Whether you started as an out-of-state property owner with dreams of becoming a real estate investor or relocated and decided that renting your family home was a good move financially, you may be reconsidering or even regretting that decision now.
Life changes, priorities shift and if you are ready to throw in the towel, there is nothing wrong with that. When you start to dread maintenance calls or become anxious around the first of the month because you know your tenant is going to be late paying (again!), you need to start planning on how to move on. Here some things for you to consider, if you are over managing a property from a distance.
Problem: Do you know the condition of your property?
Being an out-of-state property owner has unique challenges, one being visibility. When is the last time you laid eyes on your property? If you don’t have boots on the ground to be your eyes when you can’t be there, you are operating in a danger zone by going through the landlording experience blindly. Now, at the end of your tenants lease, your property could be returned with more issues than you are equipped to solve. The roadmap for your property once there is significant damage could look like long term vacancy, loss of cash flow and inevitability having to sell the property at a significant loss.
Solution: Do not ignore or avoid the condition of your property. When we become overwhelmed, many of us try to detach so we don’t have to confront the issue ahead of us, which is a short term solution for a boiling issue. If you have an existing network in Ohio, start by leaning in on those who can assist you in conducting an assessment of the house. Schedule a walk-through of the property as soon as possible. If you believe there are some existing maintenance issues, invite a local contractor to come along during the walk-through, this way you can get idea of what repairs are necessary. Once you know the condition of the property, you can prepare for repairs, if needed.
If expenses are beyond your revenue or you simply don’t have the cash reserve to repair serious issues, it is time to weigh out the benefits of selling the house as-is and use the proceeds how you see fit.
Problem: Bad tenants
Landlords and tenants have a mutual and equal need for one another, and in a perfect world the experience is smooth and positive for both parties. But this isn’t always the case. If you do not have the proper financial safety in place, one bad tenant can cause many issues. You know the ones we all fear, the tenant whose rent always has an excuse for late rent, constant unwarranted complaints or unrealistic requests. These circumstances are hard for any landlord but particularly difficult when you are at a distance. Dealing with difficult tenants could mean you are required incur excessive legal fees to recover your income (if at all possible), disputes with other tenants and neighbors or local violations—all of which will make you want to pull your hair out.
Solution: Consider your current situation and evaluate the financial gain you are receiving from being a landlord. Many investing experts consider good cash flow to be $100–$200 per unit. Is that amount worth the stress of dealing with bad tenants or the time commitment necessary for property upkeep and tending to a good tenants? If you have a terrible tenant, eviction may be the quickest way to alleviate your headache. You’ll need to know Ohio and local laws or get in touch with an Ohio real estate attorney to determine if you have grounds for an eviction. Tenant issues are an inevitable part of being a landlord and if dealing with tenants is simply no longer for you, then selling the property may be your best bet!
Problem: You don’t have the time or room on your plate to keep up with property management.
If you were sold the dream that real estate investing was an entirely passive way to generate income, I am sorry to tell you that’s just not true, at least not if you are handling the landlord duties yourself. Being a quality, organized landlord requires your most precious asset, your time. Are comfortable with rearranging your daily schedule, if an emergency occurs? Do you mind spending time completing your due diligence, marketing an empty property, screening tenants, paying bills and taxes or price shopping to get the best deal when a maintenance request pops up? After you add up all of these efforts, being a landlord can suck up a decent portion of your time, so ask yourself how much time are willing to spend on this and is it worth it?
Solution: Consider working with a property management company. A property management company can help take some of the burden off of you as they will act as the middleman, handling your tenant and property issues. Sounds like the perfect solution, right? It could be for some but for others hiring a property managers isn’t in the cards financially. Most residential property management firms will charge between 8 – 12% of the monthly rental value of the property, plus expenses and miscellaneous fees. Depending on your financial situation this could be worth cutting into your cashflow. If you are entirely done with being a landlord and want out as soon as possible, you have other options. If your property is in good shape and needs light cosmetic updating, if any, you could reach out to an Ohio real estate agent. Listing your property on the market includes coordinating showing times with your tenant, putting money into updates as well as the agent fees, which are around six percent.
If working with an agent isn’t something you want to do, Buckeye State Property Group can help you get out of the responsibility of being a landlord. We can make sure you receive a fair price for your property and you can be confident about your decision to work with us. We’re here to help.
If you’re tired of being a landlord and feeling anxious about what do next, we can help you—even if your property is not great condition. You don’t have to be stuck being a landlord and you don’t have to a significant loss either, with the help of Buckeye State Property Group.