With signs of uncertainty in the market, analyzing your next (or current) real estate investment should be the top priority. Jumping into the unknown and hoping for the best is risky business and not recommended for real estate investments.
For those investors that like to have some certainty in their portfolio, being a member of a rental pool is the way to go!
A rental pool is a group of investor owners who agree to combine rental revenue from all their units and share the expenses of all units. Rental pools help ensure owners a monthly payment regardless of turnovers, market fluctuations, or other unknowns.
However, the decision to join or create a rental pool should not be taken lightly. There are benefits and drawbacks that must be considered before a decision is made.
The benefits of condo rental pools are safety in numbers. There are never huge losses because the losses and profits are split between all of the members.
Being a member gives you more of a hands-off approach to managing your property. Rental pools can hire property managers that take care of all of the nitty-gritty for you. Giving you more time to relax and watch your investment portfolio grow.
Having the units in the pool under a shared set of accounting records makes them easier to manage. These saved costs are passed on to the condo owner. You are also able to gain returns on administration charges, shared banking fees, and advertising costs.
The required monthly fixed costs that rental pools pay are also split between the members. These include condo fees and management fees. The rental pool pays the condo fees on behalf of the owner.
Other costs could include unit maintenance and repairs, appliance repairs or replacements, and aesthetics. All of these potential costs are split between the members of the pool. The rental pool does not cover the mortgage, homeowners insurance premiums or property taxes.
There are significant advantages of utilizing a condominium rental pool in your building. The only challenge is finding the time, or a reliable company to manage it.
A professional property management company can be retained to help your condominium rental pool seamlessly manage all the units in the pool.
A professional property management company will help with the following:
- Gather rent
- Maintain the units
- Pay unit expenses
- Distribute the remaining income to the condo owners
As a property management company, Braden Equities Inc. can help your condominium rental pool operate efficiently. Braden Equities Inc. offers a full-service rental pool management program.
The main advantage of hiring a professional property management company for your condo is having a single point of contact between owners and renters. There tends to be a greater enforcement of condo rules and regulations when using a professional property management company.
The property management company representative will be paid a monthly fee for management and administration of the common property for the rental pool owners.
To ensure proper accounting, the condominium rental pool management company will prepare or have prepared annual financial statements. Also, the property management company representative is required to attend all regular meetings of the strata corporation and the strata council.
This type of investment ensures owners a monthly income regardless of turnovers, economic factors, and other variables. Rental pools are great when the market is low and vacancy rates are high. Braden Equities Inc. can help you manage your condominium rental pool.