Professional Property Managers make Out-of-State Properties Profitable
Becoming a rental property owner can be a good way to increase your financial security. For those rental property owners who choose to invest in out-of-state properties however, using a professional property management company is key. Managing investment properties from across state lines is a difficult process. Here are two good reasons to let a professional manager handle it.
It’s Not Scalable
In business, scalability “refers to a company’s ability to increase its production profitability.” All business owners need to have a business model that is scalable. They must have a way for the business to grow when necessary. Managing out-of-state properties is not a scalable business though. Managing two or three rental properties from out-of-state is difficult but possible, but what happens when that number increases to 20 or 30? No investment property owner would be able to successfully manage a business like that.
If you want your investment property business to be scalable (and you should want that) then you will need to hire a reliable property management company to manage your out-of-state properties.
It’s a Full-Time Job
Managing your own rental properties is a job. It takes a lot of time, and ultimately, it will take time that you would otherwise be able to use to build your business and generate more revenue.
Managing rental properties requires a lot of time-wasting tasks that someone else could handle for a small fee. Most property management companies take between 6% and 10% of gross rental income as their monthly fee. That means on a $1000 rental property, you could pay someone roughly $100 a month to collect rent, manage the tenants, maintain the relationship with the tenants, handle maintenance requests, handle evictions, etc. While they are busy doing all of that, you can focus on growing your business.
There is truth to the philosophy “work on your business, not in your business.” Out-of-state property owners need managers in place in order to free up time to focus on their business growth.
When a good rental property investment opportunity comes up across state lines, don’t hesitate to take advantage of it. But, remember your goals. Keep your investment property business scalable and use your time wisely by using a property management company.