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Learn the Ins and Outs of Property Management for Turnkey Investing

Posted by Equity On Repeat on October 2, 2023

Everyone wants to get into real estate investing, but not everyone realizes how much work is actually involved. When you buy a turnkey rental property, you’re not just purchasing an asset – you’re becoming a landlord. And unless you want to deal with middle-of-the-night phone calls about clogged toilets and non-paying tenants, you need a professional property manager to handle the day-to-day management.

Why Property Management Is Essential for Turnkey Investors

Property management is what allows you to be a truly hands-off investor. A good property manager acts as the point person for your tenants and oversees all aspects of running your rental business. They market your properties, screen applicants, collect rent, handle maintenance and repairs, enforce leases, and keep an eye on your investment from afar. While it may seem like an added expense, property management is essential for any successful turnkey investing strategy. Let the experts handle the work so you can sit back, relax, and watch your investment returns roll in.

Using a property manager for turnkey real estate has significant benefits. It allows you to be hands-off while still earning income from your investment. You avoid having to deal with middle-of-the-night emergency calls, costly evictions, or chasing down late rent payments. A property management company has the experience and expertise to maximize your investment’s income potential.

Of course, as with any investment, there are risks to be aware of. Make sure you understand all fees and costs before purchasing a turnkey property. Review the property manager’s experience, credentials, online reviews and references from other clients. Understand their process for placing quality, long-term tenants. Turnkey real estate, when done right, can be an excellent source of passive income without the headaches of being a landlord. But as an investor, you still need to go in with your eyes open.

Turnkey real estate allows everyday investors to build wealth through rental property. By utilizing professional property management, you can earn income from your investment without the responsibilities of being a landlord. With some due diligence, turnkey rentals can provide passive income for years to come.

What Specific Services Do Property Management Companies Provide?

As a turnkey investor, finding a reliable property management company is essential to your success. They handle the day-to-day operations of your rental property so you can sit back and collect the checks. Property managers take care of things like:

  • Finding, screening and selecting tenants: The property manager will market your rental to attract qualified tenants. They will handle listing the property, showing it to interested tenants, screening applicants by checking references and credit scores, and selecting a responsible tenant.
  • Handling maintenance and repairs: Property managers oversee any maintenance, repairs, or renovations needed to keep the property in good shape. They will handle requests from tenants, inspect the property regularly, and hire contractors to perform work like plumbing repairs, HVAC tune-ups, or yard maintenance. The fees for any major work will need approval from the property owner first.
  • Collecting rent payments: Property managers collect rent payments from tenants each month. They ensure payments are made on time and in full. If a tenant falls behind on rent, the property manager will contact them to create a payment plan to collect the total amount due. As a last resort, they can initiate the eviction process.
  • Renewing or terminating leases: They’ll handle the paperwork to renew good tenants or issue notices to vacate for non-paying renters.
  • Compliance: There are many laws around renting and managing properties that property managers must follow. They keep on top of legislation regarding security deposits, rent increases, evictions, and more. They also make sure properties meet safety standards and building codes. Property managers help ensure investors avoid potential legal issues or penalties due to non-compliance.
  • Accounting: Property management companies keep detailed financial records for each property. They track income and expenses to provide monthly or quarterly accounting reports to property owners. These reports summarize rent collected, maintenance and operating costs paid out, and the net profit generated from the investment property.

As an investor, especially one that lives far from the property, relying on professionals to manage the details is key. It allows you to own rental real estate without the hassle and headache of being an active landlord.

Using a reputable property management company, preferably one with experience managing single-family homes or small multifamily properties, gives you the freedom to sit back and enjoy the returns from your investment. Turnkey real estate can be very hands-off, if you find the right team to handle the management. Focus on choosing a company known for providing great service to both property owners and tenants. With professionals overseeing all aspects of your rental, you’ll have the flexibility to build your portfolio and achieve your investment goals.

In summary, property managers handle the essential day-to-day administration of rental properties so investors can earn passive income from turnkey real estate. Their services are well worth the fees for the convenience and peace of mind they provide.

Tips for Optimizing Your Turnkey Investment With Property Management

When evaluating potential property managers, look for the following qualifications:

Seek out a company that has been in business for at least 5-10 years and has experience managing similar properties. Ask about their specific experience with your type of property and tenant base.

Ask the property manager for references from current clients. Call a few references and ask about the company’s responsiveness, their availability, and how quickly they resolve any issues. Good reviews from existing clients are a must.

Property management fees typically range from 8-12% of monthly rent. Make sure you understand exactly what services are included for the fees. Some may charge extra for duties like placing ads or resolving maintenance issues. Compare fees between a few companies to determine a fair price.

Look for a company that responds quickly to calls and emails, especially for emergencies. They should have an after-hours contact in case of emergency repairs or tenant issues. Ask about their specific procedures for addressing urgent matters.

For vacant units, inquire about their marketing and advertising procedures. They should have an effective plan in place to minimize vacancies and keep your property occupied with paying tenants. Discuss their specific strategies for marketing your property.

By thoroughly vetting potential property managers, you’ll find one equipped to handle the essential duties. With the right management in place, your turnkey investment can truly be “turnkey” and provide cash flow with minimal hassle. Focus on growing your portfolio, and let the property manager handle the rest.

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