Managing one rental property is challenging, but managing multiple properties across various locations can be impossible. But with the help of a rental management company, being a multi-location landlord can be manageable. In this post, we’ve put together a few reasons why it’s a non-negotiable to work with a property management company in each of the markets you’ve invested in.
What is a multi-location landlord?
A multi-location landlord owns rental properties in more than one location. Their rentals can be within the same state or across the country – for instance, they may own a rental in South Florida, California, and more. They can also own multiple properties within the same state, such as Florida only. Since they run their rentals from a distance, they’re also called “long-distance landlords”.
What are the pros of being a multi-location landlord?
Managing more than one rental property in a range of markets can be challenging, but it comes with certain perks. Let’s take a look at the pros of having a vast portfolio of rental properties:
#1 Make more money
The main benefit of having a vast investment portfolio is that you’ll be able to make more money. The more rental properties you have, the more rent you’ll make – that is, of course, only if you’ve invested in money-making properties. For that reason, it’s crucial to conduct a rental property analysis with the assistance of a property management firm.
#2 Diversified risk
Compared to other types of investments, real estate is relatively low-risk as there will always be a demand for it. However, that doesn’t mean that some markets won’t take a downturn. By investing in more properties (and more property types) in various locations, you’ll be able to bounce back in case of crisis.
#3 Take advantage of trends
Let’s say that more and more people are moving out of the city and into the suburbs. If you own a rental property in the suburb, you can take advantage of this trend. Your city rental won’t be in-demand, but at least you can still make money from your suburb rental.
#4 Greater return on investment
By owning more than one rental, your long-term return on investment (ROI) will be greater as more properties will appreciate. Your short-term ROI will also be significantly greater, as you’ll get to make more money.
#5 Chance to finance new properties
In general, obtaining more real estate becomes easier the more properties you own. You can set aside a portion of the money you make from your initial investment property to use as a downpayment for a new real estate investment. Once you’ve purchased your new property, you can use both rental revenues to cover both loan payments.
How a rental management company can help
If you plan to own multiple rental properties across various locations, partner with an investment management company. With them by your side, managing more than one property will be a no-brainer. Here’s how they can help:
#1 You no longer need to travel
Suppose you own rental properties in South Florida and California. Instead of flying back and forth to deal with rental-related responsibilities, why not delegate your tasks to a third party? Even if travel expenses are tax-deductible, traveling can be time-consuming and exhausting. Partner with a property management company in each area where you own a rental to free up your time and to be free from your responsibilities.
#2 They’ll be your eyes and ears
One of the biggest drawbacks of being a long-distance landlord is that you can’t keep an eye on your properties. Multi-tasking is a myth – while you run one rental, there’s a good chance that you’ll neglect your other rentals. Since you can’t be at two places at the same time, it’s best to partner with a rental management company from each location. That way, you can rest assured that someone can personally deal with rental-related problems. What’s more, property management companies can keep your rental crime-free, since they can deter would-be burglars with their presence alone.
#3 They know the market
As a landlord, you need to have a general understanding of how every market you’ve invested in works. If you don’t take the time to study the market, how can you make sure that your property makes money? How can you set the correct rental rate? How will you know what your market is looking for? Getting to know one market is manageable, but imagine having to do that for a variety of markets. A local property management firm, on the other hand, will be well-versed in your specific market. It will be a walk in the park because it’s what they’ve been doing for ages – they already know the market very well.
#4 They know the law
Rental laws aren’t the same in every state. For instance, laws on “advance notice” vary – in California, landlords need to give their tenants a 24-hour notice, while in Florida, a 12-hour notice is needed. Not only that, but local law can be more specific than state law, too. Remembering all of the laws in every market you’ve invested in can be an impossible task. With that said, it’s best to hire a local property management company that’s already well-versed in all laws.
#5 They’ve built a strong vendor network
What will you do when something goes wrong? Let’s say your tenant in South Florida reports a leak, but the problem is that you’re in California. You Google for “plumbing company in California” and choose the first one that you find, but they end up being unreliable. That’s only one of the things that can go wrong when you don’t partner with a rental management company. It would be wise to partner with pros who’ve built a strong vendor network, and who can avail of services at a reasonable (in short, lower) price. That way, you won’t have to try your luck on vendors whom you haven’t vetted.
Are you a multi-location landlord?
If you’re a multi-location landlord who owns a rental property in South Florida, partner with the experts at Luxury Property Care today. We’ve been in the business for years and know the South Florida market like a book. With us by your side, you won’t have to worry about anything – we can guarantee that your property will be well-managed, even if you’re miles away. For more information, call (561) 944 – 2992 or complete our contact form.