If you’re thinking about investing directly in rental properties, you’ll need to make a big decision about how to do it, namely: A.) Are you going to manage these properties yourself, or B.) Will you hire a property manager to handle them for you?
If you’re looking to create a job for yourself as a property manager, then the obvious choice is A. But if you’re trying to retire early on a passive income from rental properties, then B is likely the right option.
But if you pick A, you should know that “you’ll never be free from a job.” And if you choose B, “you can’t be your own property manager.”
That’s the advice of Seth Williams, an investor, commercial real estate banker and founder of REtipster.com, a real estate investing blog. It’s not hard to see which choice he would make.
“I started buying rental properties because I wanted the freedom that comes with passive income,” he wrote in a guest blog for online real estate magazine Bigger Pockets. “I knew this would only be possible if I put someone else in the driver’s seat (someone with WAY more competence and experience at the job than I have).”
Here are some of Williams’ reasons why hiring a professional property manager makes sense:
- They know how to find great tenants, and get rid of bad ones.
- They have connections with all the right people – contractors, inspectors, service providers, etc.
- They handle the monthly accounting statements and cash distributions on each property.
- Perhaps most importantly: “They handle all of the tedious, mundane, miserable and skilled labor that I either don’t want to do, or I have no idea how to do myself,” he noted.
Good property management comes with a cost, of course, which Williams estimates at 10 percent of gross rental income. But for that, they save him a lot of time and money and do the job far better than he could do it himself. And, “in the end, I’ll sleep much better at night.”
Of course, this doesn’t mean you can’t manage properties yourself, and pocket that 10 percent. But you better make sure you’re already an expert or willing to become one.
“Whether you take the do-it-yourself or the hire-an-expert route, you’ll need the proper tools .”
But whether you take the do-it-yourself or the hire-an-expert route, you’ll need the proper tools to help manage your portfolio. The best way is to have an automated property management system, like SKYLINE Property Management Solution for Residential and Multi-Family Properties from Anton Systems.
It’s used by thousands of property managers and owners to streamline operations and reporting and to improve and control cash flow. It covers property management from A to Z.
Let’s start with move-in processing. SKYLINE comes integrated with a lease creation module that transfers detailed applicant information into an active occupant file with a single keystroke, then stores that information electronically for quick and easy retrieval.
One of the most difficult, and most important, tasks of property management is responding to tenant maintenance requests. SKYLINE easily creates detailed work orders and schedules and tracks routine preventive maintenance tasks. It dispatches both in-house and contracted service calls and records and tracks all job activity, including time and expenses. It also includes a facilities maintenance and work order processing function that enables tenants to submit requests online, a must-have in today’s rental world.
Additionally, SKYLINE’s Tenant Relations Management (TRM) module tracks and manages all past, present and future tenant interactions, which are automatically date and time stamped. Its Electronic Tenant function helps you automate the creation of tenant correspondence, late notices, rent statements and letters to tenants.
And of course, SKYLINE provides powerful general ledger and accounts payable accounting and reporting to handle your portfolio’s finances.
Property management made more manageable. That’s what SKYLINE does.