Unexpectedly landlording - Process help please?

Question

Long story short, we purchased a house this year for a family member to live in, but they passed away unexpectedly before they could move in. It required a lot of work, and we did not just go through all the time, stress, and expense (which we'd do gladly for family member) to just sell it and break even. It's not an ideal investment property as such. It's a very small <900 sqft 2 bedroom SFH with no basement, though it does have a large garage, in a very high property tax area. So we've decided we'll be putting it on the rental market. I've been trying to do my process home work and would appreciate any insight.

What I'm gathering a sound process should be:

1. Register for google voice number

2. List house on zillow/craigslist, etc. with google voice number.

3. Send interested parties a link to pre-screening via a created google form (sample found in another thread).

4. Schedule showings for qualifying pre-screeners.

5. Then have them complete the official application with background and credit check (through zillow? mysmartmove? something else?)

6. Have them sign rental contract (created through ??)

7. Collect rent via ACH transfer (using Zillow? Other?)

We were already prepared to keep up with the maintenance of the property when family member would have been living there, so that was already in our plans. Thank you!

Kevin Sobilo · Answer

@Caitlin Burns, it sounds like you are really doing your due diligence. I may do things modestly different from your process, but what you are suggesting looks very solid.

My comment comes more with the big picture. Do you plan to acquire MORE rentals? In my opinion having 1-2 rental units is not ideal at all.

With 1 rental, you will have more ups and downs with tenant situations and maintenance issues. Things will either be going well (which you will barely notice), or HORRIBLE (which you will be unable to forget). If you have at least a handful of units, things start to even out because when one unit is an issue the rest carry all the expense.

Also, with 1 rental, you never do enough property management to become proficient. You seem well on your way to learning how to do this. So, having more rentals only makes that effort to learn more worthwhile.

So, if I was you I would plan to get MORE units!

Caitlin B. · Answer

@Kevin Sobilo Thank you and unknown plans at this point. We're definitely testing the waters with this house first. If we hate landlord-ing we can sell it, but scaling to more is not out of the question once we feel we're not in over our heads. We were able to pay cash for this one after refinancing our primary residence, so we could always treat this house as a BRRRR.

Bill B. · Answer

It might not be a bad idea to use a PM that will provide just finding and screening new tenants if you don’t want to use a fUll service PM. They’ll have a better idea of where/how to advertise your property and what an ideal tenant looks like. More importantly they’ll keep you on the right side of fair housing and they may even pay for themselves by charging more rent than you would or not asking so much it stays empty for an extra month.

You just don’t gain much by studying and learning the advertising, screening, showing process that you hope to only use every couple years. Especially if you end up charging the wrong rent, using a lease with invalid/illegal clauses, violating a law/statute, lose more to vacancy while you learn than you’d pay for the PM.

There’s something to be said for learning the process if you were sure you were going to get 5-10 rentals going, but that’s not your plan today.

Pa. Talk to your insurance broke in writing (email/text). You want to be sure you have valid insurance today (most policies don’t cover properties vacant over 60 days). You also want to change It to a landlord policy once you have decided to make it a rental property. (Also keep track of vacant maximums.).

Caitlin B. · Answer

Thank you all for the information and votes of confidence. We're entering this with naysayers who think we should just dump the property and wash our hands of it (it's been a nightmare house and the plan fell apart with the family member death), so it's nice to hear the opinions that we're on a solid track!

JD Martin · Answer

Feel free to visit our company website (in my signature below) if you want to get some idea of how we operate; we self-manage a reasonable amount of single-family homes (and occasionally apartments) through this website. Beyond that, you have most of the other steps right - we use Apartments for rent collection (Cozy before it was sold), TransUnion Mysmartmove for background & credit checks, and advertise on Zillow, Realtor.Com, FBM, Trulia, Hotpads, Apartments (we don't use Craigslist any more, too many scammers).

Danielle Jackson · Answer

@Caitlin Burns nice work on getting your ducks in a row. I agree with rent collection through Zelle, and BiggerPockets has a lot of information and sample rental contracts. Good luck!

Rick Albert · Answer

There are so many different ways to do it and you are clearly on the right track.  Here are some initial thoughts from my experience:

1. Register for google voice number I like that idea as that is what I did.  This way for text messages if you want you can have an email record of it.

2. List house on zillow/craigslist, etc. with google voice number. Don't forget Facebook Marketplace.  That's where most of my leads come from.  Just be prepared for a lot of flakes.

3. Send interested parties a link to pre-screening via a created google form (sample found in another thread). You can try this but the more barriers to entry you do, the least likely you will get a tenant.  Statistically for every step of the buying process, a customer is 50% likely to drop off.  That's why Amazon has a "one click" option.  What I've done is if there is interest I just send them a message with everything including answering common questions.  After they read it, then they can come see it.

4. Schedule showings for qualifying pre-screeners. See point 3.

5. Then have them complete the official application with background and credit check (through zillow? mysmartmove? something else?) I just used Tenant Cloud and it seemed to work well.

6. Have them sign rental contract (created through ??) I believe BiggerPockets have some options.

7. Collect rent via ACH transfer (using Zillow? Other?) I use Zelle.  Depending on your state the downside to wire transfers is if the tenant stops paying rent and you need to evict, if they wire even a partial payment, that could stall the eviction.  However with good vetting, most evictions can be avoided.

Kevin Sobilo · Answer

@Caitlin Burns, your thinking seems very clear. I don't think you are in over your head at all. One rental will just give you anecdotal information in return. It might shape how you feel about doing the property management work, but I suspect you are well capable whether this goes smoothly or whether you encounter some difficulties.

Unexpectedly landlording - Process help please?

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