Those aspiring to build a profitable portfolio of rental properties and establish their own real estate investing empire must budget for professional property management.
It is completely feasible to manage your own properties at the beginning and even rehab, even if you have never unclogged a toilet before. It may not even be a bad idea at first; at least to learn the ropes, understand the challenges and earn more respect from employees.
However, that shouldn’t be your long term real estate investing plan…
You’ve probably already heard the arguments the being a landlord is just another job and perhaps does not offering true passive income in its purest sense. And if you want your rentals to produce a level of income you can retire on and don’t want to be chained to them 24/7 you’ll definitely want some help.
Recruiting some in house assistance and piecing together a team can be one option and give the feeling of having more control. Yet, most still build all of this reliant on their daily involvement.
Why you really must at least budget for professional, third party property management is for those emergencies, for the unexpected.
You could wake up one morning and not feel like getting your hands dirty anymore or reporting to the office – then what?
If you haven’t budgeted for the spread, it may not be feasible to incorporate and still maintain positive cash flow. That’s a big problem.
However, even more pressing is what if you all of a sudden simply can’t manage your properties or direct your team? Maybe you have to take off to take care of family; get injured yourself, become disabled or worse?
It may not be the optimum time to sell out and your family members may not want to, or be able to skillfully manage your real estate investing portfolio as you would; destroying the legacy you so desperately wanted to leave behind.
So even if you want to be hands on now, budget for it, screen property management firms, and the extra income you see right now will be all icing on the cake in the meantime.