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BP Podcast 062: Managing Tenants For Maximum Profit & Minimal Stress with Phil Dwyer

by Brandon Turner on March 20, 2014 · 24 comments

  
BiggerPockets Show 62 Managing Tenants

Managing tenants can be a real pain.

Trust me.

However, on this episode of the BiggerPockets Podcast we sit down with a full time property manager to talk about the business of managing tenants – and discover ways to make it easier and more profitable for YOU.

Today Phil Dwyer from the Las Vegas area shares with us his story of becoming a real estate appraiser and transitioning to a successful property manager. In addition, we also discuss the best strategies for finding and managing the best property managers.

If you have any rental properties – or ever plan to – this is a “don’t miss” episode!

Listen to The Show on iTunes

Click here to listen on iTunes.

Listen to the Podcast Here

In This Show, We Cover:BiggerPockets Podcast _ Real Estate Investing and Wealth Building 9.42.11 AM

  • Dealing with FHA buyers
  • Where to buy – appreciating areas vs. declining areas
  • Finding a great property manager
  • Why Phil chose Vegas to build his business
  • Getting started by working a job in real estate
  •  The most difficult part of investment property management?
  • How to know if you are getting ripped off from your management company.
  • The #1 best way to know how your tenant will act for you
  • What Would You Do” questions for Phil
  • Red flags for tenants
  • Dealing with pets in a rental
  • Single family vs. Multifamily Investments
  • What property management software Phil uses
  • And so much more!

 Links from the Show

Books Mentioned in the Show

Connect with Phillip

Email *
  



{ 24 comments… read them below or add one }

Brad Boone March 20, 2014 at 5:20 am

Don’t call the current landlord call the one prior to current, that landlord will tell you the truth. Some tenants might get favorable screening from current landlord to get rid of them.

I hired a PM and have all maintenance requests sent to me so I can do the work or hire it done or have them do it.

No second chances with evictions they screwed them they will me too.
Great show…as always

Reply

Phillip Dwyer March 20, 2014 at 3:54 pm

Hi Brad,
Thanks for listening. I had a great time on the show with Brandon and Josh. I agree with you about the rental history verification. The current landlord might be happy to be rid of a pain in the neck.

Reply

Tom Keith March 20, 2014 at 5:12 pm

Hey guys. Enjoyed the show, good interview and response from Phill
I would hope to someday have out of area rentals in Nevada, will look
You up. Peace

Reply

Phillip Dwyer March 20, 2014 at 8:21 pm

Hi Tom,
Glad you enjoyed the show. There are a lot of good real estate pros on the sight from Nevada. I host a monthly meetup, so feel free to pop in if you’re in town at the same time.

Cheers!

Reply

Gerald K. March 20, 2014 at 10:56 pm

Another great Podcast guys. Phil, thanks for sharing your property management expertise with us. Having rules, sticking with them, makes things a lot easier. You don’t have to evaluate each and every situation – just follow the process. Brandon, totally relate to the late tenant and the problems that occur when you bend your rules. When you got your text from your wife that the tenant just paid, felt like deja vu! And yes! next time post your 3-day notice according to your process. Listen to the stories but follow your process anyway. Great job all!

Reply

Hugh March 24, 2014 at 7:25 am

Great show, Thanks!
I agree you should have standards and apply them strictly. What do you think about offering a non-paying tenant cash (maybe a month’s rent?) to be out by the end of the month? I know, I know, they owe *you* money, but the advantage is this: the tenant has strong incentive to be gone by the end of the month, you incur no further expenses or hassle trying to collect, and with any luck, this arrangement makes it less likely they will pour cement down your toilet. On the other hand, and it may depend on the local laws, but I doubt you could count these advantages if the tenant takes you the full eviction route. Bottom line: you may lose more money going with eviction than offering an incentive to the tenants. What’s your experience here?

Reply

Phillip Dwyer March 24, 2014 at 10:32 am

Hugh,

I haven’t tried this personally, but I have friends that have went this route in the Detroit market. The offer was contingent upon the house being completely clean.
You can never have too many tools in the tool belt. This looks like one more creative way to minimize risk and cost. Though, it should be weighted against the other options.

Thanks for listening to the show and for sharing this idea!

Reply

brian March 24, 2014 at 11:04 am

If tenants ask for leniency I just say I would love to help you out but I am regulated by a lot of laws and have to apply the same standards to every tenant or I could get in trouble. Tenant usually understands after that.

Reply

Phillip Dwyer March 24, 2014 at 11:25 am

Brian,
That’s typically how I handle these types of conversations. I give the same response during the tenant screening process.

Thanks for sharing!

Reply

Darren Sager March 25, 2014 at 7:35 am

Great Podcast guys! I think its very smart in what Phil’s done in gaining the experience ahead of time which will help him become a very successful real estate investor. Hope you take the plunge soon!

Reply

Phillip Dwyer March 25, 2014 at 11:47 am

Hi Darren,

Thanks for the positive feedback. I learn more each day I’m in the game.

Reply

Brett Synicky March 25, 2014 at 7:59 pm

Hi Phil. Great show guys! Phil you said something during the show that caught my attention and I was hoping you could explain a bit more. You mentioned that prices in the Vegas area have increased but rents haven’t and that concerns you. Can you explain why you think that is? As an owner in Vegas I have seen my rents go down over the past couple years as well but the value go way up! What’s up with that?!

Thanks again!

Reply

Phillip Dwyer March 26, 2014 at 9:27 am

Hi Brett,

Thanks for listening to the show! The answer to your questions involves supply and demand. On the sales side, active inventory on MLS has been in a shortage situation for well over a year and a half, but demand remained strong leading to price increases. At one point there was less than a 1-month supply. Inventory has increased since then to just under a 3-month supply which is still considered a shortage. This doesn’t include new construction inventory or sales which could change the numbers some. Lot’s of new construction is going on, so locals are watching to see how this plays out.
Meanwhile, on the rental side of things, many of the homes that were purchased over the past 4 years have been converted to rental property. For a while after the market crash, we had lots of people leaving the city to find construction employment elsewhere. Rental rates declined. 2013 saw some increases in rental rates, as people began to move back to town and employment improved. Rate changes seem to have flatlined for now, but I haven’t checked the trends for a few months.
There are certainly many other factors that play into all of this on both a micro and macro level, but that’s the basics.

Reply

Abel Vazquez March 27, 2014 at 9:06 pm

Great show I really enjoyed listening to it. I liked the tip from Phillip when he said to leave your card with the neighbors to in case they see something unusual I would of not throught of that its a simple idea that can help in many ways. Anyways great show again and thank you guys for the great information.

Abel

Reply

Joshua Dorkin March 27, 2014 at 9:22 pm

Thanks for listening and for the feedback, Abel.

Reply

Phillip Dwyer March 31, 2014 at 11:02 am

Thanks for listening Abel! The card passing idea works great in high demand areas. People often have friends that want to live near them, so this tactic has helped me fill vacancies quickly.

Reply

Kathlyn March 28, 2014 at 11:55 am

Just listening to the podcast and this is kind of a “duh!” comment but Brandon’s “follow your rules” tip is a really good one, no matter what you’re dealing with. We inherited a tenant who didn’t pay her rent on time the very first month we owned the building. We are totally new to this game and my inclination would have been to give her a little grace. My husband put his foot down and filed a 3 day notice, after telling the tenant that this would be the consequence of non-payment. When we posted the notice, her reaction was “woah – I didn’t think you would do that!” and she payed before eviction. She has since paid every month, before the 1st (we’ll see what happens this month). SO glad we stuck to the rules!!

Reply

Phillip Dwyer March 31, 2014 at 11:03 am

Hi Kathlyn,
Thanks for sharing. Setting up expectations early works best. Your story proves it.

Reply

Shera March 31, 2014 at 10:37 am

I like the idea of asking (legal) questions over the phone to weed out some people who would not meet my criteria for income vs rent. I generally use Craigslist to post my rentals plus putting a sign in the yard with flyers. What do you think about including in the ad and/or the flyer the requirement that “household income exceeds 3 times rent”?

Reply

Phillip Dwyer March 31, 2014 at 11:00 am

Hi Shera,
I think that’s a great idea. No need to waste time showing the property to someone that doesn’t have the ability to pay.

Reply

george p. April 7, 2014 at 12:46 pm

i have a question for phil.

i am buying a DISTRESSED property (in Livonia) and the taxes are very high – ~3k. Assessed/Taxable value is 50k. should i get an appraisal before rehab starts or after?

Reply

Phillip Dwyer April 7, 2014 at 12:52 pm

Hi George,
I’m not sure how the property assessment dispute process works in Livonia. However, I’m guessing that it’s your intention to dispute. That said, it would likely make more sense to do so prior to completing any renovations.

Reply

Sharon Tzib May 10, 2014 at 1:20 pm

Hey Phil! Sorry it took me so long to listen to this. Great podcast!

Brandon, I know a lot of owners who are fearful to turn over the reins to a PM, esp. in the repair department. They also feel that it is a PM’s duty to get the best quality vendor for repairs/maintenance at the lowest price possible (I’m talking SFRs)? My experience is high quality and low cost rarely go hand in hand. As a very large operation with over 500 rentals, I would imagine Phil can negotiate discounts for his clients based on volume. But what’s a small PM firm to do?

Maybe I’m crazy, but as a long-distance landlord, I’ve always prioritized finding a PM who can find a high-quality tenant that pays on time, will stay awhile, and not constantly call with nitpicky repairs in the first place. If they do have a legit repair, then if they can get it repaired “correctly” and “skillfully” at a discount, great, but the quality of the work matters much more to me than the price, since in my experience, you get what you pay for.

I will say that I give my PM a certain dollar amount that above which it requires my approval, so this tends to keep issues in check and allows for an opportunity to go out to bid if need be. Maybe that would work for you Brandon until you know you can trust your PM (altho Josh’s idea about setting a trap was classic!). In the end, I think because you live close to your rentals, you’re probably always gonna feel like you can do it better/cheaper, and it sounds like maybe you can :)

Thoughts?

Reply

Phillip Dwyer May 13, 2014 at 1:12 pm

Sharon,
I appreciate you listening. Like you I think quality should be the emphasis. I’m concerned about the bottom line for my clients too.

You’re definitely correct about people that think they can get it done cheaper. Often times I’ve found that people don’t factor in the cost of their own time or they’re basing price on unlicensed workers.

Reply

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