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Posted over 9 years ago

Book Review: Landlording on Autopilot by Mike Butler

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I have been reading some of the books featured on the Bigger Pockets podcasts lately.  Unlike Josh Dorkin, who gets stuck on page 27 of a book and never finishes, I read books very quickly.  (Just kidding Josh!)

The most recent book I went through was "Landlording on Autopilot" by Mike Butler.

Overall, I would say that it's a good book, and definitely helpful for the newbie landlord.  However, I did have some concerns while going through the book.

Issue #1 -- Don't account for a vacancy factor for SFH

In the very beginning of chapter 1, Mike writes "If you are investing in multifamily housing, apartment complexes, or commercial properties, you should include a vacancy factor for your market.  With single-family houses, I don't include a vacancy factor because I want my tenants to stay forever."

Okay, it's great to WANT your tenants to stay forever.  But how many people live their entire lives at one residence?  I'm of the opinion that you should always account for a vacancy factor, even if your tenant does stay multiple years.  I put money away every month (1/12 of the monthly rent amount) even though I generally have tenants stay for years and years.  (Well, so far my longest tenant is 3.5 years, but only because I've been landlording in Milwaukee for 3.5 years.)

What do you use that "vacancy" money for?  What happens if your tenant damages your unit when they are moving out?  If you've ever lifted a couch or a bed down a flight of stairs, you might know that accidents can happen.  You can take money out of their security deposit, but you do have to get a place rent-ready to accept new tenants as quickly as possible.  You can't always wait for a tenant to reimburse you. 

Secondly, it can take time to get a rental unit filled.  You have to advertise, have showings, screen tenants, etc.  Sometimes its possible to get a rental filled with 0% vacancy, but other times it takes a while to find that really great tenant. And that's what you want -- not to just put "anyone" in the rental unit but to get the best tenant possible.

Issue #2 -- Never call yourself a landlord

Ugh.  This is one of the "great debates" on Bigger Pockets.  Brandon and Ben even had contrasting arguments about this very topic.  Brandon was of the opinion you should just call yourself the "property manager" and this is Mike's opinion.  Ben believes you should be upfront.

My opinion is also that you should be upfront with your tenants.  Mike makes the argument that landlords are seen as having "deep pockets" and that landlords are evil.  This is not necessarily true.  A landlord is really seen as a negative connotation if the person doesn't fix things, harasses the tenants, or violate fair housing or other laws.

Mike advocates saying things like "I know the owner" or "I'm just the property manager".  Sure, it's "easier" to put the responsibility on an imaginary person, but really?  I thought we were adults.  Imaginary kids went away when we were 2 or 3, right?  As an adult, I don't need to hide behind an imaginary person to make the decisions for me.  I make them, then tell the tenants what my decision is.

So overall, I think this book is just a little outdated (it's copyright 2006 and still talks about pagers) but the bulk of it was good.  I just happen to disagree with a few things.



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