Two quick questions…
Here’s the first: When you wake up and then go about your day… are you filled with joy as your mind runs through all the exciting possibilities concerning things like property maintenance (including cleaning gutters and clogged toilets), filling tenant vacancies, and checking up on how to comply with the latest state and federal laws concerning taxes and fair housing?
If so, stop reading this article. You shouldn’t be thinking about real estate investment ‒ you should probably start your own property management company!
If you’re not really excited about those kinds of topics, though, that’s probably because you’re an investor at heart. You see rental properties as an investment vehicle ‒ you want cash flow and profits, not a bunch of logistical and legal hassles.
So here’s the second question: What are your two most valuable resources (beyond yourself and your health)?
Well, I guess you could answer that different ways, but these two are probably right up at the top: time and money.
Time is really the more important, because what is life, if not time? And interestingly enough, one great thing about money… is that it can buy you time. (Ever bought an express pass for a theme park? You’ll never go back to standing in line for hours at a time again!) The two definitely complement each other.
So… you’re an investor at heart, and you place a very high value on your time and money. Since that’s the case, you need to partner with a solid property management company.
Leveraging Your Money
Here are three ways a property management company will help you leverage your money…
First, consider that they know how to maximize your rents. This is a combination of knowing the market very well, dialing in effective advertising, and screening tenants on your behalf. Add it all up, and it means you’re not leaving money on the table in terms of the rent you’re collecting.
Next, they save you money in terms of maintenance.
For one thing, property management companies typically have access to vendors at a discounted price, so the monthly fee you pay them gives you a big bang for your buck. Any issue that comes up, they can get someone qualified to attend to it ‒ quickly and affordably.
It’s also a matter of schedules and procedures. It’s their job to know how often a roof needs to be replaced, when certain items need to be inspected or updated, how long that coat of paint is going to last. Such routine maintenance can mean the difference between a mere repair bill ‒ and a full-blown crisis, where a neglected maintenance issue ends up costing you more than just staying on top of the situation would have.
Last, there’s legal and tax compliance issues. Falling behind or inadvertently failing to comply in these areas can cost you money, including the possibility of legal fees. A good property management company stays on top of all this for you.
Getting the Most Out of Every Minute
You’ve probably noticed that every item mentioned above would cost you a lot in terms of time if you handled it yourself.
Market research, advertising, and screening prospective tenants ‒ all very time consuming. And a good property management company will do all this faster… and better.
And maintenance? Give me a break. You’re much better off tweaking your cash flow spreadsheet than the compressor on a tenant’s refrigerator.
What about tax compliance and legal issues like fair housing regulations? Again, if that’s your skill set and passion… you should be a CPA or a lawyer. Those aren’t the skills you need to hone as an investor. You should be looking for more and better deals to increase your net worth, not frittering away countless hours getting bogged down in legal details.
Remember: you got into investing as way to fund your lifestyle. Like we said at the beginning of this post ‒ life is time. Time to do cool stuff with your family and friends… time to travel… time to play… time to reflect… time to live.
It’s Not Real Complicated
In conclusion, you invest to live. You don’t live to invest. So pay the typical five to ten percent of your monthly rental income to a truly professional-grade property management company.
It’s a small price to pay for greater net worth over time… and more time, period.
Give us a call at (801) 990-5109 orschedule your free appointment hereto build a personalized Wealth Plan. We’ll help you understand how RP Capital can help you leverage your time and money effectively, so you can live the life of your dreams.