Determining Your Property Management Strategy Part 1: Proximity and Portfolio Size
The challenge of rental property investment is that there is not a simple one size fits all method. But there are viable options for those who want to have a larger role in the management and for those who wish to be more inactive managers. It’s important to understand your lifestyle and what your objectives are as an investor if you want to choose the very best management strategy. The following is a list of tips to help you decide on the best approach.
Before you determine which management strategy could be the most effective fit for you as a landlord, you should do some self-examination. You need to assess how much time you are willing to devote to the property, how much practice you have with the different parts of rental property management, and your personality.
Proximity to Rental Property
How far do you reside from the rental property in question? If you are a short drive away, it may be simple to visit the property frequently to take out the trash, perform upkeep, handle tenant issues and gather rent. If you are more than an hour away, driving two hours across the city and back to take out the recycling may not be the most practical use of your time.
Your time is a precious resource. That’s why you should contemplate the cost of travelling to the property. You may be under the impression that you are saving money by doing it all yourself instead of hiring a superintendent or a property management company, but when you consider all the time you are wasting driving to the rental property, you might be losing money.
You could be utilizing your time to find different investments or discover other money making ventures instead. You should also not discard a potential investment too quickly just because it is too far away from your permanent residence, even if it is in a different province. In these cases, a hands-on property management approach will likely be unfeasible.
Ultimately, a less hands-on approach that includes hiring a local individual or company to deal with daily operations can still make the investment a reality. You must decide if you are content with handing over control.
Size of Your Rental Portfolio
How many rental units do you currently own? It is a much simpler task to manage one rental unit by yourself than it is to manage a hundred. The bigger that your portfolio of rental units becomes, the more you may want to think about bringing in an outside expert to help. It is still possible to remain in charge of certain operations while handing over control of other tasks that have become far too overwhelming.