Why you should stop managing your own real estate investment properties
Managed properties manage everything for you, so you don’t have to
Everyone is excited when they first start real estate investing. The first investment often leads to another. Unfortunately, at some point (for some people it’s the fourth purchase, sometimes it’s the 20th), it’s common for real estate investors to get tired. It’s not always immediately clear why. However, it’s often because investors are managing their own investment properties. Once you own a certain amount of properties, you could be on your third maintenance call of the day before 9:00 AM.
Thankfully, there’s a solution. Those who are real estate investing can instead choose to purchase a managed property such as a managed property. A managed property is a condominium complex where individual owners own each unit. However, there is a centralized rental and management division. You own the unit, but they take care of the rental and property management for you.
There are many reasons why you should stop managing your own properties. Managing your own properties can be exhausting. It takes a significant amount of time and effort to manage multiple properties; not to mention the headache involved in tracking expenses and other paperwork. Not only that, but managed properties can also convert your investments from active income to passive income- which is the best way to accumulate wealth. Read on to learn more.
Managing your own properties can be exhausting
The list of activities to manage with your own property is never-ending. Not only are you responsible for maintenance, but you must also collect rent and constantly be on call in case of emergency. You are responsible for advertising vacant property as well as showing potential tenants through. You also must keep track of your own taxes and complete all your own paperwork. It can sometimes seem like tenants are out to find new and creative ways to test your patience. And when you’re responsible for multiple properties? Well, that multiplies the demand on your time.
By investing in a managed property, you’ve avoided these problems. The management company handles the maintenance and paperwork for you. They will also collect the rent and deduct expenses before dispersing the remaining amount to the unit owners. The management company will also advertise your vacant properties to get them filled. They’ll even show potential tenants for you- no worrying about that, either!
Managed properties turn active income into passive income
The best way to amass wealth is by using passive income. When you start real estate investing, you are investing your time as much as your capital. By managing your own property, you are essentially limiting your ability to invest time elsewhere. And there is, of course, the old adage – “time is money.”
For example, perhaps you can handle 5-10 properties on your own before it simply isn’t feasible to do anymore. But if you aren’t managing the property at all, your time investment capacity is suddenly limitless. Investing in managed properties requires absolutely no additional time on your part.
How much money can you make with a single hour of your time? $100? Less? More? Chances are, it’s a significant amount more than your share of a complex’s management fee. Condo management fees are usually around 10% of the building’s monthly income. The remaining 90% of the income is then divided up by the property owners.
Even if you could take home more by managing it yourself, remember- your time is an investment, too. An investment that doesn’t require time is, logically speaking, half the price of one that does.
There are many reasons why you should stop managing your own property. Managing your own properties is exhausting. It takes a significant amount of time and effort to manage even one property; not to mention the headache involved in managing your own expenses and paperwork. Managed properties can solve these problems and can also convert your investments from active income to passive income.