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I have been trying to figure out how to handle both rental houses while I am away on assignment. I believe I am ok on Rental #2 (the house I just converted to a rental property) - I made sure the tenants recognized that I wouldn't be available to handle issues and feel much more comfortable about the situation with that house. However with the tenants in Rental #1 they are used to a level of service I have provided and I never "negotiated" the lack of maintenance support into the rental agreement. I feel like this property has to be much more "actively" managed.
I have hired a property management company to handle Rental #1 while I am on assignment. It was the least expensive management service I could at 6% of gross rent with no other fees other than maintenance costs. I signed a 1-yr management agreement with the company.
I am taking a huge hit on my positive cash flow and the maintenance expenses will likely be more significant because I can't DIY it. This may turn a pretty good investment into a lousy investment for awhile, but its a tradeoff I need to make for work that I should be able to offset with other company assignment benefits.
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Comments (2)
Although the investment isn't as good as it could be while you're away on assignment its still an investment and then there's the possibility of property value increase. Overall even though you're paying someone to look after it, it's still going to generate income and cashflow. If you add more properties to your portfolio you'll eventually get to the point where you can't DIY anymore.
Posted by Matt | July 16, 2007 7:25 AM
The property value increase over time is typically where home investors look to evaluate the investment. If that home cash flows at all while renting, you are doing great.
Posted by Bruce Swedal | July 25, 2007 9:37 AM