Thanks to the growth in the Orange County Real Estate Market many Real Estate Investors have been finding great investment homes in this area. But the question that every person who is considering buying a home to rent out is this: is it a good idea to hire a property management company?
The Whole Purpose Behind Investment Properties
As a Real Estate Investor, the one of the top goals is to generate positive cash flow and every person who plans on buying a Southern California home, for an investment property, should ask themself if they are generating enough positive cash flow from their rental home to hire a property management company.
A typical property management company will charge between 5-10% of the homes monthly rent. This can easily amount to $200 or more per month in a lot of cases. That’s why it’s important to think about the importance of cash flow before hiring a company to manage a rental home.
Property management companies typically use their fees to provide the following services for the property owner:
- Rent Collection.
- Payment of bills associated with the home.
- Landscape maintenance or on-call maintenance for the home.
Where Is The Home Located?
The next deciding factor behind hiring a property management company is where the home is located.
For example: if the Real Estate investor only lives five minutes away from the home, it may make more sense for them to manage it themselves but if it’s 45 minutes away, or longer, it might make more sense to hire a property management company to manage the home for them.
Ready For Managing A Rental?
The most important question that every Real Estate Investor should ask themselves before hiring a property management company is “am I ready to manage a rental home”?
If the answer to this question is yes, and you are ready for such tasks as: rent collection, dealing with tenant problems, making repairs, trouble shooting and the other issues that come with owning a rental then it might make sense for them to manage the rental home themselves.
For those Real Estate Investors who just want to make money without a lot of hassle, it might make more sense to hire a property management company to manage the property. This way you can keep the focus on their investments and growing their Real Estate investment portfolios.
To learn more tips about investing in Orange County Real Estate or to view the latest homes for sale, contact Fred Sed & Associates today at (949) 272-0125.