Rental Property Ownership is a Business NOT a Hobby.

rental property ownership
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Remember what it’s like buying that first investment property? The excitement, the pride followed quickly by the feelings of worry and doubt? As you progress in your journey of rental housing ownership, time passes and those worries seem to slip away. You get to the point where you think to yourself “I’ve got this.” Rental property ownership seems like a fun hobby, not actual work, until the surprise comes.

For one couple, Dan and Sarah, that surprise was one they never imagined. They bought a small group of duplexes and threw themselves into managing their rental property portfolio with enthusiasm. The learning curve was steep, but overall, they felt comfortable. Of course, there was that one tenant, “the one” that never paid rent on time or paid a partial rent. This resident and her adult sons thankfully moved out at the end of their lease and it was time to turn the unit.

Rental Property Ownership Tip: Self-Managing Is Rarely Safe or Advantageous

Happy that they no longer had to deal with this tenant, Dan and Sarah arrived at the duplex ready to tackle property turn list to ready it to rent. They opened the front door to an empty, clean apartment. They unloaded their supplies and Dan left to get more paint. Sarah inspected each room. As she opened the back bedroom door, she noticed a couple sleeping bags and a bag of clothing. The she saw two faces staring at her from the back corner. Much to her surprise, the grown sons of the resident who recently vacated surprised her. They were illegally residing in the property.

The ensuing conversation scared Sarah. She left the apartment and waited for Dan outside. By the time he arrived, the sons had cleaned up their mess and were packing up their car. While this incident worked out okay, they realized that it could have been much worse. They could have been dealing with an elongated fight over squatters rights, eviction, or worse Sarah’s life could have been in danger.

As the property owners continued through their unit turn, they changed locks, painted and cleaned every inch of their investment property. In the back of their minds, however, the thought remained. “What if?”

Rental Property Ownership Tip: Investment Properties are a Business

While real estate investing is the foundation of stable and secure wealth, it’s often treated as a hobby or a second job. And while that is okay for a while, it doesn’t work for the longevity of growing your property investment portfolio.

In an easy month, with a little lucky, it may work. It may just be a few hours spent on accounting. But it’s the “bad” months that can bring many investment property owners to the edge of their sanity or can strain their finances. At best, growing your investment property portfolio, as an owner operator, one should take caution. Investment property ownership can consume every second of your free time. In a terrible month, it could get scary and threaten your own safety much like Dan and Sarah.

The big question you must ask yourself is: “Is my investment property costing my more time and effort than benefit that it is bringing?  Is your time worth more than that? (hint: the answer to this is almost always “YES!”) What would improve your quality of life as a landlord? How can you make your investment properties work FOR YOU instead of the other way around?

Rental Property Ownership Tip: Hire a Property Manager

As property managers for many types of investors from single property owners to large capital property investors, the one question that resonates in our minds continues to be: “Why do so many investment property owners spend their time managing their own properties”?

The answer is never simple or clean cut. Sometimes it’s a lack of trust. Many property owners just want to understand fully what is going on with their properties. Property owners want transparency and communication from their property management company. At Auben, we understand that it’s your money, your property, your investment and your financial future and you SHOULD be in control of it. Which is why we believe that building trust between property owners and your property management company is so important. Regular communication is a must.

Poor management of investments and lack of communication often leads to owners feeling frustrated or doing the work themselves. Breaking up with your current property manager or stepping outside your self-managed box, is never easy, but it is, more often than not, what is best for both you, your properties, your investment goals and even your sanity!

Rental Property Ownership Tip: Communicate Regularly with Your Property Manager

Some investors don’t want to spend the money on a property management company. This is treating your investment as a hobby. Ask yourself, will you be consistent in your dealings with tenants? Will you field 3 AM maintenance calls? Do you want to collect late rents? Can you keep up with all the legal obligations and responsibilities of landlords? How will you deal with an eviction? What if you need to sell your investment property and it’s occupied? What is your time worth to you? It’s time. You owe it to yourself, and your family to find a property management company that works for you.

As for Dan and Sarah, they found a property management company that covered all the bases, transparency, communication, consistency. Passive investment property ownership is easy. After they found a good property management company, investing in real estate property was an enjoyable and fluid process. Their property management company gave them their life back. Kept their family safe and secure, and secured their investment growth plan.

Want to get your life, as a property owner, back?

Ready to release the headaches and burdens of investment property ownership and enjoy your retirement?

Bring your worries and investment property portfolio to Auben! Let our in house analyst evaluate your rental property portfolio and outline a property investment strategy that works for you. Then… sit back and relax. Leave the landlord headaches to us! All you do is collect the profits!