SINGLE-FAMILY VS. MULTI-FAMILY PROPERTY MANAGERS
Owning rental properties is a great source of passive income. But, is it really passive if you’re working as the landlord instead of hiring a property manager? Property managers might cut into your margins, but they provide an invaluable service that’s going to help you continue your life as usual without worrying daily about what’s happening at your properties. Make no mistake, you will still have to react to issues but it will likely be the exception, and not the rule. For a more pure passive real estate investment, you will need an asset manager, but I digress…
Rethinking being a landlord is especially true if you’re in the military, a frequent traveler, or if you’re living overseas (or planning to do so). In all of these situations, you may not be anywhere near your rentals, making it more difficult to juggle everything and still turn a healthy profit.
From my own personal experience and from what I’ve learned over the years, I can tell you that being a landlord at a distance is not ideal. Here are 8 reasons I wouldn’t recommend it to the existing or aspiring passive real estate investor:
- Payment Collection Is a Nightmare
- It’s Difficult to Remain Objective
- Tenant Screening Requires Your Full Attention
- Landlords Wear a Lot of Hats
- Tenant Issues Are Hard to Handle
- Rentals Need Constant Care
- Market Conditions Change Over Time – It’s Hard to Keep Up
- You Location May Not Be the Best for Rentals
It’s possible to successfully manage a few doors from out of state or overseas without a huge problem. The cost of a property manager might not be worth it if you only have a few properties to track. While it will still take up some of your time, it could be worth it in the long run if the time commitment remains low.
However, every door added to your portfolio means a little more of your time each month. The more properties you’re managing, the more that time commitment multiplies.
For a truly passive, hands-off investment experience, you need to get someone else involved.