Want your real estate portfolio to grow? Don’t self-manage!
Real estate is a strong investment that is often a conversation piece with friends and colleagues. New investors are excited as they scout out their first purchase and cannot wait to reap the rewards of owning an income property. It is crucial to understand what owning an income property takes and how it differs from managing your own home.
Property management is a 24/7 job. Literally, your tenants may call 24/7 and expect emergency support when a pipe bursts or lock is frozen. This hinders your ability to vacation or turn off your phone at night. Here are a few reasons why self-management will slow down the growth of your real estate empire.
Your 40 hour work week will double. Managing even one rental property is a hands-on task. You become a leasing agent, marketing firm, 24/7 emergency support hotline, handyman, and debt collector, just to name a few. If you cannot commit to your rental property every day of the year it will quickly become a liability.
Tenants expect and deserve fast communication and resolutions. When an issue arises, you must act fast to keep your tenant happy. Tenant and landlord conversation are not always pleasant and must be handled professionally. In the digital age, even a single family home on a quiet residential street can have a poor reputation if tenants feel neglected.
A property management company provides purchasing power. Managers enlist sub-contractors every day for tasks such as snow removal, pest control, handyman services, and many others. Not only are the rates favourable, service often is as well. Did the furnace break down in the middle of the night? A manager will have a trusted contact on speed dial.
Growing a real estate portfolio is not a side job. Sure, you can manage a single condo on top of a full-time job, and generate $100-$200 per month. However, an effective approach to property management includes education, research, industry knowledge, legal knowledge, accounting, and strong sub-contractor relationships. Professional managers will help you grow by providing advice on new purchases while operating your existing portfolio effectively.