TURN-KEY OR DIY: PURCHASING RENTAL PROPERTIES THAT MAKE SENSE FOR YOU TRACY ROYCE
Step 3: Attracting Qualified Tenants and Hiring
Reputable Management
This is another step you could choose to do yourself,
or piecemeal parts off to a Management Company. But,
if staying with the theme of going it alone versus
purchasing a final product, the tenant placement and
management tasks can be broken down. This would
include the advertising, negotiation, choosing an
application to use, doing background and credit
checks, and all other due diligence to qualify a solid
tenant. As well, the management would involve
collecting rents, following all state rules, repair issues,
possible eviction, and turn-over when the current
tenant moves.
If purchasing from a turn-key company, you’re getting
an in-house company or a company they have an
established relationship with. Again, their marketing
dollars also go to finding qualified tenants, of which
overflow from one property can be shown their other
Turn-key providers are going to have a dedicated
crew to renovate the property, probably using
available properties. Typically, property management
will cost around 10% of the monthly rent, which can be
similar materials, paint colors, and fixtures with
tied to the gross or net rent. If you’re collecting
little to no guesswork. They are also purchasing
$1,000/month, you’ll be paying a manager around
materials in bulk so will be able to lessen the
renovation expenses.
$1,200/year to manage the property. This is pretty
typical of any property management company though,
but you can shop around for the best fit for you.
If you are only doing one to two fix-ups a year,
most likely you are going to be using retail outfits
like Lowes and Home Depot, and researching to
find general contractors and vendors. The time and
effort it takes to hire and manage contractors and
vendors can be an art and science, even if you
have previous experience in doing so. And, there
is a time-value on your own schedule that needs to
be considered.
The turn-key operation may also provide you with a
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