November 6, 2018
Property rental is one of the most popular forms of active real estate investing. It requires much hands-on from the manager, but it is a long-term investment. You can make any type of investment property a rental property, whether commercial, residential, or industrial. A property owner can earn a monthly cash flow from the tenants paying their rental fees. This can easily become a reliable, steady income stream for real estate investors. Of course, it also means a lot of responsibilities on the shoulders of the owner for everything to run smoothly, or for the owner to delegate.
To successfully rent property, you must first find some tenants. Depending on your resources and the type of property you are renting, it may be simple or difficult to find tenants. It is necessary to run a background check on any prospective tenant and to provide them with a legally sound contract agreement. Finding a good fit for a tenant is important since you will be losing money every month you own the property without a tenant.
Once you have a tenant in your property, there are many duties that you will need to perform. You will be responsible for all the bookkeeping, maintenance, rent collection, repairs, evictions, and any other legal matters with the property. Property management can be a full or part-time job for you, depending on the number of properties you own.
If you prefer, you can hire a property management company to manage your properties for a fixed or percentage of your income. That way, it takes some of the pressure off your shoulders as the investor and makes the property more of a passive investment. Of course, that also means you are giving up some of the control of your property and losing some of your monthly income, so it’s something to consider.