What’s not to love about earning money in your sleep? That’s the idea behind passive income, which is income you regularly earn without any additional work to maintain it. You put in a certain amount of time or money up front, then let the money roll in while you sit back and relax. Sounds awesome in theory, but in practice, it often doesn’t work this way.
With passive income, the idea is to build a system that automatically earns you money. That system usually takes up front effort, but also even some occasional maintenance, which renders it not truly passive. And with some of these methods, “occasional maintenance” is a lot more hands-on than it seems. We’ve talked about some of these techniques before, and while they’re theoretically passive, a lot of people who earn money from them will tell you there’s quite a bit of ongoing work.
When you are in the real estate industry for long-term gains, you will come across some very urgent situations at odd hours of the day. For instance, a flood could occur in the middle of the night. If you don’t have someone on call at this time, the flood could cause much bigger problems for you. In a situation like this, you can’t afford to wait around for the company to open in the morning. You need to have a team that has the right infrastructure in place to promptly respond to such emergencies.
Remember that real estate investment is in the service industry. As such, customer service should play a huge role in how you choose your property management company. When you hire a property management company that has 24/7 emergency service, you gain some peace of mind knowing your investment is safe and well-taken care of, whatever the time of day.
Renting Out Property Involves Lots of Upkeep
Whether it’s a room in your home or an entire home you’ve purchased, renting out property is often cited as a popular way to earn passive income. You invest money in the real estate, find a tenant and earn a return month after month. Seems simple and passive, right? But any rental property owner will tell you: it’s not that easy.
Below are a few examples of things many of our clients have told us when they were self managing their so-called passive rental income:
- Deal with the inevitable ‘the boiler has broken down’ call on a Saturday morning (or did they call on Christmas Eve night?)
- Regularly check your properties for ‘non emergency’ repairs that if left unattended can cost you serious money in the long term (e.g. leaking guttering = long term damp)
- Screening potential new tenants
- Document move in/move out reports for ingoing/outgoing tenants
- Do your record keeping of income and expenses
- Prepare property documents to discuss detailed tax planning with accountant
- Constantly remind yourself of why I wanted a second job as a property manager
Normal nine-to-five days may be classified as full-time work, but in real estate, it is not enough. Your property is open to all kinds of risks at all hours of the day or night, hence it is vital that the your property management company has a 24hr service (that is 8,760 hours a year).
We are here to help
If you are weary from the headaches of maintaining and renting out your property, Westhawk Property Management is here to help. We provide professional service to all properties we manage and offer Concierge service to owner-occupied homes so we help you to find roofers, electricians and other home pros to help you get jobs done.
The Westhawk Property Management team of professionals are here to help you build wealth through real estate investing. We will free you up to pursue your career, spend leisure time with your families, while at the same time saving you costs and frustration. Call us today to discuss how we can be of service to you.