Property Management
One of the things that puts people off on the idea of owning income property is the actual landlording side of the business. Many people don’t want to get their hands dirty dealing with a broken water heater or a leaky sink. I guess I can understand that, as I don’t want to do that stuff either. But some people have a mental block toward this kind of thing. Now let me admit to you, I am not the most handy person in the world. When I was a kid, if something wasn’t working in my house either my dad fixed it or somebody else did. So for me, if there’s a problem with a fixture, I just call a professional to go over and figure out what the problem is. Sure it would be cheaper to do it yourself, but if you don’t know how to do something and you don’t care to do it yourself, you may as well pay someone else to do it. If you really don’t want to do anything at your properties, then you could always hire a property manager. A property manager is a person (or company) that handles all the aspects of a rental, from repairs, to taking calls, to getting new tenants to fill vacancies. If you go this route, you won’t have to deal with anything at your property yourself, all you’ll have to do is consult with your property manager every once in a while to see how things are going. Property managers take a percentage of the gross rent (usually around 8% or so), plus they usually charge a flat fee for taking tenants phone calls. Property management does cost a decent amount of money, but if you are, say, a busy professional looking to invest your money in something better than stocks and mutual funds, buying an income property and having it managed is a smart way to invest your money while still keeping things fairly hands off. Since these people will be handling your incoming rents, make sure you investigate the company thoroughly and make sure they are bonded and insured as well.