Self-Managing a Small Multifamily

9 Replies

Hi BP Community,

I am evaluating a duplex in the midwest as a long-term investment property. I will NOT be living in either unit but live in town and plan to self-manage the property. This would be my first investment property and, as I crunch the numbers, believe this could be a worthwhile investment and relatively simple way to start my REI career.

I have a few questions for those that manage properties and would appreciate your feedback.

- What is the most comprehensive/reliable, but cost effective, way to screen tenants? Specifically, criminal background checks, credit scores, rental history, etc. Are there reliable platforms to use or can you point me in the direction of the best way to do this so its easy on the renter and me as the owner/manager?

- What is the most cost-effective way to get maximum exposure for your listings? I want to avoid the MLS and get the best bang for my buck, but also fill the units quickly. Any help from the community to find the right middle ground would be appreciated.

- With these subjects in mind (tenant screening/advertising), how much should I set aside in annual cost? I am doing line item projected expenses and am unsure how to account for these costs.

- Other than google searching comparable rentals, is there any way you all accurately project rents as well as vacancies for your areas?

Thank you so much!

Anthony

Welcome to BP @Anthony Antonacci !

I am pretty new as well so I look forward to seeing what others have to offer.

One piece I do feel comfortable chiming in on is the listings bit. I assume you mean listing it for rent? I feel like most people just rely on either Craigslist or Zillow mostly, from what I read on here a lot and I believe both are either free or very cheap. I don't know that you can list rentals on the MLS?

Hi Anthony,

National Tenant Network is a service you can use to screen prospective tenants. I believe it costs about $40/- per screen. That is one I know of. There are probably others.

Be careful about performing criminal background checks, as it can be seen as a form of discrimination. I've used Experian credit check and its worked well. Always call references to confirm rental application details. You can always outsource this work, but if its just a duplex I'm sure you can handle the tenant screening. Trust your gut

I have has great success with posting on Craigslist multiple times a day and Apartments.com, but not sure how your market responds on those sites. 

Hope that helps some. 

Originally posted by @Dennis M. :

What class neighborhood is this in . That greatly sets the screening criteria you’ll be using

 Dennis - This is in a class B neighborhood. Very strong schools and highly appreciating area. Just older, well-maintained homes/duplexes. Please let me know what you have had success with. THANK YOU!

Originally posted by @Amy Lim :

Be careful about performing criminal background checks, as it can be seen as a form of discrimination. I've used Experian credit check and its worked well. Always call references to confirm rental application details. You can always outsource this work, but if its just a duplex I'm sure you can handle the tenant screening. Trust your gut

I have has great success with posting on Craigslist multiple times a day and Apartments.com, but not sure how your market responds on those sites. 

Hope that helps some. 

 Amy - thanks for your response. Craigslist would be fine with me as long as they are screened like everyone else, so glad to hear you have had success there. Regarding the criminal background checks - I am in Indiana. Is this state by state? Every "tenant screening guide" I see mentions running criminal background checks and I don't understand how this would be discriminatory. I am not disagreeing with you, just looking for guidance on how I can protect myself, as well as avoid any issues. Thank you!

Originally posted by @Vinod Badami :

Hi Anthony,

National Tenant Network is a service you can use to screen prospective tenants. I believe it costs about $40/- per screen. That is one I know of. There are probably others.

 Thank you! I am assuming you have used this? What information did this provide on your prospective tenant? Criminal background and credit? More or less? Thanks!

Hi Anthony! 

There is plenty of landlord software out there that will provide online applications, market your property on multiple listing sites, screen applicants, etc. for free! The applicant pays for the application/screening fee at no cost to the landlord. Some of these websites will also offer a rental estimate report for an additional cost that can help you accurately price your rental. If you need any software recommendations, please feel free to reach out to me directly! 

@Anthony Antonacci Zillow and Facebook Marketplace are my best lead generators for prospective tenants. Craigslist is still ok but it's not what it use to be... But all 3 are free!

I use Buildium for marketing and tenant screening and it's worth it for me but they're definitely not cheap. I've heard some great things about Cozy but I've never used it.

As for how much you should set aside in annual costs for tenant screening & advertising, it really depends... Contact a few local property managers and see if you can find out what the average vacancy rates are in your area. Based on how often you can expect your unit to be vacant, you can determine how much you'll spend on tenant screening and advertising. 

As for @Amy Lim 's concern on performing criminal background checks, I'm not an attorney but you shouldn't have to worry about that as long as you don't make a blanket statement that you won't accept anyone with a criminal history. That could be construed as indirectly discriminating against certain protected classes under fair housing laws.  See this link from HUD for clarity.