Investing

Following Fair Housing laws is critical in both preventing lawsuits and shielding yourself from liability if you are sued.  From requirements for advertising, screening tenants, accepting and denying applications and using current contracts, lease agreements and providing the necessary disclosures is very important. Regulations can vary by city, county and state - and is constantly changing!

Advertising, answering calls, and showing the unit can take a considerable amount of time.  Tenants call and request showings for all different times of the day, night and weekend.  If you question whether you have the skills or the time to respond to prospective tenants promptly, you may want to consider hiring an experienced property manager. 

These are critical components of the rental application process.  If you're not certified to perform these screenings, you increase the risk of tenants "hiding" a history of late payments, evictions, criminal records, recent loss of employment and more. So assuming you do obtain this information (good job!), you may also need to deny an applicant tenancy based on their information.  In this case, proper adverse action notice is required - including if you require an additional deposit, a qualified guarantor, last month’s rent, or increased monthly rent.

If you are close, you may be able to make the regular visits required for maintenance, inspections, collections, etc. Otherwise, the further you live - the higher your travel time and expenses will be, and the more temptation there is to not keep a close eye on things, and that can be a recipe for disaster. Plus if you live out of state, be sure to consult with your local insurance company if they require you to have a designated professional in order for your property to be insured. 

Maybe you live close enough to your rental - so now, are you willing to be on call 24x7?  Its important to answer this question honestly, because when an emergency happens at your property you can't ignore it.  If you are at work - are you able to take phone calls, check emails or call around to find a contractor in the middle of your day?  Your special event, important meeting, vacation, or personal schedule doesn't relieve you of your obligation to your tenants. These emergencies don’t happen all the time, but when they do, you have to be willing to handle them immediately.

Here comes the dreaded phone call!  Water heater is leaking. Tenants don't know how to turn off the water. So now water is everywhere and the unit next door is complaining they also have water inside their home now.  UGH!  Unfortunately, this is not an uncommon scenario.  Tenants often are inexperienced when it comes to home maintenance and that responsibility then ends up with the owner.  If you can't do it yourself, do you know who to call?  Finding reliable handymen and contractors can take a while and in the mean time you may unknowingly hire people that are unethical, uninsured, do poor quality work, over charge etc. Maintenance and repairs are a significant component of being an investor and you might want to consider hiring a property manager to help oversee these projects.

This is a tough one. Managing rental properties can become quickly overwhelming, even if it's just one bad situation or event - it can feel like there is always something going on that requires time and attention.  Ask yourself how you would react in the unfortunate event that tenants:

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• Try to sneak extra people or animals into the home

• Trash the property and are still under a lease

• Continually violate HOA rules and accrue fees

• Conduct illegal business in the dwelling

• Need to vacate due to a major repair like flood or fire?

While hiring a property manager doesn't eliminate these problems, they will be the front lines, providing solutions and resources to assist you while you navigate sticky situations like these.

Many people dislike feeling like the bad guy and try to be understanding by making exceptions for late payments or damages to the home, and tend not to increase rent even with rising taxes, insurance or HOA dues.  But what inevitably happens is, your tenant continues to stay in the home and years go by and you know you're way under the rental market...but you become afraid to raise the rent or enforce terms of the Lease Agreement because you're worried they'll move out and you think you'll never find another tenant.  Sound familiar?  Well, this doesn't have to be the case. Enforcing the details of a legal lease agreement is not always an easy job to do and may need a professional to navigate between owners and tenants.

As your portfolio grows, so do the management challenges and it becomes easier for things to fall through the cracks. Investors with large portfolios (really anything more than one rental - LOL!) can stand to reap significant benefits by leveraging the efficiencies a property manager can provide. Size can also constrain investors' ability to consider purchasing new properties if they're already maxed out managing their current holdings.

Ultimately, your decision to hire or not hire a property manager should hinge on whether or not it is a good fit for your family, lifestyle and financial goals. As an investor, you will have to assess the opportunity cost of both options based on your unique circumstances.  Most homeowners won't hire a property manager because they think it will save them money - but after a while, come to realize the incredible benefits the small costs provides.  Let us show you how hiring a property manager can save you money and help you receive your greatest return on investment in the long run.  Contact Northwest Property Pros today for a free home visit and quote!