Time Commitment to be a Real Estate Investor?
Investing in real estate can be an easy way to earn some passive income. However, there are many aspects of the real estate business that you must consider before diving into the role. The amount of time you have to dedicate to your properties are dependent on several factors.
Multiple Investment Properties
Most real estate investors own multiple investment properties. It is obvious that the more properties you invest in, the more time you will need to manage them. However, in most cases, such investors choose to delegate their responsibilities by hiring a property manager.
Property managers are experienced and trained regarding every aspect of the business and can significantly free you of giving in time and energy towards your properties.
Real estate investors spend a significant portion of their time managing their tenants. They are subject to several responsibilities like handling tenant requests, supervising repairs, and maintenance of the property, collecting rental payments, and managing tenant turnovers as well.
Usually, tenants may choose to end the lease term and leave your property vacant. In this case, you will have to invest time and money in advertising your property, screening potential renters, showing them the property, and then settling a contract with the right candidate.
Although the tenant search may be time-consuming, once it is completed, there will generally be a sharp decrease in your involvement. Being a good real estate manager will require you to be responsive to your tenant’s complaints and inquiries about different issues. This also establishes a good relationship between the landlord and the tenant.
Another responsibility that you might have to undertake is to conduct walkthroughs of your investment properties at least twice in a year. These walkthroughs may not be time-consuming, but it gives you an idea to record any maintenance issues in the property and how well the tenant is abiding by their responsibilities.
It is important to factor in the condition of your property. If you are renting an older home, you will have to spend significant time and resources to make the place presentable before you can put it up for rent.
Attracting the right tenants is no easy process. You must carefully do your research and create a plan of how to make the property more attractive. However, if you have a brand-new property, these things will need much less attention, and you will save considerable time and money on home improvements.
What makes the most difference in the amount of time it takes to be a real investor is how you plan to manage your properties. The question you need to ask yourself is, are you planning to self-manage your real estate, or will you take a more passive approach and let someone else handle the work for you. Moreover, are you looking to earn some extra income on the side, or are you planning to own multiple properties and start a whole business?
If you are the type of investor that wants to do it all yourself and reduce your costs by cutting out the middlemen, then you will have to take on several responsibilities. Such investors usually have some type of previous experiences like construction or contracting background, which can significantly help them during the home improvement or repair processes.
Others prefer to hire professionals for such activities and engage themselves in managing their tenants. Using this approach can only be feasible if you are more concerned about your money rather than your time. After all, it will become a full-time job to take care of all activities yourself without hiring any employees.
On the contrary, some investors take a more passive approach. They are not interested in the daily grind that the job requires and are usually looking to invest in property as a side business. These investors typically have enough money on hand to hire a property management company so that they don’t have to stress about daily activities.
Such investors often contribute very little time towards being a real estate investor and simply enjoy the benefits of the incoming cash flows. However, they are responsible for overlooking the financial aspects of investment properties such as mortgage payments and building insurances.
However, even passive investors will have to put in some additional time as their portfolio grows, and they acquire more properties.