All investments require management. Some require less than other investments. Real estate is more management-intensive than most other investments. You can do it yourself or hire a professional property manager.

I encourage new investors to try managing by themselves for a while to better understand what the professional has to handle.

Many of our new clients are former DIY owners who are frustrated and exhausted from handling details, demands, and personality conflicts with their customers, the tenants.

FINANCIAL REQUIREMENTS

Let us discuss the financial requirements of being a landlord. One of my colleagues made a profound statement in a class we were attending: “DON’T OWN REAL ESTATE UNLESS YOU CAN AFFORD IT.”  What did he mean? Most rental income won’t cover emergencies such as replacing a roof, major plumbing problems, or electrical, air conditioner, and heater failures. Other expenses are reserves for rent uptime and advertising. Some experts say that you should allow about $1,300 annually for maintenance of a single-family home. Depending on age, new homes would be less while older homes would be more.

An excerpt from my new book HOUSE INVESTORS’ MANUAL

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