Now that you have begun your business to build a portfolio of investment properties you need to build a team to support you.

One of the members of your team should be a property management company. They can help you with a number of issues and situations with the management of different properties.

These questions will give you some insight and guidance into whether a property management company is a good option for you.

The alternative to having a property management company is that you have to personally manage the properties yourself.

Here is what you should think about:

Do you live near your rental property or properties?

Where is your personal residence in relation to your investment properties.  

If you don’t live near your properties then you may be better off hiring a company that’s closer to your properties.

You should take into consideration your commute between your personal property and the investment property and how much this would cost you in time and actual costs.

Do you have a single property or many?

The more investment properties you own the more time you will need to allocate to maintaining and travelling between them.

The more investment properties you own, the more you have to benefit from hiring a property management group that can service all of them, or at least the ones located further away from you

How busy is your current schedule?

Do you have time to tend to the property?

What do you charge in your day job?

Is it worth spending your own time on maintenance and administrative tasks?

Does it make sense for you to be allocating your time to your investment properties?

If you can spend your time being paid a higher amount than the returns offered by your efforts on an investment property, then it is likely a good idea to hire someone to do this for you.

Are you able to afford these property management services?

The cost of the property management is an important factor.

You should always consider whether you can actually afford these services.

Better yet, if your rental income on the unit can cover these ongoing expenses then at least you won’t have to dip into your own pockets to cover these additional costs.

Are you looking for active or passive management?

Do you want to take on the role and responsibilities of a landlord, including evictions and other responsibilities.

Property management companies often provide a complete package, from finding and screening tenants, to pursuing any necessary evictions.

Depending on how involved you want to be with the property, hiring a property management company could save you a lot of time and headaches.

Would it make more sense to hire a resident manager or outsource to an independent contracting property management company?

If you decide to hire a resident manager, then you will officially become an employer and will be tied to the additional work that comes with it.

On the other hand, your property management fees are simply an expense with little paperwork beyond the initial contract.

The latter will likely be more expensive so you should take that into account.

Are you part of an affordable housing program?

These government-assisted programs have been known to hold property owners to very high standards.

Since this is government regulated, it can be beneficial to let the experts handle your property maintenance to reduce any potential headaches.

If your housing is part of a government assisted program, you should determine if you you can include the cost of property maintenance into your budget when applying for grants.

Can you balance your current task load or are things starting to pile up? 

An immediate sign that help is needed is if you find that your list of errands is starting to grow uncontrollably.

Of course this depends on whether you have been busy spending your time on other tasks that need to be done, not just sitting around.

Consider your past experience as a landlord.

If you’re new to the whole landlord business, then it may make sense to let an experienced individual handle the reins.

Are you comfortable allocating control to a third party?

It goes without saying that you must be very comfortable releasing control of your operation since property management companies typically provide the full-service bundle.

This makes the most sense for those seeking a passive investment in terms of you doing everything.

What is the state of your current operations?

Given that property management companies are skilled at what they do (or at least should be), they can help to improve your current business operations––from improving tenancy rates, to rental prices, and more.

These 11 Reasons will help you determine if you should utilise an property management company to manage your investment properties

Are you looking to succeed in the area of real estate investment?

Well, there are some things you should know before getting started.

Despite what some people may think, real estate investing isn’t necessarily a hands-off approach to investing. Although it can be depending on which type of venture you decide to pursue.

These generally involve some level of work on a day-to-day basis

Everything worthwhile takes time.

Like all investments, you should never expect to get rich quick.

Hard work and perseverance are the necessary ingredients in order to reap the rewards of your efforts.

There are strategies to help you speed up your income growth but, you should never expect to reach the status of the rich and famous overnight.

Do your research and always be informed

Part of what takes time is accumulating the necessary knowledge and staying on top of market trends.

It can be very frustrating dealing with a professional that is uninformed and is unable to answer certain questions.

To avoid this, you will want to stay on top of market trends and know the local area – particularly where your investment properties are located.

This will be extremely helpful when it comes to dealing with clients. Beyond the customer service side of the business, it will also help you identify worthwhile opportunities versus those that are fruitless.

Assess the involved risk before signing anything.

An adequate assessment of risk typically follows an intensive research process. This goes back to a basic discussion about the risk and return tradeoff.

If a project seems to yield exceptionally high returns, then you should carefully consider the amount of risk involved. Even for opportunities presenting reasonable returns, you should make sure the level of risk aligns with it.

Always take time to assess the level of risk associated with the likelihood of your project materializing as it should.

Transparency and honesty will never lead you astray

Real estate is a reputation game and a trusted name for yourself can lead to priceless referrals.

Why jeopardize any long-term opportunities by tarnishing your reputation due to shady business tactics?

Typically, you can trust your gut instinct and personal values when it comes to being forthright with your clients. In cases where you are still unsure, it never hurts to consult with an outside perspective.

Use technology to its fullest advantage.

Time is valuable and technology can help you spend it much more efficiently. Not to mention that if you aren’t already using social media or other resources, your competitors are.

It’s in your best interest to stay in the loop

Develop a network of people you can reach out to.

Having access to the support you need is critical to the success of any business – especially real estate.

So why start from scratch when you can establish a network of professionals that you can turn to?

You should seek to include networks of potential buyers and sellers, as well as other professionals (i.e., legal, title companies, construction, etc.).

An effective approach is to seek individuals you can form a mutually beneficial relationship with.

Never be afraid to ask for expert advice.

It takes time to learn all aspects of the real estate industry in great detail.

And even then, you will probably still have so much to learn. Don’t hesitate to leverage the knowledge of those around you.

You can turn to professionals in times of need and uncertainty. If you follow the previous suggestion and build a network, there will always be someone you can turn to for professional advice.

Hone in on your style and perfect your skill.

With so many options surrounding different types of real estate investing, it’s like any other skill.

That is, we recommend finding your niche and focusing on that particular type of project.

Rather than trying to learn the ins and outs of a variety of investing styles, focus on one in particular before you move on. Not to say that you can’t experiment with other types of investments, but we recommend that you master one before diving into another.

Have a plan and nothing less.

Our advice is to make sure that your plan isn’t just to wing it.

A wise man by the name of Benjamin Franklin once said, “Failing to plan is planning to fail.”

Don’t be afraid to ask for referrals.

After all of the footwork you’ve done to land a client, why not take full advantage of the time you’ve invested?

Whether you’re buying or selling, it never hurts to try and tap into your clients’ networks by asking for a referral.

This can save you some time in the future and ultimately help to streamline the process of landing another client.

Also keep in mind that referred leads have generally already heard good things about you.

By following these tips you should have a strong foundation on which you can build your property portfolio

Before deciding to buy real estate as part of your investment portfolio you need to be clear on what your overall strategy is for your real estate portfolio.

This is will allow you to be clear on what type of property you will purchase:

Will it be buy and hold, flip, renovate etc.

You make money when you buy, not when you sell. Never forget that.

To rephrase that a little bit: You need to have an exit strategy in mind before you actually buy the property.

And if you do not have multiple exit strategies in mind before you purchase the property, you can get yourself into a bit of a pickle.

Time is money, and if you are holding onto an asset, you are cash-strapped because all of your capital is in that asset.

You might not hypothetically be losing money right then and there, but you are losing opportunity cost. You don’t want to be sitting on the sidelines doing nothing.

1. Selling Your Property to a Homeowner

The first strategy is to ensure the property that you are buying fits a homeowner criteria.

Make sure that you conduct due diligence on that particular area.

Make sure that there is high homeowner activity in that area.

Make sure that properties are selling at a quick pace.

Make sure that you renovate this particular property to the same standard as the comparable sales, and price it a little below to get that quick sale.

Use this when you’re doing your first deal, your 10th deal, or your 100th deal.

2. Selling Your Property to an Investor

The second exit strategy that you need to have in mind is selling it to an investor.

How do you find an area where you can sell to a homeowner and sell it to an investor at the same time?

There are areas that are 50 percent investor-owned, 50 percent owner-occupied.

There are areas that support an investor demand and a homeowner demand. They are everywhere.

Now, when you are selling a property to an investor, the numbers need to make sense. Investors base their decision on the numbers in the deal, not emotions like a homeowner does.

Make sure you are delivering that property at a good cap rate. It should most likely be tenanted, and it has to have good property management in place.

An investor needs to know what it takes to manage the investment property.

So when you’re selling or you’re looking at exit strategy, have reputable, legitimate property management lined up.

Then you can possibly sell that property to an investor if the homeowner aspect of it does not work out.

3. Refinancing

If you can’t sell to a homeowner, and you can’t sell to an investor. You should ask yourself what you’re doing wrong, then you should refinance.

Is your financing in check, can you get a loan, and can you refinance out of that property?

When you refinance, you need to make sure that your monthly rent is covering all of your expenses. Underestimate your income and overestimate your expenses when you’re doing deal projections.

If those make sense, then you should be able to refinance that particular purchase. But you have to make sure that you have all of these things in order before you actually go into a deal.

You cannot build anything substantial on your own. You need to leverage the knowledge,
experience and skill of a number of people

One reason is because you can’t know everything. You need to learn and utilise the experience
and knowledge of other people.

Time is another reason. You do not have the time to do everything. You cannot replace time.

Once it is gone it is gone. You can get so much more done by utilising the time of other people
to help you build your property portfolio.

An effective and efficient team will support you to make better investment decisions and provide valuable support that is required with any business venture.