If you’re looking to make some money through rental properties, you’ll likely find it a very profitable endeavor – but it might not be a passive income strategy. That’s because rental property businesses typically require a lot of work. You’ll need to find good tenants, manage repairs and maintenance, and keep up with the books. However, if you can put in the work, you can make a lot of money through rentals.
However, it doesn’t mean you can’t make it a passive income stream. If you’re willing to put in the work upfront, you can eventually hire people to take care of the day-to-day tasks, freeing up your time. It might mean paying for professionals, but you are at least taking the workload off your responsibilities.
If you want to make your rental business passive, here are the types of people you’ll need on your team:
A Property Manager
If you want to make your rental business passive, it’s essential to have a property manager in place. They will be responsible for finding and screening tenants, handling repairs and maintenance, and keeping up with the books.
Finding a good property manager can be tricky, but it’s ultimately worth it. You can start by asking for referrals from friends or family members who have rental properties. You can also check with local real estate agents or property management companies. Be sure to interview several candidates and ask for references before deciding.
You can find property managers online. Identifying the characteristics that make a person qualified for the role will be necessary. It involves a lot of responsibility, so you want to be sure they are someone you can trust. The property manager needs to be organized and has good people skills. They should also be able to handle difficult situations, such as evictions.
It’s important to remember that hiring a property manager comes with a cost. You will likely need to pay them a commission, ranging from 5% to 10% of the monthly rent. However, this is worth it if it allows you to focus on other things and makes your rental business passive.
You might not need a lawyer on your team if you already have a property manager. However, it’s still a good idea to consult with one before starting the rental business. They can help you navigate the legalities of being a landlord and protecting your interests.
For example, they can help you create a lease agreement that is fair to you and your tenant. They can also advise you on dealing with problem tenants and evictions. Having a lawyer on your side will give you peace of mind and help you avoid legal complications. If a tenant files a lawsuit against you, having a lawyer can help you defend yourself.
Fortunately, there are lawyers specializing specifically in the rental property business. They have the experience and knowledge you need to protect your interests. It will be necessary to find a lawyer, even if you have to pay them a monthly fee. If there are no legal lawsuits or actions, they can still perform tax requirements or update rent agreements.
A CPA or Bookkeeper
You’ll need to outsource the financial responsibilities to make your rental business passive. It means hiring a certified public accountant (CPA) or bookkeeper to handle the books. They will be responsible for keeping track of rent payments, expenses, and profits. Having someone else do the essential financial responsibilities for you will free up your time and allow you to focus on other things.
Your accountant can also help you set up a system to track rent payments and late fees. Keep up with your finances and ensure you are getting paid on time. An accounting system will save you a lot of time and hassle.
CPAs and bookkeepers charge by the hour, so be prepared to budget for their services. You can find them through referrals from friends or family members who are landlords. You can also check with local real estate agents, property management companies, or online directories.
You will need to have a handyman on call to handle any repairs or maintenance that needs to get done. It’s essential to find someone you can trust and who is reasonably priced. You don’t want to get overcharged for simple repairs. A handyman can also help keep your rental property in good condition, taking on responsibilities like changing lightbulbs, fixing leaks, and unclogging toilets.
A handyman will be especially useful if you live far away from your rental property. Having someone local who can take care of these things for you will save you a lot of time and hassle. It will take one of the most significant responsibilities off of your plate.
You’ll need several people on your team to make your rental business passive. They include a property manager, lawyer, accountant, and handyman. Each of these professionals will be essential in ensuring your business runs smoothly. With their help, you can focus on other things and relax, knowing that your rental property is in good hands.