I'm a 23 year old about to buy my first property - 2 Unit (2BR 1Bath each) Multifamily, and I keep going back and forth on if I'll need help managing one side while I live in the other. I realize that it's only one unit (attached to mine nonetheless) and for the price it costs to get professional management, it seems crazy not to be able to handle it yourself. That being said, I've still had some thoughts...
Mostly, I'm not sure about the basics of how to find good tenants, how to do background checks, knowing if I really need to hire a lawyer for a lease/contract, etc. I've been looking around, but can't find any solid articles that really break it all down, so any help would be greatly appreciated! Also, I've wondered about being taken seriously since I am fairly young (and quite frankly I look even younger). I have no worries about handling myself professionally, but I wonder if anyone would be less inclined to rent from someone young and presumably inexperienced - has anyone ever had/seen issues with this?
Any help would be awesome, thanks!
@Alex Phlipot , do it yourself. You are getting the property to grow your wealth. Don't give any of it away until you need to. You will learn a lot in the process. Build systems around the one unit that you can apply to multiple units. When you know how you want your properties managed, pass it to a manager who operates similar to your style.
As far as them not taking you seriously, you are in charge of who gets into that unit. If you know your stuff and don't let them know it is your first time doing it, they will not know. Have your ground rules for being a good neighbor ready for them, and stick to it. You can do it. If you don't make mistakes trying this out, you will not grow. Best of luck!
@Alex Phlipot , do it yourself. Keep digging around for articles and threads especially here on BP. The beginning is always trial and error so there usually will be a few issues. Your goal should be to minimize that possibility. Dependent on the quality of the unit you may need to make some concessions, but just do the research. Congrats by the way on jumping in at 23. I bought my first place at 22 and am quite glad i did. @Scott Trench jumped into his duplex young and is self managing so he may have a few quick tips for you.
Congrats on your pending puchase. Below, are some links to get you started.
Also, REI is a business and if treated as such you shouldn't have an issue regarding how you are perceived.
http://www.biggerpockets.com/renewsblog/2012/12/09/how-to-be-a-landlord/ (How to be a landlord)
https://www.fanniemae.com/content/tool/landlord-guidance.pdf (fanniemae landlord guidance)
Lastly, you should try to manage this rental on your own to gain experience, in the event you want to make REI a career.
Good luck, best wishes and don't forget BPers are here to help with your Q&A.
@Alex Phlipot , I too would advise that you manage the unit yourself, and I am a professional property manager. It would be great experience, and there are often standard documents that are accepted for rental applications and leases put out by your state realtor association (a local realtor may provide you a copy). Regarding tenant selection, this is an important step, but still one you can do yourself. The key factors are:
-Income: their rent shouldn't exceed 1/3 of their total income
-Credit: preferably a score of 680 or higher. A score lower than that is okay if you feel comfortable with the explanation. They can supply you with a recent credit report to keep it easy.
-Liquidity: if they lost their income, do they have reserves they could pay their rent with?
Congratulations! Your idea of a Real Estate Attorney is good to at least have proper lease agreements.