Really how important is it to have a property managment company when investing in real estate?

Question

About what percentage of real estate investors use property management?

Answer 1

I used property management for years until I got 'big enough' to develop my own 'property management'. You don't have to engage a property management service, but then YOU will have all the phone calls and headaches.

Answer 2

What kind of business does your company presently conduct? You may not want to hold property in a company that let's say, wholesales prescription drugs or sells liquour. You want to isolate that liability or from your primary source of income or where you have personal property of value, like a bank or investment account or other assets that would induce a law suite because they feel you could satisfy the debt if they win. I attended a symposium on protecting yourself from law suits. The attornys suggested that you have a limitted partnership hold the property, with a corporation as the primary partner and yourself as the limited partner. The gist of it was that you cannot seize property from limited partnerships to satisfy a law suit and can only claim money that would be distributed to the limited partners. The point being that if the partnership earns money, but doesn't distribute it to the partners, the creditor (winner of the law suit) still has to pay income taxes on the money earned, though they never got any of it. The upshot being, they will settle out of court and usually for the insurance amount. This seems a little extreme for a single house or even a handful of them. If you insist on holding a property in a corporation of some sort, an LLC would be ideal, but keep in mind that the corporation has a limited life span of 20 years. LLCs were intended to be a step on the way to a C corp for beginning businesses. You can choose to set up the LLC or S corp to "pass through" the earnings and have them taxed as personal income. C corps have a double taxation, but are better tax deductions for active companies. You can provide your health insurance through the company, and have it totally tax deductible for the corporation. You can also have corporation meetings in let's say . . . Hawaii or any place else. Not unusual for businesses. Still a C corp is extreme for a beginning real estate investor. There are some online places that will help you create a LLC or S corp. One I've heard about is Legal Zoom. I am not connected with them and have never used them. Just making a suggestion on where to search. You can always contact a lawyer to do the work as well. BTW, I own several houses, and they are all in my name. I wouldn't get too exercised about setting up a company till you are sure real estate is where you want to go. You can have a house or two in your name without a lot of risk, if you don't advertize to everyone what you own.

Answer 3

It depends on what you are doing and on what scale.

Most smaller real estate investors, those who own a few properties that are within a few miles of where they live, do all the property management themselves.

Those who use property managers generally fall within these categories:

They own properties outside the area they can easily travel to - maybe in another town or even another state.

They own lots of rentals or several commercial properties and they don't have the time to do their own property management.

They just don't want to deal with renters, so they hire a management company to handle that part of the business.

I've done both. Normally, I would just handle my own management. However I have several properties I own in different states so I have management companies handle those.

Answer 4

If you are buying vacant lots you don't need a property manager. If you are going to be leasing or renting the property either your management company or you must take care of collecting rent, selecting renters, marketing the property, handling disputes, fixing the furnace, etc.

Answer 5

The Bulgarian property market is producing some fevered activity amongst European overseas property buyers. Examine the Bulgarian housing market and it's easy to see why this region is causing so much excitement. Low prices and rental opportunities that cover both summer and winter periods makes Bulgaria attractive for overseas property investment.

I suggest you visit this site for more information and latest news : http://www.paradisemalta.com/bulgaria-property.htm

Answer 6

I work for the government, and most property owner sget leasing companies if they don't want to deal with the tax part of it. You really don't need a property management company unless you don't want to be bothered with the government.

Answer 7

I dont but I also dont have a FT job. I spend my time with my buildings. If you are working FT and owning property you might consider it. Management companies are also good if you are not living local to your property.

Answer 8

Yes, One easy to use property management resource from TReXGlobal.com (www.trexglobal.com/property-management ), is now available for those who want to save time and money while managing their rental properties. See.....http://www.trexglobal.com/

Answer 9

It depends on how hands on you want to be as a landlord. For many owners it is worth it to pay a percentage to have someone else advertise, show and lease the units and collect rent, serve eviction papers, etc.

Answer 10

been there, done that.. i am able to manage property than any of the companies i tried.. and they were a rip off too!!