So…you’re thinking about moving your retirement money out of the stock market and investing into income producing real estate with a Self Directed IRA or 401(k).
You have two choices. You can either invest in a “turn-key, cash flow” property that already has a tenant and property management company in place, or you can purchase a property and hire a company to find a renter and manage the property for you.
In the second scenario, a property management company can be one of your biggest assets when managing your investment properties. From taking you out of the day to day, to finding a good quality, long term tenant, these property management companies make investing in real estate simple and hassle free.
Here are some handy tips on choosing your property management company:
What Do Property Management Companies Do:
- Day to day management – no matter how busy you are, or where you are, your investment property is always being looked after.
- Serve as liaisons between the tenant and you – all communications and issues are directed to the Property Management company who handle all queries.
- Source higher quality tenants – to reduce property wear and tear, improve rent collection, reduce problems and increase lease periods to reduce vacancy rates.
- Manage rent collection – facilitate the collection or rent and late fees where appropriate.
- Repair and maintain the property – facilitate specialized technicians to fix all ranges of repairs that may arise on the property.
- Handle the legal issues – keeping up to date on legislation or handling evictions or notices, property management companies are a blessing in this area.
How To Choose Your Property Management Company:
- Get recommendations from friends, colleagues, your attorney or CPA, or talk to us and fellow investors who are already successfully investing in income producing real estate.
- Define your goals or expectations for the property management company.
- Draw up a list of questions to go through, such as ‘What does your bonding and insurance cover’, ‘Is your staff bonded’, ‘How do you handle maintenance on the property’ etc.
- Find companies who are familiar with the local market.
- Interview a range of different property management companies and go through your list of questions.
- Get a list of references from your chosen company, and follow up on these.
- Negotiate a rate that you are comfortable with and work this cost into your investment return.
- Ensure follow ups and rental check payments are done quickly. Interest on rent should go into your account not the property management companies.
If you are not investing in income producing real estate with your IRA or 401(k), give us a call today, we can help you set up your Self Directed retirement plan and assist you with your real estate investing. For more information visit www.IRA123.com or call 877-229-9763.