Owning rental property is one of those life-dreams that can turn out to be completely different from what you had imagined it would be. Almost everyone, particularly investors who are just starting, aspires to own rental properties. But what several people don’t know is that there is another side to being a property investor.
Owning rental property is a lot of work. However, most investors are unprepared for the exertion required to make an investment property successful. That is because owning rental properties is not viewed as owning a business. Newbie investors think all they have to do is buy a property and then sit back to watch the money flow.
Why is it hard to manage a rental property?
Although investing in rental estate involves buying some property, it is not the same as buying the house you will reside in. There are aspects to managing a rental property that makes the experience completely different from owning your own home. Even though both are pieces of real estate, one is a lot more work.
As a property investor, you have to deal with the following:
- Landlord-tenant laws: In your primary residence, the people who live in the home are often your relatives, and there is no need for the government to police the relationship. That is not the case with tenants in a rental property; because there are several regulations.
- Marketing your apartment property: You must outsell other landlords to find tenants for the property. But while you don’t want the home to be vacant, you also don’t want to accept just about any tenant. You must vet prospective tenants to ensure they will not be a problem.
- Making sure tenants keep up with rent: Getting tenants to pay the rent will be a constant concern. You want to avoid late payments, partial payments, or failure to pay at all. You cannot be overly nice because people will take advantage of you.
- Enforcing the lease terms: In addition to making sure tenants pay the rent, you must make sure they respect the lease agreement. You have to be quick to spot violations and deal with them. Sometimes, you have to evict a tenant.
- Protect the physical structures of the home: Many tenants will not use the systems and contents of the home in a responsible manner. Tenants will destroy your investment if you do not have processes to protect the house.
- Manage your costs: Keeping your costs low will be a constant battle. You must make decisions every day on what expenses are critical versus those you can delay without hurting the performance of the rental or your profits.
- Staying up to date with payments: You must meet your obligations to pay the mortgage, interest, insurance, taxes, wages, and professional fees. You must also make sure your property is up-to-code at all times.
These are the realities of being an investment property owner.
But what if you have seen and done all the above and finally come to a place where you can’t handle it anymore? If you are at a point where you are starting to feel like you can’t keep up with the demands of your rental property, what should you do?
What to do when you cannot keep up with your rental
A surprising number of property investors get to this point every year. Sometimes it is because they have reached an age where the strain of looking after the asset is too much for them. Others have other interests they would like to pursue that the rental property may hinder. Some discovered that being a landlord is not just for them.
Whatever the reasons, if you are in a place where you no longer want to deal with the hassles of managing a rental property, what should you do? There are two options open to you in this situation: you can outsource the property to a manager, or you can sell it.
1. Outsource to a property manager
Hiring a property manager is a compromise solution that lets you reserve the best aspects of being a property investor for yourself while transferring the hustle and grind to someone else. The downside of doing this is you will have to share some of the profits with the property manager. Also, you are not entirely free from making decisions about the property.
2. Sell it
Selling a property is another solution if you want to sever your ties to the property. Selling it is a beneficial option because you avoid the stress of listing the home, waiting for buyers, and enduring lengthy negotiations. Look around to find out a realtor or a buyer who will make you a fair cash offer.
