Rental Properties – A Wise Addition to an Investment Portfolio When Coupled with a Knowledgeable Property Management Team
As advised in the article below, rental properties are one of the smartest additions to an investment portfolio now. Also noted is the importance of knowledgeable and experienced property management and how this can make the difference between having a profitable investment or not. Playa Realty and Management is available to help you succeed with your real estate investments.
According to a recent Morgan Stanley Housing Market Insights report, the U.S. is turning from a homeownership society into a rentership society. And as the number of renters increases, so too, does the number of real estate investors who are purchasing rental properties. However, not all real estate investors will see positive returns in their real estate investments.
Some investors may say their real estate investments failed because their property’s location was bad or their tenants didn’t pay their rent on time. But, according to James McClelland, CEO and president of MACK Companies, the No. 1 reason why people fail at real estate investing is property management.
“There is a misconception that people fail in their real estate investments because they didn’t buy the right property or it wasn’t in the right location,” said McClelland. “Of course, those factors come into play. However, when it comes right down to it, the inability to analyze one’s property and manage it correctly is what precipitates failure.
“Brick and mortar never make mistakes,” continued McClelland. “What did that home sitting on its lot ever do wrong? Nothing. The property failed because of the person who was managing it, or better yet, mismanaging it.”
“For many considering real estate investments, property management is an afterthought. Or, they think ‘hey, I’m handy, I can fix a leaky faucet’ and then assume their responsibility and interaction with a tenant will be minimal,” said McClelland. “But to be a successful real estate investor, property management has to be a priority. Without great property management you won’t have great tenants. And great tenants are the key to a successful real estate investment.”
How to Properly Screen Rental Tenants
According to McClelland, one of the first missteps people make with their real estate investments is not properly screening their tenants.
“Sooner or later, property investors realize that owning real estate without having someone else manage it for them becomes a full-time job,” McClelland said. “For us, it’s a 24/7 job 365 days a year. And that’s what good, paying tenants want – a property management firm who can solve problems quickly.”
Too often, real estate investors who decide to manage their own property live too far away from their investment to properly manage it, noted McClelland. “How can you effectively protect your investment and renter if it takes you more than an hour to get there if something goes wrong? You, or your property management firm, should be located no more than 30 minutes away from your investment property,” he said.
According to reports, there are now more than 3.5 million single-family rentals in the U.S. and that number is growing due to rental demand and foreclosures. “There’s no denying rental properties are one of smartest additions to an investment portfolio right now,” said McClelland. “But how you choose to manage those assets can make the difference between enjoying a positive monthly cash flow and not covering your mortgage.
The property managers of Playa Realty and Management are available at all times to be sure your tenants receive a quick response to any questions they may have and a short turn-around time for any repairs that are needed. Please remember that Playa’s Property Managers are fully licensed to help with all of your real estate needs whether you have properties you would like to rent or sell.