If you’re just getting started with real estate investment – or even if you’re a seasoned owner and landlord – you’re probably running into some surprising challenges. After all, investment gurus and money mavens tend to discuss real estate as the end-all and be-all of financial wisdom. Isn’t this the smart way to invest your hard-earned cash?
The reality is that real estate investment is a profitable and gratifying investment strategy for many owners… and it can also be hard work. That’s especially true if you go the landlord route and manage your own properties. And while there’s no entirely effortless way to pull in rental income, partnering with Great Jones for your rental property management needs will bring your stress, hassle, and heartache to an absolute minimum.
Here are the three most surprising things about owning and managing rental properties – and how to best prepare yourself for them.
1. It ties up your funds
When you invest money in real estate, that money is no longer liquid. That simply means it can’t easily be converted into spendable cash. Your real estate portfolio might be worth millions of dollars – but that won’t help you a bit if you need to come up with several thousand on short notice. This is especially challenging for the average small-time owner or landlord, who might have most of their net worth tied up in a few rental homes.
The solution here is to work with a property management service that keeps your money flowing as freely as possible. It’s common practice for a property manager to keep a “holdback” – meaning they reserve your tenants’ rental payments for a full month after collection to allow more time for checks to clear and to spend on maintenance and repairs (or even their own business costs!). With Great Jones, it’s different. You always receive your rental income the very same month we collect it, so you can stay as liquid as possible. As long as your properties are occupied, your income is flowing.
2. It’s a 24/7 job
If you choose to manage your own properties, we can promise you this: You’ll be shocked at just how much attention is required. Everything from leaky pipes and malfunctioning boilers to noisy neighbor disputes and pest control is your responsibility. And of course, it can’t wait until later – whether it’s Christmas morning or your summer vacation, you have to jump on tenant problems the moment they arise. That’s why the landlord / manager role is a job you never really get a break from.
The solution is to let someone else be your property manager – and make sure they’re someone you trust. As a full-service management company, Great Jones stays on the front lines of your tenant issues, so you don’t have to. We’re available to your tenants 24/7, for emergencies and regular maintenance issues – both online and via phone. We also do proactive maintenance, so that leaky pipe gets fixed before it becomes a major flood. Great Jones keeps you in the loop, so you always know what’s going on with your property, while protecting you from the headachey details. Keeping you and your residents happy is our job, and we do it with pride.
3. It’s a minefield of hidden fees
If you do decide to work with a property manager, here’s a number to keep in mind: 18-23%. That’s the outrageous portion of your rental income you can expect to fork over… unless you work with Great Jones. We charge you about half that.
You see, most management services bill you for every little interaction. When there’s a site visit or a routine inspection? That costs you up to $200 per visit. One of the residents needs maintenance? You’ll pay a call fee, plus markups, and parts and labor. Signups and cancellations? Those run up to $500 each. And for lease renewals, you’ll shell out a 25% fee. Don’t even get us started when it comes to the fees that they’ll also charge your residents!
With Great Jones, on the other hand, there are no hidden fees, no markups, and no fine print. All you ever pay us is two simple fees: A) a management fee and B) a placement fee for every guaranteed tenant we place, meaning if they break a lease, we’ll replace them free of charge. It’s just one more way we keep your stress low and your income dependable.