Almost every Real Estate investor or individual who owns multiple homes will at one point have to make a decision regarding hiring a property management company, to manage their Rental homes, or continue the regular tasks of managing those homes themselves.
What Is My Cash Flow Percentage?
An owner of a rental home or investment property must always look at what their cash flow situation is first, before making the decision to hire a property management company. A property management company will charge between 5 and 10% of the home’s monthly rent. If you aren’t earning significantly more on the property, it doesn’t make sense to hire a professional company to manage the property since it will significantly cut into your cash flow.
How Close To The Property?
The next question that a Real Estate investor must think about is the distance from their home to the property. Does it make sense hiring a property management company so you don’t have to drive all that way to manage the property yourself? Your time is valuable, and gas is expensive, so the cost of a property manager may not be that much more, or may even be more cost-effective.
For example it’s understandable for a Real Estate investor who lives in Orange County to hire a property management company for a home that they own in San Diego. But for the investor or owner of multiple rental properties to consider hiring a property management company, for a home that they own in their same town, it might make more sense for them to consider managing that property.
Are You Ready For Becoming A Handyman?
Owning an investment home is a great way to generate positive cash flow and build equity over time, but it also comes with the commitment for the landlord of having to step in and make minor repairs and do handyman work.
If an owner of a rental home or investment property isn’t ready for the possibility of doing handyman work on a home it might make more sense to hire a property management company so they don’t have to worry about having to make all of the repairs or handyman work that can sometimes come with owning an investment home or rental property.
To learn more tips about owning a rental property in Orange County or to view the latest homes for sale in the area contact Fred Sed & Associates today by calling us at (949) 272-0125.