An investment in real estate is often talked about as a great way to diversify your portfolio. With a low correlation to the stock market, real estate could potentially continue to show strong returns even in a market decline.
But an investment in a real estate property is often a ton of work. Unlike buying shares of a stock which is almost instantaneous, purchasing an investment property can take months up front. And once you actually own the property, the real work begins! Finding a tenant, collecting late checks, and managing repairs are just a few of the barriers investors think about.
There just might be an easier way. Or maybe you already have a property. Perhaps you are purchasing a new home or downsizing to a smaller house. Or perhaps you are currently a landlord looking for some help.
Whatever the case, Knox Financial may be able to help you. In this Knox Financial review, we take a deep dive into the company striving to change the way investors think about real estate forever.
- Full property management company that handles all aspects of a rental unit
- 10% flat fee of rent received
- No other charges
- Complete hands off experience for landlords
- Services include rent collection, bill management, repair/maintenance management, tax assistance, and more
Knox Financial is more than a property manager. They are on a mission to make investing in real estate as easy as buying shares of a stock. Since its launch in 2019, the company has received strong reviews and results.
Knox Financial combines property management and data analytics in order to create income producing rental units.
The company was born after one of the founders of Knox sold his home shortly after moving. A year after selling the house, he noticed that the property had appreciated by $100,000. And just 4 years later, the new owners sold the property for $200,000 more than what he had sold it for.
David Friedman decided to launch Knox Financial in March of 2019 in Boston. The mission of the company was to create a way for homeowners to take advantage of a property even when moving, downsizing, or upgrading. But they didn't want to be another property manager.
"Knox is revolutionizing how smart landlords, homeowners, and retirees generate wealth, making owning income property an effortless, diversifying, and more profitable investment."
Knox transforms a home you own into an asset that produces true passive income. They perform all the work while the homeowner gets to benefit from quarterly distributions and potential appreciation of the property.
A typical property manager charges a landlord between 4-12% of rent collected. This number has a wide range due to the services offered, condition of the property, and the location.
Some property managers will notify you of necessary repairs and have you deal with them on your own or send you a bill after they handle it. They typically charge you one month's rent to fill a vacancy, which can actually encourage turnover. It is common for a typical property manager to also charge landlord's a larger fee during an eviction.
With Knox, the homeowner will not do anything for the property, unless they want to be more hands on. At Knox, the company handles all maintenance and repairs, bookkeeping, monthly bills, filling vacancies, showing the unit, and more. They also charge a flat fee of rents received without any additional charges to you. Take a look at this table highlighting the benefit of using Knox over a typical property manager.
Let's dive into how the company works and what they offer to the landlord.
If you decide to work with Knox, you will find a seamless experience. Signing up with the company is quick and easy. You will simply fill out a form that takes roughly two minutes. (You can also just sign up directly if you've decided to move forward.)
After submitting your form, Knox will create a customized property analysis. They will schedule a call with you to go over this analysis and answer any questions you may have. You are never obligated to actually sign up during this process. The call with one of Knox' experts is completely free to you.
Once you are signed up with Knox, they do all the heavy and light lifting. They will create a reserve account where all bills are paid from. This is also where rent checks are automatically received. They will handle all payments such as mortgage, insurance, taxes, and repairs. At the end of each quarter, whatever money is left above the reserve amount will be deposited in your bank account. The amount of money that is left in the reserve amount will depend on the property analysis that will be shared with you before ever signing up.
The landlord will never need to speak or work with the tenant. They will truly earn passive income while Knox takes care of the property.
So, what exactly are the features of working with Knox?
Knox charges a flat 10% of rent received. That is it. They don't charge to fill a vacancy. They don't bill you for repairs. And they don't charge for evictions.
By charging nothing more than a flat rate 10% of rent received, they are motivated to keep it occupied.
Property fees such as the mortgage, insurance, taxes, HOA/POA, etc, would be required regardless of using Knox or not. With Knox, you will still pay these bills, but Knox manages all the payments from the reserve account.
For repairs that cost more than $1,000, you will be notified. Otherwise, Knox will receive the call from a tenant, assess the situation, and schedule a repair, which will be paid for from the reserve account.
When you sign up with Knox, you will agree to working with them for one year. After the year expires, Knox requires a six month notice before terminating an agreement. This ensures a clean transition for the tenant and landlord.
In addition to creating a passive income stream, you can also benefit from potential appreciation when working with Knox.
Knox conducted a study that found interesting results to say the least. Had a house been put in the Knox program in 1998 and later sold in 2018, it would have yielded a 547% greater return than the S&P 500 during that same period.
While there are years where houses depreciate, over the long term, most properties do gain value. By holding your property with Knox, you can take advantage of potential appreciation and create a passive income opportunity in the short term.
Investing in real estate can be highly lucrative and a great way to diversify your portfolio. But it often comes with a heavy labor component. Unless you are investing through a crowdfunding platform, investing in real estate usually means owning and managing a property.
Many owners think about renting out a property when moving, upgrading, or downsizing. But the work associated with managing a rental can be a major deterrent.
With Knox Financial, property owners can truly earn passive income while Knox takes care of the unit. They find the tenant, chase down late payments, and handle all repairs. Unlike other property management companies, Knox doesn't charge any additional fees to fill a unit, perform an eviction, or fix something in the house.
This allows the homeowner to take advantage of any appreciation in addition to the passive income they will receive quarterly.
If you are interested in Knox Financial, be sure to browse their website and look through their FAQs. If you are moving in the near future and have thought about making your current home a rental, Knox could be the solution for you. Or if you are a current landlord looking to lighten your load, Knox could be able to help.