Real Estate Investing Blog

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When your path to generating wealth by investing in real estate involves property management, you’ll find that there are a variety of things that you’ll want to consider along the way. One option that you should look into strongly is determining your property management niche.

If you take a look at some property management companies that are out there, you’ll get a sense of what I’m talking about. There are some property management companies who have set out to develop a niche that can be described as luxury living on a budget. These companies focus on providing amenities and a quality of service to those who are looking for certain things in a home but who may not have the money (or may not want to spend the money) on high end housing.

Other property management companies look into real estate trends and see how they can adapt them to suit the buildings that they own and run. A niche in this sense would be green living; as more and more people are looking into reducing the impact that they have on the environment, it’s a good idea for those who manage housing to look at ways in which they can go green and attract a specialized clientele.

When you are able to carve out a niche within the property management side of real estate investing, you’ll find that you are able to develop a reputation for your business. In almost every case, having that reputation enables you to increase your marketing efforts and to take hold of a larger portion of your local real estate market.

One option for those who are looking to generate wealth through real estate investing includes property management. Rather than simply buying properties and selling them at a profit, property management creates the opportunity to own and rent out apartments, condos and even single family homes.

For many who are looking into real estate investment, the question then becomes “Is this a good time to become a landlord and enter into the property management area?”

There’s some suggestion that it is:

(source)So while the number of renters is growing, the number of rental properties will be shrinking whenever the housing market recovers. All these sellers who are forced to do rental agreements will certainly be putting their houses on the market at the earliest opportunity. This could mean the displacement of countless tenants. Maybe it’s a good time to get into the apartment rental or lease-purchase business.

The reality is that there are a lot of good reasons to look into property management as an option; those same people who are facing foreclosure are going to need to find a place to live and are unlikely to find another mortgage in the near future. However, if you’re thinking about becoming a landlord, it’s important to look at all of your options and to think about whether or not you’re interested in everything that goes along with it.

Most mortgages today do have a “due on sale” clause .

The term “due-on-sale” means a contract provision which authorizes a lender, at its option, to declare due and payable sums secured by the lender’s security instrument, if all or any part of the property, or an interest therein, securing the real property loan is sold or transferred without the lender’s prior written consent;

Legal jargon that says plain and simple - a right to call the entire balance of the loan due.

But do they??

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My answer to that question is “ABSOLUTELY.”  The things I always hear on the negative issues of landlording are calls in the middle of the night and tenants.  When you have good properties in good neighborhoods, you find good tenants who pay on time and take care of your property and don’t call you.  Sure, there may be the occasional ( the hot water tank is leaking or the air conditioner stopped working)  So what!!  You are there to fix your OWN property so fix it.  Sure, it may take an hour of your time ( or not).  You just call the repair person.  They come to fix it and send you a bill.  And it’s over.  Is it really all that big of a deal??  I have never in my 20 years of landlording got a call in the middle of the night. I have a voice mail and I turn my cell phone off at night.  99.9% of the repairs are called in on the voice mail or called to my cell during the day  and not an emergency and can be handled within 24 hours.  
The other issue is tenants that do not pay their rent on time or don’t pay the rent at all.  Like I said before, when you have the right properties, you get the right tenants and don’t have that issue.  Sure , I have tenants that may pay late.  They understand our policy and they lose their rent discount and pays the additional daily rent until we receive their rent payment.  As long as they communicate this to me and pay as agreed, is it really so bad you get MORE MONEY for waiting another week on the rent!  If a tenant doesn’t pay the rent, you don’t wait a month or two before taking action.  This is a business.  If you don’t get the rent, take the action and start the dispossessory. 
The tenants are “working” for you so you don’t have to work for your money.  The rental income is “passive income”  so the tax benefits are better as well as deducting the expenses and the property.  Great tax benefits for owning rental properties!  I love landlording!! 
 

Peggy Parks