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With interest rates as low as they are these days, many investors are getting in on the action and buying properties to rent out. In fact, what used to be a market where renters were paying less rent than homeowners were paying in mortgages has now flipped around. Property owners that are paying a mortgage can demand rent that is at least a few hundred dollars higher, if not more, yielding a sizable “instant” return on investment.
We talked to a property manager to find out where the rental market stands today and why it makes sense to hire a management company as opposed to tackling it all on your own.
What’s Happening in the Rental Market Right Now?
The most notable difference in the rental market recently as opposed to just a few years ago is that we are finally witnessing an improvement in tenants’ ability to support rental living. With the economy slowly gaining momentum again, rent values are heading slightly up or at least remaining constant. Some markets that were exhibiting declines in rent values are now seeing rates that rival those from 2008, a much stronger rental period across the board. Keeping with the positive trend, areas that showed stable rental statistics between 2008 and present will likely experience a bit of an increase or at least remain flat.
Why Would Some Use a Property Management Company?
At a time when the economy seemingly has a long way to go before a complete recovery, many potential or existing owners of rental properties may be reluctant to spend on having their property managed. However, there are several reasons that it makes sense to hire a management company to handle all aspects of the rental business.
First, the process of screening tenants, handling all background checks, leasing units to those with approved applications and assisting with the move-in process is managed by the company. Promotion of the location, attracting viable tenants that fit the desired demographic profile plus communication and operations – are all things that fall within the parameters of a property management company.
Also, document maintenance and preparation that comes in handy when it comes times for accounting and taxes is also managed. Depending on the number of units in the property, the amount of paperwork can be staggering. With someone handling all of these details, it allows the property owner to focus on other things.
By hiring a company to handle all on-the-ground aspects of running the property, the investor is then given a lot of freedom to travel or spend time in another county, state or country while continuously yielding the benefits of rental income and rental property ownership.
If owning a rental property sounds good to you, be sure to consult with your Realtor to find the best properties available out there right now. And of course, by hiring a property management company you can enjoy flexibility and freedom while at the same time be rest assured that your property and tenants are in good hands!