Houston rental property is a lucrative investment. Not only will you get to collect a small profit each month—you’ll also get property equity in one of the fastest-growing cities in the United States. But the day-to-day responsibilities of being a landlord and managing a rental property can feel overwhelming, even if you’re accustomed to the world of real estate management.
The ideal situation would be to make your Houston rental property a “hands-off” investment. In other words, you’ll turn your investment into something that’s purely passive, requiring little to no effort on your part.
Is this truly possible, and if so, how can you achieve it?
Choosing the Right Property
Your first job is choosing the right properties for your portfolio. If you choose a property that’s going to require an inordinate amount of maintenance and care, you’ll end up spending far more hours than you should managing the property.
Good, low-effort properties tend to have one or more of the following qualities:
- New or recently renovated. There are some advantages to buying an older home. You’ll likely get a better deal, and you’ll have a home that’s aesthetically styled in a way that can no longer be replicated. However, old homes tend to come with an assortment of problems. Old plumbing can cause leaks and other issues. Old electrical work can present a fire hazard. And miscellaneous elements of the home, including windows, walls, and appliances can all be especially prone to issues. That’s why it’s in your best interest to buy a new property—or a recently renovated one. If you choose to buy an older home, consider renovating it upfront to reduce the maintenance required in the future.
- Small and simple. It’s also a good idea to purchase a property that’s both small and simple. It stands to reason that the bigger a property is, the more maintenance it’s going to require—and the more things that can go wrong with it. This is also true for complex homes, with strange or outdated design elements or additions like swimming pools. Small, simple homes will require less work from you overall.
- Good neighborhoods. You’ll also need to think about the neighborhood in which your property resides. The Houston area is full of good neighborhoods, but not all neighborhoods will suit your needs. Think about crime rates; lower crime rate areas tend to have fewer incidents of property damage and burglaries, which results in fewer headaches for you. You should also look at incidents of storm damage and damage from other natural disasters. Property insurance can financially protect you from many of these elements, but it’s still going to be a logistical headache if you have to manage a claim.
Hiring a Property Management Company
Even if you find a “perfect” property, you’re going to invest a lot of time into regularly maintaining the property and handling your responsibilities as a landlord. There’s no way for you to escape all points of management or decision making, but by hiring a property management company, you can avoid most of the grunt work in exchange for a small percentage of your gross collected rent.
Obviously, this means sacrificing some of your profitability, but the time and effort savings are typically worth it. Property management companies will handle many responsibilities on your behalf, including:
- Tenant screening. One of the first responsibilities a property manager will help you with is collecting tenant applications and screening tenants. You won’t have to wade through the paperwork yourself, or worry about following every fair housing law; instead, you can have a professional handle this task for you. Not only will it spare you manual effort, it will also help you fill your vacancies faster.
- Rent collection. Rent collection may seem like an easy task, but your tenants won’t always be perfectly on time. It’s incredibly helpful to have a property manager take care of monthly rent collection so you don’t have to worry about it.
- Maintenance requests. Even with a new property, you’re going to have to deal with maintenance requests from tenants—everything from a leaking ceiling to a lawn that’s in need of a trim. Property management companies will take care of most of these requests on your behalf, and for more complex projects, will help you find contractors who can handle the work.
- Tenant payment issues. If a tenant becomes delinquent or behind on payments, your property management company will spare you the effort of dealing with it.
- Record keeping. Property management companies also excel at helping you maintain consistent records. When you’re managing multiple properties or complex situations, it can be hard to keep track of all your important documents and formal actions.
- Property marketing. Whenever a tenant leaves, you’ll need to fill the vacancy as quickly as possible. By yourself, that means spending hours of effort marketing and advertising the property. But with the help of the right company, you won’t have to worry about this responsibility at all.
- Eviction management. Some landlords will never have to deal with an eviction. Those that do may have to spend weeks, or even months, fighting the case in court. A property management company can handle most of this process for you, saving you hours of time.
- Advisory services. You may also be able to use your property management company for advisory services, such as helping you find new properties to add to your portfolio. This can save you time in a number of different ways.
Keep in mind that because property managers are professionals in their industry, they also tend to be better at completing these responsibilities efficiently and effectively, potentially increasing the value of your property in addition to making your life easier.
If you’re interested in making your Houston property as hands-off as possible, so you can appreciate the true meaning of the term “passive income,” you’ll want to hire a Houston property management company. Contact Green Residential today to learn more about our services for Houston property owners, or for a free quote!