2million's Personal Finance Blog

My Journey to Financial Freedom


July 16, 2007

Management Company for Rental #1

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.

Similar Entries

Canceling the Management Company on Rental #1 (Sep 02, 2008) Some might consider this a step backwards, but for the short term I have decided to cancel the management company on Rental #1. I have no complaints about the management company. For 6% of rent collected they basically collected rent,...

ReRenting Rental #1 - The Rental Market Wasn't Good (Aug 29, 2008) The tenants moved out of Rental #1 less than 1 month after Rental #2. After re-renting Rental #2 in July I was starting to think that re-renting Rental #1 might not be too bad. After all we re-rented Rental #2...

ReRenting Rental #2 - The Market Was Suprisingly Strong (Aug 22, 2008) The 2nd rental house we have became vacant not too long ago. Not only was this the first time I needed to re-rent a house that was being rented, but we were overseas so we needed to orchestrate this remotely....

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.

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.

Post a comment

(Comment moderation enabled.)