Do you own multiple residential properties? Do you already rent them out to other people or are you thinking about turning them into rental properties? As you're no doubt already aware, renting out properties that you own can be a good source of income and a way to build up your net worth. As a result, you may think that managing the property or properties yourself will make the most sense financially. But this may not actually be true. Here are some reasons why you should hire a company (such as Kasten Real Estate) to take care of your properties for you:
Tenant screening: Screening out potentially troublesome tenants can be tricky. Legally, you're not allowed to discriminate against a person because of things like age, ethnicity, religion and more. If you're investigating people on your own, you could inadvertently make it seem like you're discriminating against one of these protected legal statuses. If you tell prospective tenants that you don't rent to young college students, for example, you could be opening yourself up to potential lawsuits. But a professional property management company will know what to look for in order to estimate whether a particular tenant will cause problems or not. With the tools they have at their disposal, they will look at their credit report to see if they have a history of late payments and the company may also look to see whether they have been in recent legal trouble or have been evicted from another home. All of these are perfectly valid reasons to accept or deny a potential tenant and could take substantial time, money and energy for you to research on your own.
Repair calls: If you're the kind of person who likes to sleep through the night, you probably don't want to be woken up in the middle of the night by frantic calls from your tenants. Whether it's a burst pipe, a broken heater, or other emergency repairs, you may have trouble dealing with these issues in your own home when half awake, let alone in a house or apartment that someone else is currently living in. Instead of sleepily trying to find your emergency plumber's contact information in the middle of the night, let your professional property management company take care of these things for you. While the company will obviously notify you of any problems, you can request that they not do so during certain times of the day or on certain days of the week. This also means that you can go on vacation without worrying about to handle an emergency repair situation from several states away.
Upkeep budget: When you collect all of the rent yourself, it can be difficult not to spend all of the money that isn't going towards the mortgage payment. If an emergency arises on one of your rental properties that you're legally obligated to fix, you could then find yourself short on cash. You may set aside some money for potential repairs, only to find yourself tapping into it when your personal vehicle breaks down or you otherwise need money. But if you use a professional property management company, you can request that they withhold a portion of the rent money and put it towards a repair fund. Since you are unable to access this money, you can't spend it. As a result, it'll still be available for any repairs that any rental property of yours might need.