A lot of people with money to invest, but a limited amount of time to spend on a business venture turn their eyes toward real estate as a passive income generator. While by no means a work-free investment, you can do a lot to minimize your overall time investment.
You can start small with one or two single-family homes, for example. If you’re interested in buying a multi-family property, like an apartment building, you employ the services of a property management company. Not sure what those companies do?
Keep reading for a quick overview of five main property management duties.
1. Collect Rent
One key duty for a property or resident manager is rent collection. This may take the form of collecting and depositing checks. It can also mean running an e-payment system that lets residents collect online.
Many tenants prefer online payments, so offering this option can improve tenant satisfaction.
Every property requires some level of maintenance. Much of this is routine maintenance, such as lawn care, snow removal in parking lots, and annual checks on communal laundry equipment. Unfortunately, it also means emergency maintenance, such as plumbing problems.
A property management provider, such as Reedy and Company, will typically handle maintenance through in-house staff or schedule specialized maintenance.
3. Market and Lease
A major headache for property owners is the marketing and leasing process. This calls for showing homes or apartments, running background or credit checks, and managing the paperwork. It’s one of the big offenders for soaking up time and energy.
Property management companies routinely take on all of the tasks associated with marketing and leasing properties. That means everything from writing marketing copy to selecting a company to run background and credit checks.
4. Understand the Relevant Laws
Not every investor wants to invest where they live. Maybe they want to own property in the small town where they grew up or run across a good deal while traveling. Keeping track of local, state, and federal regulations in multiple locations can prove challenging.
Property management firms already keep track of these regulations, which helps you maintain compliance.
Many property management companies also provide bookkeeping services and prepare the appropriate reports for your business accountant. This helps ensure that your investment operates smoothly and that your taxes get paid on time. It also lets you keep an eye on the financial health of your investment without crunching the numbers yourself.
Property Management Duties and Your Properties
The core property management duties almost all revolve around saving you time. Tasks like scheduling maintenance, marketing and leasing, and bookkeeping are all time-intensive duties. Keeping up with the applicable federal, state, and local regulations can turn into a nearly full-time occupation by itself.
Using a property management company is a good way for you to build a passive income stream that only requires periodic time and attention on your part.
Looking for more ways you can streamline your investments or build passive income? Check out some of the other posts in our Business section.