Are you prepared for the combination of new factors threatening to diminish returns on leasing multi-family properties in Massachusetts?
There is no question that real estate has emerged as the most rewarding investment option of the moment, and that direct investment in leasing multi-family properties is one of the most profitable ways to go. Unfortunately changing trends, common misconceptions about investing in real estate and the very popularity which is drawing many into it threaten to deliver a serious financial blow to unprepared Mass. landlords.
Investing in Multi-Family Property Isn’t the Big Profit, Cake Walk You Think
Yes, acquiring and leasing multi-family real estate in Worcester, Shrewsbury and the surrounding areas can be incredibly rewarding in terms of passive income and long term wealth building but independent landlords ill prepped to keep up with those capitalizing on full service property management solutions might finding it a lot harder and less profitable than imagined.
3 major threats you need to be ready to handle:
1. Billion Dollar Private Equity Competition
The incredible demand for yields and income that only real estate is delivering is driving a storm of billion dollar private equity firms and hedge funds to scoop up all of the property they can. Because of their size and not needing to demand the high returns smaller players do these investors can pay more for properties and happily still rent them for less. It also helps that because of their volume they are able to command discounts on a variety of services from lawn care to electrical, plumbing and building maintenance contractors.
2. Competition for Tenants
With so many more properties now being converted to rentals investors face serious competition in attracting and retaining the best quality tenants. Private landlords may find it easier today to market their units online and conduct basic background checks but they are still fighting an uphill battle against those using full service property management companies who have established networks of new renters, access to better screening tools and can offer additional rent payment options and be a buffer for fraud and counterfeit cash and checks. Besides, when you think about it private landlords are disadvantaged from the start as it is generally those with the worst credit or intentions who look to them for housing.
3. The Legal Landscape
Even at the best of times investors can find themselves in legal hot water. Now with landlord-tenant laws evolving, new regulations and rules on multiple levels it is essential to remain on top of them, as well as having the experience and connections to get things done quickly, especially when it comes to evictions. Then there is the increase in malicious lawsuits being leveled at property owners due to continued softness in the economy, which means simply stepping on your own property without a witness, can land you in serious trouble. Sadly, just one false accusation could change your financial future and entire life for the worse overnight.
How to Boost and Bullet Proof Your Real Estate Returns
On the bright side there is an easy solution for securing high returns, shielding assets and income against frivolous lawsuits and ensuring the long term profitability of investment properties.
If you want to level the playing field and enjoy the advantages that big pocketed private equity firms do in terms of discounts, want better tenants and steadier income all you really need is to take advantage of the services of a local full service property management firm. The best will easily not only pay for themselves but actually increase net profits and cash flow.
Unfortunately some don’t get that these services are usually even tax deductible, meaning no net loss by using them, while offering far more freedom and time to actually enjoy profits instead of going blind trying make the numbers work.