Property management is an excellent way to build residual income through real estate.
Owning a home is great, but wouldn’t you rather be managing rental properties for income?
Here are some important facts about managing rental properties and why they’re so lucrative.
Successful property managers manage multiple properties
Successful property managers and landlords have multiple income sources that enable them to earn more money.
Most managers and landlords have three to five sources of income from their rental properties. But if you’re able to scale, you can do even better than that.
Using the latest property management techniques, landlords using a professional team have more than ten properties under management. They can accumulate different income sources by continuing to expand their property management empire.
The important thing to remember when managing rental properties is not to get in over your head. As your rental properties expand, you’re going to need help managing them.
Many property managers are hesitant to hire outside help because they want to oversee everything themselves. But as long you hire slowly, your management team can gradually expand to help administer your properties and stay profitable.
Property managers typically make about 10% of the rents as their fee for managing properties.
If you’re managing a high rent complex, you’ll enjoy a larger income while doing the same amount of work as managing a lower rent unit.
So, it pays to have some high rent properties mixed into your portfolio as well.
Technology helps property managers manage their properties profitably
Technology has made being a property manager, landlord or real estate investor even more lucrative than ever before.
Property managers can automate most of the process and eliminate most of the horror stories that used to come with managing rental properties and tenants.
Dealing with tenants, payments, evictions, repairs and communication issues like a professional is much easier with the digital tools now available. Rental property owners and managers are now able to handle more properties with less effort.
Using software apps, you can safely manage rental properties anywhere in the United States from the comfort of your home. All you need to take advantage of these new apps is a computer and a smartphone.
Own your properties for even more income
Rental properties are a tangible investment you can control.
Unlike other investments where you hand over your money and hope it’s managed properly, rental properties are a physical asset with real returns.
When you manage your properties, you have the ability to increase your returns and protect your investment.
Owning property free and clear is easier when someone else is paying for it. Rental property owners and managers are able to own multiple properties free and clear while enjoying a nice residual income stream. As the owner of the rental property, you only have to deal with your own tenants and not those of other owners.
Professional managers have systems in place to protect rental properties from bad tenants and deferred maintenance issues that could wipe out their returns.
You can reduce the risks and increase the income when managing your properties like a professional.
Typical property management questions
Some people still have some questions about the property management process.
- What exactly goes into a great rental property management team?
- How does the property management process work?
- If rental properties are such a great investment, why isn’t everybody doing it?
- What are the risk factors of owning rental properties?
- How much money do I need to get started?
- What type of property makes the best investments?
- How much money can I really expect to make?
- How do I make repairs? (what if the glass pantry door breaks?)
Rental property investing is not a get rich quick scheme, although new homes in Utah County are definitely hot right now.
Rental properties have been a source of income and wealth generation for thousands of years. They are also one of the safest and most consistent asset classes to invest in.
But they have to be properly managed. As long as people need somewhere to live, there will always be a demand for rental housing.
How do you find these tips? Have you made any investments into real estate? Let me know in the comments below!