Skip to content
General Landlording & Rental Properties

User Stats

2
Posts
0
Votes
Dennis F.
0
Votes |
2
Posts

Pseudo-inheriting a residential property with minimal experience.

Dennis F.
Posted Jun 30 2022, 15:29

Hello all,

I have recently been given the responsibility of managing a 6 unit residential property in Brooklyn, NY. Without going into details, it belongs to and has been managed by a family member, but do to health issues they are no longer able to manage the property or give advice. Now everything has been put on me to figure it all out.

I'm here asking for advice on what I should do next. I can handle the basic stuff like paying the bills, but I do not have any knowledge on handling tenants, rent-stabilization laws, lease-renewals, collecting rent, etc. I was going to try out a management app like RentRedi to help. I would just go to a management company, but I am hesitant given this property has a fairly low net income do to taxes and rent-stabilization, a management company would greatly eat into the profit. 

What is the best place online to find answers to question I might have, for example; How do I find a good handyman for small fixes or a good contractor for bigger fixes, and whether a price is a ripoff or not? What is the appropriate way to contact tenants about the change, leave a note under their door or call? How do I properly handle late rent payments or fill out a rent-stabilized lease renewal?

Thank you for taking the time to read this.

User Stats

6,490
Posts
6,731
Votes
Bjorn Ahlblad
Pro Member
#5 Multi-Family and Apartment Investing Contributor
  • Investor
  • Shelton, WA
6,731
Votes |
6,490
Posts
Bjorn Ahlblad
Pro Member
#5 Multi-Family and Apartment Investing Contributor
  • Investor
  • Shelton, WA
Replied Jun 30 2022, 16:00

You could go to NOLO and learn everything. But you are in new york and the tenant pool will eat you alive.  
instead hire a great Pm and you may be suprised what they do to earn money. @Nathan Gesner can you help this person find a killer PM?

User Stats

24,942
Posts
37,097
Votes
Nathan Gesner
  • Real Estate Broker
  • Cody, WY
37,097
Votes |
24,942
Posts
Nathan Gesner
  • Real Estate Broker
  • Cody, WY
ModeratorReplied Jul 1 2022, 05:46
Quote from @Dennis F.:

Hello all,

I have recently been given the responsibility of managing a 6 unit residential property in Brooklyn, NY. Without going into details, it belongs to and has been managed by a family member, but do to health issues they are no longer able to manage the property or give advice. Now everything has been put on me to figure it all out.

I'm here asking for advice on what I should do next. I can handle the basic stuff like paying the bills, but I do not have any knowledge on handling tenants, rent-stabilization laws, lease-renewals, collecting rent, etc. I was going to try out a management app like RentRedi to help. I would just go to a management company, but I am hesitant given this property has a fairly low net income do to taxes and rent-stabilization, a management company would greatly eat into the profit. 

What is the best place online to find answers to question I might have, for example; How do I find a good handyman for small fixes or a good contractor for bigger fixes, and whether a price is a ripoff or not? What is the appropriate way to contact tenants about the change, leave a note under their door or call? How do I properly handle late rent payments or fill out a rent-stabilized lease renewal?

Thank you for taking the time to read this.


If you think it's expensive to hire a professional, wait until you hire an amateur.

You need to hire a professional property manager, especially in a market that is often hostile to Landlords. At least hire them for one year while you gather your wits, learn the law, figure out your processes, etc.

You can't ask all the questions below, but you can get an idea of what a good property manager looks like and then screen until you find one.

Remember: cheaper doesn't mean you'll make more money.

Start by going to www.narpm.org to search their directory of managers. These are professionals with additional training and a stricter code of ethics. It's no guarantee but it's a good place to start. You can also search Google and read reviews. Regardless of how you find them, try to interview at least three managers.

1. Ask how many units they manage and how much experience they have. If it's a larger organization, feel free to inquire about their staff qualifications.

2. Review their management agreement. Make sure it explicitly explains the process for termination if you are unhappy with their services, but especially if they violate the terms of your agreement.

3. Understand the fees involved and calculate the total cost for an entire year of management so you can compare the different managers. It may sound nice to pay a 6% management fee but the extra fees can add up to be more than the other company that charges 10% with no additional fees. Fees should be clearly stated in writing, easy to understand, and justifiable. Common fees will include a set-up fee, leasing fee for each turnover or a lease renewal fee, marking up maintenance, retaining late fees, and more. If you ask the manager to justify a fee and he starts hemming and hawing, move on or require them to remove the fee. Don't be afraid to negotiate, particularly if you have a lot of rentals.

4. Review their lease agreement and addenda. Think of all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.

5. Don't just read the lease! Ask the manager to explain their process for dealing with maintenance, late rent, evictions, turnover, etc. If they are professional, they can explain this quickly and easily. If they are VERY professional, they will have their processes in writing as verification that policies are enforced equally and fairly by their entire staff.

6. Ask to speak with some of their current owners and current/former tenants. You can also check their reviews online at Google, Facebook, or Yelp. Just remember: most negative reviews are written by problematic tenants. The fact that a tenant is complaining online might be an indication the property manager dealt with them properly so be sure to ask the manager for their side of the story.

7. Look at their marketing strategy. Are they doing everything they can to expose properties to the widest possible market? Are their listings detailed with good quality photos? Can they prove how long it takes to rent a vacant property?

This isn't inclusive but should give you a good start. If you have specific questions about property management, I'll be happy to help!

  • Property Manager Wyoming (#12599)

American West Realty & Management Logo
BiggerPockets logo
Find, Vet and Invest in Syndications
|
BiggerPockets
PassivePockets will help you find sponsors, evaluate deals, and learn how to invest with confidence.

User Stats

7,028
Posts
3,638
Votes
Drew Sygit#2 Managing Your Property Contributor
  • Property Manager
  • Royal Oak, MI
3,638
Votes |
7,028
Posts
Drew Sygit#2 Managing Your Property Contributor
  • Property Manager
  • Royal Oak, MI
Replied Jul 1 2022, 11:59

@Dennis F. You've created a contradiction! 

You don't know anything, yet you don't want to hire an expert to assist you.

Usually a recipe for disaster! 

You could easily LOSE everything with one bad tenant or by setting yourself up for a lawsuit.

Take @Nathan Gesner advice and also this:

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😊

User Stats

2
Posts
0
Votes
Dennis F.
0
Votes |
2
Posts
Dennis F.
Replied Jul 1 2022, 12:55

I thank you all for replying with so much information. I'm going to do some more research based off everything suggested. This is very helpful. Thank you again!

User Stats

7,987
Posts
4,125
Votes
Colleen F.
Pro Member
  • Investor
  • Narragansett, RI
4,125
Votes |
7,987
Posts
Colleen F.
Pro Member
  • Investor
  • Narragansett, RI
Replied Jul 4 2022, 09:23

@Dennis F. You have the responsibility but do you have the authority? Make sure the decisions you make on the property are covered by an agreement or POA from the owner. This will protect you in the long run.

A couple of things you might want to do before considering a PM may be to look at the property history,  gather all the leases, make sure you have all the bills, security deposits etc. If you have rent stabilized leases which ones are they, what are the expiry dates so you don't miss a renewal notice timeline (usually 30-60 day).   Make a table for yourself. Also has work been done work on the property in the recent past and what was done.  It puts in a better position for interviewing PMs, you know if you have any deadlines to meet.