Andrew Carnegie understood the power of owning real estate. In fact, according to Mr. Carnegie, 90% of all millionaires become so through owning real estate. Whether youre looking to become a millionaire or not, there are many benefits to owning rental properties. Investing in real estate provides an investor with long-term appreciation, tax benefits, wealth building, investment diversification, and passive income to name a few.
But with all good things, there are always risks. Real estate investing comes with its own risks: liability, inconvenience, and accounting are just a few of the risks and hurdles of owning rental properties. However, those hurdles can be overcome by hiring an experienced property manager. The role of the property manager is to protect your investment, make your life easier, and ensure producing income from the rental.
Liability of Owning Rental Properties
Every home comes with some level of inherent risk, and some homes have features that offer even more risk and potential liability. However, knowing what is a potential liability and how to mitigate and prevent those is essential. Property managers, especially those that are licensed Realtors, are experienced in identifying potential risks and can offer methods to reduce those risks. For example, if a homeowner opted to not hire a property manager and a repair was needed, the homeowner may decide to repair the issue himself. However, by doing the work yourself, you can increase your liability if the work wasnt done correctly, wasnt done up to code, or worse if a tenant died as a result of those repairs. Property managers can help mitigate such risk by hiring licensed and insured contractors to complete necessary repairs.
Property managers also provide added assistance by routinely inspecting the property to identify any issues prior to them occurring. Its important to hire a property manager that is experienced and is working to not only protect your investment but to protect you as well.
Inconvenience of Owning Rental Properties
Ask any landlord or property manager when something goes wrong at a rental house, it always seems to occur in the middle of the night or on the weekends. Owning a rental property means that you are responsible for the leaking faucet, the clogged toilet, the malfunctioning AC unit, and every other major or minor issue. By hiring a property manager, you arent inconvenienced when those middle of the night weekend calls come in about a pipe burst. In fact, tenants call the property manager who arranges having any issues taken care of—and you arent inconvenienced in the process.
Depending on how you structure your lease agreements, you may also be responsible for lawn maintenance, routine seasonal maintenance and more on top of any tenant requested repairs. Again, the benefit of a property manager is to schedule and coordinate all repairs and maintenance. Without a property manager, you as the owner, are responsible for not only scheduling the maintenance but meeting each contractor at the property. You can avoid these hassles by simply hiring a property manager!
Rental Property Accounting
Keeping up with security deposits, […]
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