Investing in real estate is one of the wisest choices you can make, especially if you start when you’re relatively young. It is an excellent way to grow your portfolio, generate passive income and create generational wealth for your children and grandchildren. However, one thought holds many people back from taking that first step.
“But I don’t want to be a landlord!” is the most common objection against buying an income property. There are other reasons that people hesitate, of course. They may feel nervous about the market or confused over how to begin. They may think that they don’t have enough money to invest. However, not wanting the headaches and hassles of becoming a landlord is often at the top of the list.
The real estate market is changing! Prices are down, there’s less competition and it’s the perfect time for investors. Find out more below:
- Could Buying Real Estate During A Recession Be A Genius Investment?
- Five Best Cities In Ontario To Buy Recession-Proof Investment Properties
- Will Real Estate Protect You In Times of Inflation?
The Perfect Solution
You can eliminate almost every problem by hiring a property management company. What does this mean for you? Think of all of the things you may have to deal with when you have tenants:
- The hot water tank needs to be replaced
- The plumbing backs up and there is water all over the floor
- The water won’t turn off
- The HVAC suddenly stops working
- The toilet won’t flush
The longer you own your income property, the more likely some problems will arise. However, your tenant calls the management company, not you, whenever there is an issue. A good property manager takes all of the hassles off your plate and can even handle the simple, repetitive tasks like vetting tenants, signing lease agreements and collecting rent payments.
Of course, there is a cost involved, but it is worth it not to get those frantic calls at 3:00 in the morning when something goes wrong.
Do you want to know more about how real estate investing can help you grow your wealth? These other posts will give you some insight:
- How To Generate Passive Income From Your Primary Residence
- 6 Neighbourhoods in Guelph For Buying An Investment Property
- Everything You Need to Know About Building A Secondary Suite
How To Pick The Right Property Management Company
The right company can make your investment experience a dream come true. However, the wrong choice can turn your dream into a nightmare. How do you know if the company you’re considering is up to the task? Like vetting a tenant, a background check can save you a lot of trouble.
The first step is to make a list of top contenders to consider.
If you know anyone who has successfully invested in a rental property, you may be able to get a referral. Otherwise, you can begin your search online.
A quick Google search for “property management companies” turns up millions of pages. You can narrow it down by searching for local companies and seeing if they have any reviews. Of course, reviews don’t tell you the whole story, but they can help you weed out the bad apples. The key isn’t to find a company with only 5-star ratings, but to find one with many reviews from real live clients.
Another way you can search is to find third-party review sites and see who they rank most highly.
Is the time right for you to buy your next investment property? You can see our available listings right here.
How To Interview Potential Property Management Companies
When contacting property managers, the first thing to note is how fast they respond to you and their level of professionalism. This observation gives you a good indication of how well they will serve your tenants. If a potential company responds quickly to your requests, there’s a good chance that they will also treat your tenants well.
Once you have your list narrowed down to your top three to five companies, it’s time to set up some face-to-face or online interviews. Here are a few questions you should ask any potential property manager before signing any agreements with them:
How Long Has Your Company Been in Business?
Most companies are legitimate, but the Internet has made it easy for anyone to create a professional-looking website and start a business with little to no experience. Red flags to watch out for are saying they have “combined experience” or passing off unrelated work history as property management experience.
Where Locations Do You Serve?
Be wary of companies who try to spread their services too thin. Ideally, you want someone who knows the area and has reputable contacts with contractors, real estate agents, lawyers and other local professionals.
What is the Worst Problem You’ve Ever Faced?
Any property management company that has been around will have dealt with a myriad of problems. Their solutions will indicate how well they can handle the specific challenges of your property.
How Do You Vet Tenants?
Finding the right tenant can make or break your investment. Your property manager should have a solid process to make sure they rent to someone who pays on time and takes care of the property.
How Many of Your Tenants Renew Their Lease?
Long-term renters are the key to success when owning an investment property. A high turnover means your unit stays vacant longer and reduces your income. In addition, you have the advertising expense of finding a new tenant. A manager with a history of maintaining long-term relationships with tenants is a valuable asset.
How Will You Handle Maintenance Requests?
Every property will need repairs and maintenance sooner or later. Your management company should have clear procedures in place to ensure your property is taken care of quickly and at the least possible expense.
What Do You Charge?
Their fees will depend on many factors, and you don’t necessarily want to hire the company with the lowest price. However, the contract should spell out exactly how much they are charging and not have any hidden fees under the guise of “administrative expenses.”
What If A Tenant Doesn’t Pay?
The property manager should have a plan in place if a tenant doesn’t pay. This may mean anything from gentle reminders to starting the eviction process.
What is Your Process When a Tenant Moves Out?
When a tenant gives notice, the property manager should have a process to find a new renter as fast as possible, so the unit doesn’t remain vacant for long.
A good property manager has to be organized, proactive and have excellent attention to detail. They should also be empathetic and compassionate with the ability to be firm when necessary. After all, they are dealing with people, so customer service and negotiation skills are imperative.
Finding someone who checks all the boxes can make your experience as a landlord easier and more pleasant than you ever thought possible.
Are you ready to take the first step in investing in real estate? Here’s how the GoWylde team can help you.