Do You Need a Property Management Firm?
Without a doubt, owning rental property is one of the most rewarding ways to grow your money over the long term while it earns a monthly income stream. As attractive as these gains are, investment property ownership requires time commitments that vary throughout the ownership cycle.
Anyone who owns a home knows that they need maintenance and repairs periodically, along with accurate record keeping. Unless you enjoy the day-to-day attention that a home needs, you might be ahead by hiring an Orlando property management firm to take care of the details for you.
Property management companies charge fees for their services. Depending on your schedule and propensity toward property management and maintenance, paying someone else to do the work could make financial sense if you:
• Want the financial benefits of Orlando FL property ownership without the hassles.
• Don’t live close by.
• Own more than one rental property.
• Aren’t interested in property maintenance.
• Don’t have the tools to make repairs or upgrades.
• Aren’t interested in record keeping.
Investing in Orlando Real Estate
The Orlando housing market for both rental and for-sale housing is one of the strongest in the nation. Its Sunbelt location and strong economic foundation point to a solid market for rental property for the foreseeable future. According to a Zillow report, the median rental rate for 2017 stood at $1,475 a month, and local experts predict low vacancies and rising rents to continue.
Since 2005, the number of households renting versus owning their homes in Orlando has increased steadily. Over 40 percent of the homes in the Orlando area are now occupied by renters, compared to 30 percent in 2005. Between the increase in rental rates and the growth in renters, Orlando is poised to be a lucrative location for rental properties.
Distance Makes a Difference for Landlords
Some turnkey property investors use management companies to own property in distant locations. They may be holding the property for their own future use for retirement or a vacation home, or the area provides a better investment return their own town or city.
As a landlord, you’re on call 24/7 for emergencies and being in distant location makes it more difficult to assess the problem and find solutions. Having an Orlando property management firm nearby gives you someone to rely on.
When you do have to travel to inspect the property, you can use the travel expenses as a federal tax deduction. The rules allow deductions for nearly all expenses, as long as they are directly associated with the rental home.
You won’t be able to deduct expenses associated with food, lodging, or transportation for activities unrelated to the property. Before you use the travel deduction for a rental property, be sure to consult with a qualified tax expert.
Identifying the Best Rental Opportunities
It takes time, experience and knowledge to learn about a specific real estate market. While the internet is more than helpful for real estate investors, the firsthand experience you have by living in the area provides a much more solid foundation for making property and location decisions.
An Orlando property management firm will have the expertise you need to make educated choices about the most viable neighborhoods as an investor. They’ll have the market data specific to the area that’s hard to come by online or without a strong local network. Their firsthand experience will also help you confirm or question the viability of investing in any particular neighborhood.
Factors that influence the rental market by location include job growth and distribution, transportation corridors, proximity to shopping and services and the choice of schools. While you can learn these facts about Orlando FL on your own, a knowledgeable property manager can provide the insight for you much more quickly.
Time Considerations
Although rental properties are one of the few investments that provide a passive income, it’s not completely without effort. A property management company handles nearly every aspect of the owning investment homes from finding qualified tenants, routine and emergency maintenance and pre-and final inspections.
Since they’re specialists, management companies use trusted contractors for the properties under their care. They choose them based on price and performance. Finding the best contractors and handymen for your properties saves a good deal of time.
Some repairs must be done within a specified time period, like repairs to heating and cooling equipment, plumbing, or electrical emergencies. Property management companies and their contractors are familiar with the laws regarding these repairs.
Finding Well Qualified Tenants
A property management company uses subscriptions to credit and background reporting agencies, tools most property owners use to qualify new renters. They will verify the applicant’s financial ability, and may check their prior rental history. Such careful screening helps you choose suitable tenants for your property.
Professional managers understand the Fair Housing laws and apply them when interviewing and screening tenants. Their expertise in this area will help you avoid discrimination complaints.
They may also have a waiting list of interested and appropriate people who are looking for the type of property you have available. Filling vacancies as quickly as possible increases your bottom line.
When you do it yourself without a property manager, it will take time to set appointments and show the properties. Juggling your schedule to meet applicants at the property takes a good deal of time, as does going through the qualification process. You’ll have to access reports from credit bureaus and order background information, as well as verifying their employment.
Record Keeping
Owning rental property requires detailed record keeping throughout the year to measure your profit and losses, along with tax reporting. Unless you’re set up to handle the receipts and accounts payable, it may seem overwhelming. Since the tax laws allow many deductions, it makes sense to turn this activity over to property management companies who are familiar with accounting and tax reporting rules and can connect you with an accountant who specializes in rental property deductions .
Call us today if you’re getting started as a property investor in the Orlando area or need to find a trusted property management group.