Affording A Property Management Service
A Definite Advantage To Owning Apt Properties
Whether you choose to keep your property management service in-house or hire an outside professional, moving into apartment complex investing will afford you the ability to let someone else oversee the day-to-day operations of your real estate investments.
Apartment buildings are, for the most part, bought and sold based on the cash flow that they generate. In the valuation of these properties, an allowance for management expense is built right in. This is not the case, of course, with single family homes.
Now, if you are like a lot of people who are interested in becoming a real estate investor, you are wary of becoming a landlord. It may be that you fear the 2 a.m. phone calls about the burst pipe or just dealing with the proverbial tenant from hell that I think we all have a picture of in our minds. Before I purchased my first commercial property over 12 years ago I believe I was similarly apprehensive about the tenant management side of the business. In hindsight, however, I realize that hiring an excellent management service to work for me and manage my real estate investments has not only enabled me to grow my real estate business much faster over the years, it has also made that business much more profitable.
Another advantage of being able to hire a management service to run your properties is that you are no longer restricted to where you can invest geographically. In fact many of the commercial properties that I own, and have owned over the years have been located in cities other than where I live. Some of my properties have been up to 14 hours driving distance form my home. It is unlikely I would have been able to purchase and manage a single family home on my own from that distance. With larger apartment properties it becomes possible.
A final thought on hiring a property management service (or hiring an employee) to manage your properties.
This does not mean you get to completely ignore the property management side of your business.
You are still the one who is in charge. It is alright to delegate jobs but make sure you stay involved and continually monitor your properties. Property management services are not a license to ignore your business. If you ignore the property management of your buildings you will soon become one of the distressed property owners that you are now looking to buy from.
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