Investors: Is It Time to Outsource
Renters Warehouse Blog
It’s no secret, investing can be a full-time job. Between seeking out new investment opportunities, managing your current investments, and trying to keep on top of everything, it can be a lot for one person to manage. This is especially true if you’re trying to oversee multiple properties or ones that are located out of state. Many landlords start out doing everything themselves, and things go okay for a while, but eventually, it all becomes a bit too much to handle. At this point, most landlords are faced with a decision: keep going the way things are going, step back from investing in rentals, or start outsourcing.
One strategy that many landlords turn to is outsourcing. Enlisting the help of a property manager means that you’ll be able to step back from the day-to-day tasks that are involved with your rental. While it can be daunting knowing where to start, the truth is that once you get the ball rolling with outsourcing, you’ll gain back so much freedom that you’ll be able to keep that momentum going. It’s something that gets much, much easier with time.
You don’t have to do it all alone! If you are considering outsourcing, then here are some areas you’ll want to consider offloading to help ease your stress and allow you to focus on your big-picture goals.
Take a look at: 10 Signs You Should Outsource Your Property Management
Why Outsource Your Rental Management?
There are a number of benefits that come along with outsourcing the work of rental management. From saving you time and in some cases, even money, to helping to keep you updated on landlord-tenant legislation, here’s a look at some of the benefits now.
- To Free Up Your Time
First and foremost, outsourcing can help free up some of your time and allow you to focus on other pressing, more high-level tasks. For many landlords, this means that they’ll have more time to spend on other aspects of investing, such as finding new investment opportunities. When you’re busy with the day-to-day tasks of managing tenants, you don’t have time to find new deals. Outsourcing frees you up to find them.
- To Help You Generate Passive Income
Passive income is the goal for many investors. Generating passive income through rental properties is possible, but you’ll need to be outsourcing the work in order for that income to be truly passive.
- To Minimize Vacancies and Reduce Tenant Turnover Rates
As any investor knows, vacancies equal lost profit. Outsourcing to a good property manager can help to reduce your tenant turnover and encourage your tenants to stick around longer.
- To Keep Up With Maintenance and Repairs
Deferring maintenance and repairs can lead to bigger problems down the road. But many landlords end up having to put off maintenance, because they simply don’t have time to do it themselves. By outsourcing to a property manager, you’ll be able to ensure that your rental’s maintenance and repairs get handled on time, every time, keeping your rental in good condition and your tenants happier as well.
- To Keep Current With Laws
Another important part of outsourcing is keeping current with landlord-tenant laws, which vary a great deal by state. Enlisting the help of an experienced property manager, who’s local to the state where you’re investing, can help to keep you on the right side of the law. If you go through a local property manager, they should be familiar with many of the laws in your area and will be able to advise you on what you can do to maintain compliance too.
- To Help You Increase Your Returns
Often, a good property manager can help you to increase your returns as well. By reducing tenant turnover and vacancy rates, collecting rent on time, and screening to ensure that only qualified applicants gain access to your rental, a reputable property manager can often help your rentals to be managed more profitably as well. Learn more about increasing your returns on your rental property.
Signs That It’s Time to Outsource Your Property Management
How can you tell if it’s time to outsource your rental management? Here are a few signs:
- You Have High Tenant Turnover Rates or Vacancy Rates
If you’ve noticed an increase in your tenant turnover rates, or are experiencing high vacancy rates, then it may be time to enlist a property manager to help. A good property manager will be able to help lower your vacancy rates. Since they’ll know where to advertise and how to promote your property, they’ll be able to bring prospective tenants in faster. And since they’ll be able to keep your existing tenants happy by paying attention to small yet important details and maintaining professionalism, they’ll encourage your existing tenants to stay put for longer as well.
- The Rent Is Often Late
Is the rent often late? Then there’s a good chance you could benefit from a property manager. A property manager will be able to help set up monthly recurring payments so that your tenants will be able to pay the rent into your account automatically each month. They’ll also be able to enforce late fees, something that can help to discourage repeat late payments from happening in the future.
- Your Rental Property Is Out of Town
If your rental is out of town or a fair distance from your home, then it might make sense to start outsourcing. A property manager can be your “boots on the ground” in any given location, meaning you won’t need to travel extensively to keep an eye on things.
- You Seem to Have Problems With Tenants
Have you found that you’re always running into issues with tenants? If so, then you may want to think about outsourcing. A property manager should be able to help mitigate any problems that arise with your tenants, acting as a go between for you and them and helping to enforce the lease. If it becomes necessary, they can proceed with the eviction process as well.
- You’re Short on Time
Short on time? If you’ve found that you just don’t have the time to manage your property, then it’s almost certainly time to outsource.
Different Areas That Landlords Can Outsource
In addition to property management, there are other tasks that you can outsource as well. Here’s a look at a few:
- General Tasks
Most rental properties require regular maintenance and repairs to keep them in good shape. This is especially true for older properties that need more upkeep. Having a general contractor that you can outsource tasks to can help to make life easier and allows you to ensure that those important, yet often overlooked tasks get done.
This one goes without saying, but you’ll also want to have few experts on speed dial as well. A couple of good electricians, an HVAC expert, and plumbers are all important folks to have on hand should problems arise at your rental. Usually, these tasks are things that you won’t want to perform yourself.
- Legal Advice
When it comes to investments, staying in compliance with the law is important. Landlords should have a working knowledge of landlord-tenant laws, including federal law, state law, as well as any city ordinances. Hiring a local attorney who’s familiar with state laws can help you to ensure that your leases, policies, and procedures are in compliance with the law.
- Professional Cleaning
Whenever a tenant moves out or before a new tenant moves in, it’s important to give your property a deep clean. Sure, you can clean the property yourself, but by outsourcing to a reputable cleaning company, you’ll be able to ensure that everything is done to a very high standard. A property that is cleaned thoroughly when a tenant moves in will help to set a precedent for them. If the place is clean when they move in, they’ll be more likely to keep it clean as well.
Bookkeeping and accounting are important when you have a rental. And keeping your books organized can prove to be a lifesaver when it comes to taxes. But if you are like most other investors, accounting is often put off until the last minute. Outsourcing your day-to-day financials to a bookkeeper and your taxes to an accountant might not only be a timesaver, but a lifesaver as well. Learn about Tax Law for Landlords 2022.
- Emails and Inquiries
Another great idea is outsourcing some of your admin work to a virtual assistant (VA). A VA can help you sort your emails and respond to inquiries. They can even help you to scout out potential properties or inquire about seeing available properties for you. They can make appointments for you, do preliminary market research, and more.
- Rent Collection
Collecting rent on time is important. Often, however, collecting rent can be overlooked, by both landlords and tenants. By going through a property manager, or having your tenants set up recurring payments with the bank, you’ll be able to start generating consistent income on time, every time.
- Portfolio Management
Portfolio management is another area that you can outsource. If you have multiple properties, this becomes especially important. While property management focuses on overseeing the day-to-day tasks of owning a rental, portfolio management focuses on overseeing your entire portfolio of rental properties. Portfolio managers oversee, monitor, and suggest strategies that’ll help you to improve your returns.
Looking to streamline your day? Take a look at: Time Management Techniques for Landlords.
How can you tell if it’s time to outsource a task? You’ll know! If you’re spending all of your free time on rental-related activities, then chances are, a great deal of these tasks can be outsourced. Equally important to outsourcing though, is finding a reputable professional to outsource to. By finding professionals who are experienced and reputable, you’ll be able to start outsourcing with confidence, knowing that your tasks will be done to a standard that’s at least as high as what you would do yourself. Don’t settle for anything less. A property manager who cuts corners or doesn’t act professionally can end up doing more harm than good. Fortunately, you can easily check online to see what people are saying about potential property managers, allowing you to find the best professional for the job.
For investors, it can be hard to step back and let others take the wheel. But if you find someone that you can work toward trusting, you’ll be able to start taking steps back. This, in turn, will allow you to invest your time in those high-level tasks that’ll allow you to grow your rental portfolio and maximize your returns, far beyond what you’d be able to do if you were working on your own.
Looking for help with your rental property? See: How Can I Increase My Real Estate Portfolio. Discover tips for scaling your rental property empire, and start generating passive income that’ll help you to generate long-term wealth growth and find financial freedom.
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