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Property Management 101

So you’ve just purchased a new house and decided to keep your former home as a rental property. That’s a great investment … but also a lot of work. Before you decide to take on the
role of landlord—quite possibly a long-distance landlord—consider the pros and cons of hiring a property management company to do all the hard work for you.

Just what does managing your own property involve, exactly? It isn’t as easy as it seems. First, you need to find potential renters for your abode. That means listing your place online
and uploading professional looking photos to get some interest. You’ll also need to give potential tenants a walk-through before they sign on the dotted line. (Not so easy if you’re living in a different state.) Once you find a potential candidate, you’ll want to run a background and credit check on this person to make sure they are a good bet for paying the monthly rent
(and to make sure they don’t have a criminal record!).

Once you’ve found the perfect tenant, you’ll need to make sure they are taking care of your investment and maintaining the property. And of course, home maintenance problems inevitably come up. Who’s going to handle the late night call when the upstairs shower leaks or when the AC conks out? You’ll also need to find repair people and make sure these companies are charging fair rates and doing good work. Some renters may also want monthly property maintenance—mowing, leaf pickup, snow shoveled—included in their agreement and that can be a difficult thing to manage on your own. And of course, there’s the monthly rental fee. Someone needs to make sure the money is getting to you on time … and swiftly following up if the “check is lost in the mail.”

After reading this hefty to-do list, you may wonder who wouldn’t want to hire a property management company? Truth is, their services do relieve a lot of the burden of renting your own property as long as you’re kept in the loop of major decisions. Of course, you do have to pay them, which cuts away at your monthly profits. Most management companies charge a finder’s fee once they’ve found a suitable renter (often the first month’s rent) and then take a percentage of the tenant’s monthly rent for themselves (usually somewhere between 8 to 10 percent). But perhaps it’s worth that in the long run!

Source: DLP Marketing

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