbery to fork over that much money every month. After all, managing a single property requires about as much time as maintaining the home you currently live in. There are often months where the tenants don’t need a thing because everything is in working order.
So, what if I told you that with a few tips, managing your own property might be a viable option?
Consider the four time-saving tricks below and assess whether or not you feel prepared to manage your investment yourself:
1. Make Upgrades so You Don’t Have to Be There
A small upgrade like installing a keypad lock that allows you to set entry codes remotely can make all the difference for owning a rental. You can coordinate services and maintenance without having to trek to the property to let someone in every time. As an added bonus, these little niceties may even appeal to potential renters.
2. Get a Home Warranty
You can further remove yourself from the maintenance and repair process by buying a home warranty. This will cover a number of repairs for the cost of your premium plus a service call fee. All you have to do is file a claim (often online), and they’ll find a tradesman and schedule the service with your tenant.
It’s important to note that the warranty isn’t a failsafe, though.
When it comes to major repairs or replacements (like a new HVAC system), they’ll likely only cover the cost of a system equivalent to the one you currently have, even if it’s 20 years old. In cases where the cost of a new system or appliance isn’t fully covered, you may be able to take a check and coordinate service yourself.
This is a good idea because the warranty company is looking for whoever will work for the lowest price, not who will do the best job. For an important system like your HVAC, it’s worth the hassle of finding your own provider to ensure it’s installed well.
3. Use Your Real Estate Agent as a Resource
For those times when you find yourself coordinating service for your property, don’t forget that you have a secret weapon — your real estate agent.
Your agent likely has a list of service providers that he or she trusts and works with regularly. Don’t hesitate to ask for a reliable recommendation instead of spending hours vetting vendors.
4. Have a Local Contact
If you’re looking at properties in another city, it will be important to have an arrangement with someone close to the rental who can step in during emergencies for an hourly rate.
Whether it’s a trusted handyman or your real estate agent, the goal is to have a person to call when it’s necessary for someone to be present at the home. With this arrangement, it’s unlikely that you’ll ever have to scramble to make a long drive or catch a flight if something goes wrong with your property.
Obviously managing your own investment property, even with these tips, does take time. However, even during months when there are higher maintenance demands, you can keep things manageable with a few easy tricks.
As your real estate portfolio grows, it might make sense to hire a property manager, but until then, if you can manage the property yourself, you’ll be able to maximize your profits.