Real estate investing can be lucrative, but it can also be time-consuming. If you buy a rental property in decent shape and have respectable tenants, you should hypothetically be able to collect rent checks in excess of your monthly mortgage payments and other expenses—hands-free. However, any property manager will tell you that idyllic scenario doesn’t reflect reality.
The truth is, you’ll need to deal with repair requests, late checks, and countless other property issues. You may go months without a problem, but face certain weeks of never-ending issues, and the problem will only grow in intensity with each new property you add to your portfolio.
So what if you already have a full-time job or other responsibilities that limit your free time? Is real estate investing out of the question?
5 Tips for Investing in Real Estate When You Don’t Have Much Time
Fortunately, there are some strategies you can use to reduce the time it takes to actively manage your properties:
1. Let someone else do the inspection.
Taking the time to walk through every property you want to view can be a major hassle. Depending on how far away from the property you are, you’ll likely take at least a few hours out of your day for a basic walkthrough—so what if you could have someone else do it for you?
Related: 3 Steps to Create a System for Bringing in Real Estate Leads While Working Full-Time
Services like WeGoLook allow you to hire someone to remotely inspect your prospective properties for as little as $69. You’ll get a full report of the property’s condition, including both interior and exterior photos, and you’ll never have to leave your home or office. This is especially important if you’re considering investing in properties in another state.
2. Hire a property management service.
If you want to remain as hands-off as possible, it’s in your best interest to hire a property manager or full property management service. This person or organization will take care of almost all your landlord responsibilities, including screening your tenants, collecting rent, responding to and addressing any maintenance problems with the property, and, if necessary, managing the eviction process. The only downside is that you’ll need to pay for the service, which will ultimately limit your profitability, but if your time is a bigger concern, it’s a worthwhile investment. Make sure you do your research before finalizing your decision—not all property management services are the same.
3. Invest in real estate that requires little upgrading or maintenance.
Depending on the state of your property, you’ll need to budget about 1 to 3 percent of your home’s value for repairs and maintenance costs. However, you can mitigate those annual expenditures (and the time investment that goes along with making them) by choosing to invest in properties that require little to no maintenance. These are generally newer properties (built within the last decade) that have been kept in good shape by their owners.
4. Proactively screen your tenants.
Taking the time to screen your tenants may seem like an unnecessary time investment and one that prevents you from collecting rent as soon as possible, but it’s more than worth the proactive measure. Finding good tenants increases the consistency and reliability of your rent payments, reduces the chances of property damage, and mitigates your risk of needing to file an eviction. In this case, an ounce of prevention is worth more than a pound of cure.
5. Employ as much automation as possible.
If you aren’t using a property management service that already automates the bulk of your landlord responsibilities, make good use of an online service like Cozy, which allows you to collect rent payments online for free. You may also automate repair and maintenance requests via a website and a form your tenants can fill out at any time.
Balancing Time and Money
It’s certainly possible to manage a real estate investment portfolio when you don’t have much time to spare, but you may have to make other sacrifices. Most of the strategies on this list will cost you some extra money, which may dampen your overall profitability. Accordingly, your decisions here will ultimately come down to how you want to balance the time and monetary demands of your investment.
How do you invest when you’re short on time?
Let me know your experiences with a comment!
by Larry Alton | BiggerPockets.com