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The ideal way to make money is to sit back and do absolutely nothing while your income steadily rises. “Passive income” refers to income that requires minimal labor to earn and maintain cash flow. Many real estate investors utilize property management companies to help create passive income.
However, there are other ways to make passive income. Making money from things like album or book sales is another form of passive income. However, it requires a whole set of artistic and business skills that few are blessed to have. Stick dividends and renting out property are other common forms of passive income many investors use.
Property management companies offer a turnkey experience to property owners and investors. These management companies are the closest thing possible to sitting back and making money. Please keep reading to learn more about how these companies work.
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1. Meticulous Tenant Selection
How can a landlord tell that a prospective tenant will be a good fit? Many landlords are hesitant to rent because they are afraid of renting to an irresponsible tenant. However, here’s where property management companies step in and save the day. In order to avoid irresponsible tenants, look for a rental agency in Toronto offering a comprehensive tenant selection process. So, you can feel reassured that the person living in your property will treat it with respect.
The best property management companies have a multi-step process that includes the following from all tenants:
- Employment Letter: This verifies that the person works where they say they do and gives a picture of their income, so you know they can pay the rent comfortably.
- Credit Bureau and Credit Report Check: How a prospective tenant treats their other financial obligations tells you about how they’ll treat yours.
- Reference Check: Understanding the character of your tenant is crucial, so it’s necessary to speak to friends, family, and, most importantly, past landlords. This may involve phone tag, but it’s too important to neglect.
- Tenant Application: The company screens the completed applications for the best candidates and gives landlords final approval without requiring a reason or explanation.
Landlords need to know that tenants will be clean, pay promptly, and diligent about reporting repairs. Property management companies make that easy for property owners and investors.
2. 24/7 Property Management Support
All landlords worry that they could get pulled away from their personal or professional obligations at any given time if there’s an emergency in their rental property, like a plumbing leak or a fire. The disruption could be early in the morning, late at night, or on the weekend or holidays. “These days dealing with a range of issues can be done on a smartphone, even if you’re several hundred miles away!” comments James Durr of Property Solvers, a UK home buying firm.
Property management companies are there to give tenants support 24 hours a day, seven days a week. Prompt, professional help makes them feel like their needs are attended to and gives landlords back their spare time.
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3. Tenant Relations
Landlords are happiest when tenants remain in their unit long-term, so there’s reliability and no disruption to their monthly payments. The best property management companies handle the heavy lifting for landlords, taking on rent collection, maintenance requests, and more.
When a renter is happy in their home, landlords get reassurance and consistency each month.
The goal for all landlords is to develop passive income. Property management companies streamline this process. With their experience and dedication helping you and your tenant alike, you’ll be able to sit back and do nothing as the money pours into your bank account at the start of each month.
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