Module 2 – So You Want to be a Landlord… Really?
Lesson 2 – What Are Your Options?
I always say if you would describe yourself as a person who has their heart on their sleeve then you don’t want to manage properties. You will get chewed up and spit out. So what are your options if you want to own rental properties?
What is your goal for having a rental property? Your goal will determine what you do today. For example: If you are an investor and you plan to remodel and sell the property within 12 months you will make very different decisions than if you inherited grandma’s house and you plan to keep it in the family.
Having said that here are a few options:
- Hire a professional property manager. A good property manager is worth their weight in gold. They handle everything including finding and dealing with tenants, monthly accounting, maintenance and managing your property according to the law to protect you and your investment. They are a wealth of information and can make your life very easy. They become a part of your investment team which should also include a good tax advisor, attorney, insurance agent and realtor.
- Hire a professional property manager to get you the great tenant and then you manage. This is called Tenant Placement or One Time Rental. This is a great option if you don’t have much experience in renting a property, you don’t have the time to find a tenant or you just don’t want to do that part of the process anymore. A professional property manager has heard it all and know all the stories. This is where the property manager really works for you to find a qualified applicant that will be a great long term tenant.
- Do it yourself. This course is about learning to manage your properties yourself or get help when needed. You can certainly do it yourself but keep in mind do you have the time, temperament, and willingness to learn best practices (and the law) for running a successful business? Just like you can manage your own investments some people choose to hire a financial planner instead. There is no right or wrong it is merely what you feel comfortable doing.
Consult your tax advisor since owning a rental is an asset there are times when it makes more sense to hire a professional and get the tax deductions, sound advice and risk management that comes with a professional property manager.
Back to what this course is all about… I know you can do it and over the years I had many clients that managed successfully themselves. Sometimes, they hired me to get them the tenant, other times if their life was too busy (think parental care giving or a new born) they would have me manage full time and when things settled down they would take the property back and do it themselves. You are never locked into working with a professional. They should be there to support you.