The Pros and Cons of Owning Multiple Rental PropertiesReturn to Blog
Categories: Planning Property Management Real Estate Residents
Being a rental property owner is something many strive for in their lives. Most of the time, financial advisors recommend owning a rental home is a great investment strategy in building wealth. But, “with great power comes great responsibility,” as you’ll always be required to adhere to the ever-changing local and statewide housing policies and laws. Owning multiple rental properties only ups the stakes, and as with anything else, there are plenty of pros and cons — but that’s where hiring a Property Management company plays a role; we’ll get into that throughout this article too.
Related: How to Hire a Property Manager (Webinar)
Having multiple rental properties has plenty of upsides. By owning multiple properties, you can create various streams of consistent income, attract business opportunities, and more, let’s dive a bit deeper into these advantages.
- It’s always good to have a passive income: If you own multiple rental properties and can keep them occupied, not only will you have a steady and secure amount in your bank account, but you’ll also have a passive income, which is certainly always welcome.
- A possible business opportunity: A great thing about owning multiple rental properties is that you don’t have to sell only to tenants looking for housing. If your property is in a desirable location, you could always rent it out to business owners or sell it to community developers, making your property a great investment opportunity.
- Living out your dreams: If you’re someone who’s always wanted to buy a fixer-upper, this is a great way to do it! Provided that you already own multiple rental properties and that you’re financially stable, this could be a chance to play around a bit and mix business and pleasure in the best way possible.
You’ll always hear mixed opinions about the types of rental properties you should own to maximize your ROI. But investing in a Mix of Single-Family and Multi-Family Rental Properties will always be recommended since there are many neighborhoods where these homes are in high demand. Tenants are willing to pay higher rents for space and privacy that come with single-family homes. While multi-family properties often help you earn more with your rental investments and survive the occasionally lengthy tenant turn process.
Of course, if you’re seriously thinking about owning multiple rental properties, you have to look at both sides to have an objective overview and figure out what is best for you. Many property owners manage their properties and find joy in the inevitable and continuous tasks to keep their investment(s) afloat. Meanwhile, many property owners elect to enjoy their free time to pursue passions and grow their wealth in ways outside their properties by paying property management companies to handle up to 90% of the work. Here are a bit more details on what you can expect to deal with by owning multiple properties.
- Expect to (always) have something to tend to: Although being a property owner grants you an alternate route to building wealth and finding free time, owning multiple rental properties is still a challenge. Having tenants in one rental property is hard work. Having more rental properties asks for a ton of energy and focus. Like it or not, being a landlord takes a lot of hard work and dedication due to you being primarily responsible for any damage or issue that occurs in the home.
- Lacking experience in some fields: As you may not be doing this as your primary profession, there’s a lot that may not be familiar to you — and that could cause some problems. Something you can do to decrease the number of inevitable mistakes is to have someone experienced to consult. (like Darryl Glass with Advent Properties, Inc.)
- Misbehaving tenants: Although you’ll make sure that your contract is updated and legally binding, there’s a chance that your tenants might not turn out to be as great as they seemed at first. That can happen to anybody, and it is solvable, but it’s a dreadful experience nonetheless. Just make sure to have a real estate attorney like Advent Properties’ William Lynn by your side if anything arises.
- Destruction of property: As the worst outcome of them all, there’s a chance that your property could get seriously damaged before you’ve had the opportunity to see the cause and how to stop it. The best thing to do here is not to stress too much about it. If your contract is complete in the right way, your insurance will cover anything that might’ve gone wrong.
Owning multiple rental properties will take up more than enough energy, but having a team of experts oversee everything is the best way to lessen the burden on your shoulders. That’s why hundreds of property owners seek our services!
Now that you’ve seen the pros and cons of owning multiple properties, you can make a clear decision as to why this is something you may or may not take on. But the good news is that our team of property management experts are one phone call away from making your decision easier.
Call us today at (510) 250-7918 ext 2 to speak with Darryl Glass about your property buying, selling, or management needs! You can also schedule a 15-minute introductory call anytime that is convenient for you.