@Melanie Stephens I have so many stories, but here recently I took a tenant in on subsidy and she somehow associates me with her father. Every Sunday morning I get a phone call at 7:15 where she wants to tell me a bible verse. Always different, but it makes her feel better if I listen. With hundreds of tenants I’m lucky this is the one lol
As a young investor, I did the math wrong calculating cash-flow on the 3 properties I bought and could not cover maintenance expenses. Further, I had no cash reserves. Obviously, this was an unsustainable situation and I had to dump all 3 properties.
- As you assess a potential rental acquisition, make sure you run the numbers correctly and thoroughly.
- Always have cash reserves for each property.
1. DIdn't find BP sooner
2. Didn't use built up equity to expand portfolio sooner.
3. Rented to friends and/or family
4. Didn't screen thoroughly or made exceptions to my criteria or let someone rush me into renting to them.
Just a few of the mistakes, I will never make again!
Hey @Melanie Stephens , One of the biggest mistakes we have made a number of times, is taking cash from tenants and renting to them too soon. When doing viewings, there are some tenants that are very eager to take the unit and give you first and last month's rent in cash on the spot. We had to learn the hard way that sometimes this is for a reason...not a positive one. Now we ensure to do our due diligence before accepting cash payments from anyone.
my worst nightmares were trusting property managers. I agree when you do the sniff test personally you have very little problems. But being a long distant landlord I had to hire property managers twice and got burned both times.
When picking tenants:
1. Cash is NOT king.
2. Stick to your criteria
3. A good salesperson at application will try JUST AS HARD...to convince you why they cannot make rent
4. Tenants you store cash in their mattress may be hiding from collectors/debts...or just not have enough money/reserves to justify a formal account!!
Show up a few minutes late to a meeting with a potential tenant. See their reaction. This has worked very well for me.
Beware of a boyfriend/girlfriend not on the lease. I bought a property with 1 legal tenant. She said her boy friend came over 'occasionally'. Turns out, he was staying there full-time. Tenant gets in argument with boyfriend, tenant moves out of a month-to-month, and deadbeat boyfriend refuses to vacate the premises or pay any rent. He knows I can't legally cut off landlord paid utilities and he faithfully pays tenant-named utilities. 3 months of eviction notices and a court date later, he moves out the morning of eviction day. He trashed the place. Be sure you know who is physically living in the property, not just the paperwork. Lesson learned.
At times background check, etc are not enough.
@Ramsey Rimkeit, Thank you for sharing your experience.
I don't take tenant screening lightly because they are the main determinant of how successful my investment will be.
I use smart move and visit their current resident, I also call 2 of their references just to see how good of a tenant they are.
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