How To Own An Apartment Building: Owning vs. Owning And Operating
If you’re interested in buying commercial property to rent out, you’ll need to decide how involved you want to be with your properties. Your level of involvement with your property is truly a personal decision that will depend on your skills, experience, time availability and interest. If you’d rather hire someone to handle the operating and managing of your property, you’ll have more time to focus on other matters. But if you’d rather be more hands-on, operating your multifamily rental property yourself does come with advantages.
Are Rental Properties a Good Investment For Property Owners Who Hire Managers?
If you’re not able to operate your rental property yourself, or if you’re simply not interested in handling the details of daily operation and maintenance, you can hire a property manager or operator. You can choose an independent property manager or property management company. Hiring someone to help you operate your property is a good idea in several scenarios.
You’re Too Busy
Dealing with operating your property can be more time consuming than it seems. If you have someone else handling operational tasks, you’ll have more time to spend doing other important things, like assessing real estate data and identifying other investment opportunities.
You Don’t Live Near Your Property
Managing and operating a multifamily rental property is difficult if you don’t live nearby. If operating your rental property remotely proves to be too complicated and cumbersome, hiring a property manager would be beneficial.
You Don’t Want to Handle Tenant Relations
A property manager is skilled and experienced with day to day management such as collecting rent payments, communicating with tenants and resolving any landlord-tenant conflicts. A hired property operator may also be able to help fill vacant units using marketing efforts, and they will have experience soliciting and screening rental applications to ensure the best tenants sign a lease.
Advantages of Buying Commercial Property to Rent Out and Operate Yourself
With a little bit of research and time, you can own and operate your multifamily rental property. Here are some benefits to managing your property yourself:
Owner/Operators Can Save Money
If you hire a property manager, you’ll have to pay a percentage of the property’s monthly income, usually between 4-10%, to the property manager. If you plan to manage the day-to-day operations yourself, you’ll save that money! Managing the operations yourself is often more affordable, especially for smaller properties.
Owner/Operators Have More Control
Handing the reins of your property over to another entity takes control away from you as the owner. Managing day-to-day operations yourself gives you control and peace of mind. Spending time at the property will help you be more aware of any maintenance needs in your units, and you’ll be able to directly oversee repairs to ensure they’re done properly.
Tips For Getting Started As A Multifamily Property Owner/Operator
- Start small. The more units at a property, the more complex (and time-consuming) it is to manage. Duplexes and fourplexes are great options for a first-time owner/operator.
- Start local. It’s hard to manage a property in an area you aren’t familiar with, especially if you don’t live there. Buying a commercial rental property near your own home will be more convenient to handle.
- Evaluate Your DIY Skills. If you’re confident with household projects and maintenance tasks, doing things yourself will save money. But if you know something is beyond your capabilities, hiring help will often save time and money.
- Keep Your Tenants Happy. Vacancy can be a big struggle when you don’t have a manager helping you fill your empty units. If you’re responsive to tenants’ requests and you’re committed to making the building a nice place to live, tenants will be more likely to renew their leases.
Contact Us to Learn More About How to Invest in Rental Property
Overall, are rental properties a good investment? Buying commercial property to rent out can be profitable for both real estate owners who hire managers, and owner/operators who have a more hands-on approach. If you want help figuring out how to own an apartment building or how to be an owner/operator, reach out to us today. Check out our commercial property listings if you’re ready to make your next smart real estate investment.