Many new property owners are intrigued by the idea of having an effortless passive stream of income, but don’t realize how much work it actually takes to manage a property.
If you have a busy schedule, live far from your property, and have little opportunity to be involved in your rental investment, you may be unprepared for some of the challenges that come with owning remote real estate.
Unlike having a roommate who you can keep tabs on, being an absentee owner can lead to the following 3 things:
When tenants know their landlord is unlikely to visit the property, they are more likely to violate lease terms by having pets and subletting to unregistered roommates. If you don’t know who resides in your property, you also don’t know what kind of condition you will get it back in. Even if your have a property management company handling your home, these details can easily be overlooked, especially if the company manages many properties.
If you have ever lived with irresponsible roommates, you may know how hard it can be to get them to pay rent on time. Now imagine how much harder it would be to get rent payments on time or even at all if you don’t live close to your property. The relationship you build with a tenant by seeing them regularly and being present can prevent dealing with this issue, but you probably don’t have time to make a drive that may cost you half your day and a headache, just to knock on someone’s door for rent.
Even if you don’t reside near your property, repairs and maintenance are still your responsibility. Something as small as a clogged sink could cost you a great deal if you are unavailable and your tenant has to hire an outsider to get it fixed. While a property management company can help, they will also take a good portion of your profits.
These issues can accumulate, and unless you are equipped to handle them, you may find that the loss of time and money simply isn’t worth it. Remember, a real estate investment is limited by how well it is managed, and if you your not involved, then there’s a good chance it isn’t being managed well.
If you resonate with the above scenarios, you may be considering escaping the stresses of owning real estate, by selling on the open market. While this may be tempting, there are some things you should keep in mind. First, real estate agents are a valuable tool, but their services don’t come without a price.
You can’t just put a for sale sign in your front yard, and expect the property to sell. You need to be considerate of your current tenants. Although you may not be on good terms with them, and it is your right to sell your property, by law, you are required to give them a 30 day’s notice to move out. If you are lucky they will leave peacefully, but in some cases you may end up going through the lengthy process of eviction.
Once they home is vacant, it is uncertain how long it will take to sell or to find new tenants. Without that stream of income, the costs you will incur in property taxes and other holding costs can quickly add up. This is not to mention, the money you will have to drop into the property to repair any damage the last tenants may have left. At this point, you likely don’t want to sink any more money into the home you’re about to unload.
If you would prefer to avoid the market and the hassles of selling all together, Ellette Visions can help. We value your experience, and make it our goal to make the process easy and hassle free. We can make you an all cash offer within 24 hours and can close in a matter of days or on your timeline. We will buy the property as is, so you don’t have to make any renovations. You have enough things to worry about, your home shouldn’t be one of them.