One of the leading ways of building wealth is through the ownership of real estate. Careful investment in rental properties generates monthly income over an extended period. The downside of being a landlord is the time and effort involved in managing these properties. You must screen tenants, collect deposits and rent payments, and address maintenance issues. It can be quite a hassle if you are working a full-time job and/or raising a family, especially when a tenant does not pay or emergency repairs must be done. There is a solution that will give you peace of mind.
Property Management Company
A property management company works with all landlords, even if you are just starting out with your first rental. They handle private homes as well as commercial or industrial rentals. Their professional expertise at screening tenants can prevent problems later on. For example, a management company does more than pull a credit report on potential applicants. They take the time to contact previous landlords to learn whether the applicants paid the rent late, caused damage, had noise complaints, or vacated the premises in a messy condition.
Working With Tenants
Upon approving an applicant, the management company collects the required deposits and monthly rent payments. Your tenants do not have any contact information on you. They must deal with the property managers on all matters, including claims of damage.
A property manager will inspect the premises on a regular basis as set up in the lease. For example, you might want a quarterly walk-through to ensure the tenants are properly caring for your investment. If a tenant calls the company about a problem, a management company representative will inspect the problem and decide which party is responsible for repairs. For example, a broken toilet caused by a child flushing a toy is the financial responsibility of the tenant.
Whenever a repair must be made, the management company contracts with a qualified professional at a reasonable price. Many property management companies have their own maintenance staff to handle routine plumbing and other problems. The lease prohibits the tenant from hiring someone to make the repairs. This cost control measure increases the likelihood of earning a profit from your investment.
So how much does this service cost? Some companies charge a flat rate while other prefer a percentage of the monthly rent. The small fee gets deducted from your tenants monthly rent payment. Any needed maintenance, such as contracted lawn service, also gets deducted. The remaining balance is sent to you each month. A property management company offers you the opportunity to increase your wealth the easy way.