Whether you own rental properties on your own block or are investing out of state, it is important to recruit and use a professional third-party property management company.

Here are just five of the reasons you need it…

1. Generating Truly Passive Income

Rental property investing is frequently promoted as a way to generate passive income. It can be, however, taking the DIY approach to being a landlord rarely passive and profitable. You might get blessed and get a property with perfect existing tenants, who pay 12 month’s rent in advance and never have any issues with the property. That’s the rare exception.

To truly achieve passive income, you need to use a property management company who will handle all the daily management. Like bookkeeping, advertising, tenant screening, leasing paperwork, handling phone calls, scheduling contractors and fielding quotes, and regular inspections and maintenance. That does not include all of the extra work if tenants are struggling to pay on time.

To be truly passive, you want someone else handling it, and to just receive the check every month while your property goes up in value.

2. Privacy

Privacy is incredibly important. We don’t have much of it left these days. So, preserving whatever we can is more important than ever.

There are several ways to build in privacy as a real estate investor, including how you hold title. Still, if you break protocol and contact tenants in person, you’ll end up losing that privacy forever. It may not seem like a problem at first. Then you’ll start getting calls to your home and cell phone, and maybe even unhappy tenants showing up at your door at all times of the day and night with problems. You really don’t want that.

Using a property management company can help keep you anonymous.

3. Reducing Liability

It is a terrible shame at how litigious our society has become. Yet, it is the reality of the environment we live and invest in. There are countless professional criminals and opportunists out there who make their money and free rent by preying on other individuals, investors and business owners.

An experienced pro property management company can go a long way to helping you avoid running into these bad actors in the first place.

If they do sneak through or go bad, the last thing you want is personal interaction with them. Showing up to collect rent or inspect your property can result in numerous reasons for a frivolous or malicious lawsuit, even if you do nothing wrong. Then there are always personal safety concerns. Just don’t put yourself in that situation.

4. Great & Consistent Customer Service

Ultimately, real estate and rental property investing is a people business. You personally probably shy away from bad customer service experiences and gravitate to where you are treated well. Tenants are the same. You can either deliver consistently great service and get consistently great and exponentially increasing results, or the opposite.

To do well and get referrals, enjoy loyal, performing tenants who take care of your place you need to be instantly responsive to calls and emails, texts and repair requests and be able to do it in a friendly manner, even when you don’t feel like it. You also want eyes on the ground to watch and inspect your property regularly.

5. Compliance

Staying on top of landlord-tenant laws is a big full-time job. One wrong date on a notice can cost you everything.

Do the math and it is invariably cheaper and more profitable to use a great property management company. Especially when you add in the discounts on repairs and maintenance they can get you, and the ROI on your time.

Is DIY rental property investing or turnkey real estate investing the best move for you?

Income property investing should be a core staple of every individual and family’s finances. There is no question about that. One thing that some do debate is whether they should be trying investing on their own, or using a turnkey real estate service to find and manage their income property investments.

What Is A Turnkey Real Estate Service?

Turnkey real estate services provide a full service experience. They find the properties, evaluate and screen them, help with renovations and repairs, place tenants, and then ensure professional property management is in place.

It is a done for you approach to real estate investing. While it is a newer concept in the US, it has been the go-to method for real estate investors and especially sophisticated investors internationally for much longer.

The Truth About Being A DIY Landlord

You can make money as a do it yourself, self managing landlord. You can learn to find properties, go through all the steps to buy them and lease them, and then manage them until you get tired and sell them off.

It is possible, but the reality is that it is work. Being a DIY landlord is a job. Probably more than a full time job. Don’t expect any vacation time or to ever not be on call. Make sure that when you are calculating your returns you are also factoring in a fair wage and salary for yourself for all of these hours.

If you are doing it from scratch there is a lot of trial and error too.

Why Can’t I Build My Own Team?

Another alternative is to build up your own company with team members to handle all of the things a turnkey service does.

That means hiring people for:

• Marketing
• Leasing
• Acquisitions
• Bookkeeping
• Rent collection
• Maintenance

Unless you just want to create another job for yourself recruiting and hiring and managing all of these people full time, then you’ll also need to hire great executives and managers to manage these other people.

This takes time and money to do.

Compare that to a turnkey service or professional property management company. Can you do all the above for the same 5% or 10% of rents they would take in fees? Unlikely.

At some scale it may make sense. Though the numbers just won’t add up for most investors.

The Benefits Of Turnkey Real Estate Services

Among the many advantages of going turnkey are:

• Harnessing years of expertise overnight
• No salaries, benefits packages, or employee lawsuits to worry about
• Leveraging established local and national connections and relationships
• Benefiting from group discounts on contractors, repairs, maintenance, etc.
• Eliminating risk of direct engagement with tenants
• Generating truly passive income

There are some things you can DIY. You can wash your own car on the weekends if you have nothing else to do. You can cut your own grass if you really just love being out there doing it. It’s not very efficient, but if you are bored it can fill your time and get you out of the house. Other things should absolutely be left to professionals. Like taxes, dentistry and surgery. Where does investing fall on this scale for you?