Considering Renting Out a Property? Here are Some Important Things That You Should Know About Property Managers and Landlord Insurance
Property Managers
In the minds of many. the idea of renting out your property is something that they have wanted to do for a long time, however, have avoided because of the risk associated with it. Due to the size of investment that a piece of real estate is, renting it out can be an emotional and extremely stressful task. To help reduce the stress associated with renting out your property, it is a good idea to consider hiring someone to fill the role of “property manager”. Many people assume that the main role of a property manager is to collect the rent, while that is obviously an important part of the role, there is a lot more to the job.
Contrary to what a lot of people assume, hiring a property manager does not mean that you are handing over all of your profits, it does mean that you are paying someone to do a job and that sometimes this can cost up to 10% of the rental income. Once you find a property manager that you are confident in, it is a good idea to have your property manager work with you on deciding what tenants will be charged for rent. There are a few reasons for this, one of them being that while obviously rent has to cover the ownership, and additional overhead costs, the rent really has to be based on the current local market, which is something that your property manager should know about. A great way to see if you and a prospective property manager are on the same page is to address the rent issue during the interview process. Find out what their take is on the local market, and what their thoughts are on different rent styles, (utilities included vs not for example).
If you were able to hire a qualified and experienced property manager odds are they will have a fair bit of experience in drawing attention to your property and drumming up interest. Having them being an active part of this process is important because they are the ones responsible for finding, and approving tenants.
Landlord Insurance
When it comes to renting out a property, finding a qualified property manager and tenants are not the only things that you have to do. It is also important to make sure that you have good landlord insurance. Landlord insurance, will cover you, and bring you peace of mind. Renting out your property is a huge risk – even with the most qualified property manager.
Without property landlord insurance you have no way of really protecting yourself financially. As with all insurance policies, it is important that you do your research, and look around to find the best one for you, and your situation. Renting out your property can be a great way to pay down your mortgage, and build equity, however, it is a big risk, and should be treated as such. By making sure that you have done your research, and have hired the best property manager possible, you will be reducing the risk of hurting your investment.