New Investor Interested in Omaha

[Account Closed]

Hello - I am interested to invest on single and multi-family rental properties in Omaha. If you can share any info on the following, it will help me a lot:

1. What do you think of the current rental market in Omaha? Somethings I need to be aware of the market.

2. Do you use Property Management company? If so, who do you suggest? I see couple of them on the web, but hard to tell. 

I live in neighboring city; that is why I am interested in property management, and it will also be great getting some info from local individuals.

Thank you in advance for all your feedbacks!!

[Drew Sygit]

@Account Closed 

In our experience, the #1 mistake owners make when selecting a Property Management Company (PMC) is ASSUMING instead of CONFIRMING.

It's often a case of not doing enough research, as they don't know what they don't know!

Owners mistakenly ASSUME all PMCs offer the exact SAME SERVICES and PERFORM those services EXACTLY THE SAME WAY, so price is the only differentiator.

So, the first question they usually ask a PMC is about fees - instead of asking about services and HOW those services are executed.

EXAMPLE: PMC states they will handle tenant screening – what does that specifically mean? What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.? You’d be shocked by how little actual screening many PMC’s do!

This also leads owners to ASSUME simpler is better when it comes to management contracts.

The reality is the opposite - if it's not in writing then the PMC doesn't have to provide the service or can charge extra for it!

We have a 14-page management contract that we've added our real experiences to over the years, with the intent of protecting both us AND the landlord. Beyond the Monthly Management, Placement & Maintenance fees, all other fees in our contract are IF EVENT -> THEN fees.

We don’t know any PMCs to recommend in the area mentioned, but since selecting the wrong PMC is usually more harmful than selecting a bad tenant, you might want to read our series about “How to Screen a PMC Better than a Tenant”:

https://www.biggerpockets.com/member-blogs/3094/91877-how-to-screen-a-pmc-better-than-a-tenant-part-1-services-and-processes

We recommend you get management contracts from several PMCs and compare the services they cover and, more importantly, what they each DO NOT cover.

EDUCATE YOURSELF - yes, it will take time, but will lead to a selection that better meets your expectations & avoids potentially costly surprises!

P.S. If you just hire the cheapest or first PMC you speak with and it turns into a bad experience, please don’t assume ALL PMC’s are bad and start trashing PMC’s in general. Take ownership of your mistake and learn to do the proper due diligence recommended above😊

[Account Closed]

Thanks Drew - this is very helpful feedback and thanks for link too. 

[Tanner Sherman]

Ike

I am an extremely biased supporter of the Omaha market as most of my investments are in Omaha. Here is my quick rant on the market;

Omaha home prices are continuing to go up roughly 1% per month. Then number of new listings has gone down almost 10% year over year. This is going to cause prices to continue to go up since there is less supply than demand. We don't see the crazy appreciation that you see on the coastal markets, where you can buy a property for 200k and 5 years later it's worth over 1M. But in a downturn while those markets are experiencing a crash, we are still booming. If we see any shift in the Omaha market interest rates will have to be above 10%. A correction is healthy, but we will probably only plateau for the winter, then the demand will be back in the spring and the market will continue to inflate in the midwest.

I would recommend interviewing property management companies and see who is the best at communication.

[Account Closed]

Thanks Tanner this is very informative and helps me what to expect from this market. 

[Xandy Krueger]

Omaha area is continuing to grow, rents are continuing to increase. In addition, rentals are still going relatively quickly as we see a high demand.

I have over 3 years of Property Management experience as well as a team with years of experience as well as investors themselves. I’d love to setup a time to sit and discuss what you’re looking for in a Property Management team further!

[Ted Kaasch]

With all this great advice you got, what actions have you taken in the last 3 months?