Being a landlord can be quite time-consuming and can be more than a full-time job. However, there are many people that invest in real estate to make a passive income or even just some money on the side. It is actually possible to make passive income as a landlord so you can continue to work full time or retire and have extra retirement income.
If you want it to be passive you have to set things up to make it so. Otherwise, you can spend a lot more time than you really want taking care of the properties and running the business side of things. In this article, we will go over several of the things you need to do to set yourself up with a passive real estate business.
1 – Hire a property management company
Having a manager is something that every business needs. A real estate business is no different. If you want to be hands-off and focus on what it takes to grow your company then hiring one of the condominium property management companies in Toronto is crucial.
A company like this will be the ones that handle all the phone calls in the middle of the night to fix a leaky faucet or a short circuit. They will be the ones that call for a plumber or electrician to go and take care of the problem. They will also be the ones to pay for it out of the account that they have access to.
If you really want to have no contact with this side of your business then you can even have the company take care of finding and screening tenants and collecting the rent from them. You can essentially hire them to do as much or as little of the business as you like.
2 – Know your numbers
When you want to have a property that runs itself and provides you with passive income then you are going to have more expenses than if you do the work yourself. This is because you will need to pay a property management company to do the work for a fee. This is in addition to the other expenses such as the mortgage, insurance, taxes, and utilities.
It’s important to understand how much all of this is going to cost so you can see if a particular property is going to be worth it. Of course, it could be worth it to run at cost and not worry about a monthly income since you are building value in the property and can sell at a profit later.
3 – Buy more property
The more units you have available for rent, the more money you can make which makes it all worth it for passive income. If you are only making a few hundred per unit due to the expenses then buying a larger portfolio and having the management company run all of them will provide a better income on a monthly basis.