Not everyone who gets into real estate investing plans to when they first purchase a home. Some people become landlords accidentally by purchasing a property and then later renting it out. Like in the case of Andrea, who accepted a job out of state and rather than sell her home for a loss, decided to rent it out. She partnered with a property management company to handle the complexities. Here’s her story of how she became an accidental landlord:
Andrea found herself living alone in a larger home once her friends began to start their own personal journeys and she wanted to make a change. When she accepted a job out of state, she recognized that she not only had a big life change coming up but that she also had some loose ends to tie up before taking off.
Selling her home right away was not in Andrea’s best interests. Keeping your home even after you’ve moved can be beneficial. For starters, when a tenant pays you rent, you can use that money to cover your monthly mortgage. However, a mortgage is not the only thing that needs covered: mortgage insurance premiums, property taxes, landlord insurance, and homeowner association fees. Your rental rate should include these monthly expenses as well.
“I had heard about home rentals, started to research, took a class, and decided to give it a try!” Andrea explained her thought process leading up to her decision to lease out her home. She found tenants that were willing to sign a three-year lease. Andrea started out managing her own property at first.
“Property management is unpredictable. It can be a challenge to juggle obligations when unexpected problems arise.“Andrea
Nonetheless, she was in a different state working a brand new job. Property management became less of a passive source of income and more like a second full-time job.
Andrea had heard from colleagues that there was a potential solution for her: hiring a property management company. They could take care of all the maintenance requests and any emergencies that might arise. All she would have to do is wait for the monthly rent check to hit her mailbox. She found Real Property Management Iowa by doing thorough research online. “RPM was by far the most responsive company,” Andrea said. The pricing structure was also similar to what she was comfortable with.
“I tried to manage the property on my own and started working with RPM mid-lease,” When asked if she would have done things differently, she responded: “Instead, I’d recommend working with RPM first to learn what property management entails to make a more educated decision about whether or not individual management is for you.”
No matter the circumstances, it is important to know that you have options on the table. If you are ever faced with a similar situation, consider the benefits of renting your property rather than selling. Becoming an accidental landlord and investing your assets in real estate can build wealth for you, and hiring a property management company can turn it into a passive source of income.