In the past my tenants knew us as the landlords and owners. They'd call us if they had problems and issues. In the future we are going to take the advise of others and stay anonymous as much as we can.
Do you guys who go around to your properties just act like hired help? I was planning on assuming the role of a property manager. This way when I do my drive by and property walks to pick up garbage cans and some touch up tenants won't think I'm some stalker. Also they won't know that I own the place. I'd drive up in a utility truck or work van.
Real Estate Investor · OH · Member since 2008 · 4k+ posts · 1k+ votes
17y
My rentals are all owner by companies (LLCs that I coincidentally own). So, if a tenant asks me if I own the property, I tell them that the property is corporate owned and that I am the property manager. That is absolutely true.
I also do not have a listed phone number and use a PO Box number for my business address.
Real Estate Investor · Member since 2008 · 340 posts · 34 votes
17y
I stay totally anonymous. I close everything under the LLC. Use PO boxes, 800/local voice mailboxes and professional PMs.
I could walk past most of my tenants on the street and would not know who the heck they are.
I abhor drama and secondary markets are emotional drama epicenters. So, I am willing to shell out more costs to a PM to put a firewall between me and my tenants.
Now, I suspect MikeOH is going to chime in and tell a different story.
I think this would be an excellent idea if you are in a large enough city for it to work, New York definitely. In a small town no way to remain anon. Everybody knows you and what you do. Never have spent a dime on advertising, have more people wanting to rent than I have property.
Real Estate Investor · Bartlett, IL · Member since 2008 · 45 posts · 0 votes
17y
I've played it both ways and from an asset protection standpoint, it may be better to stay anonymous.
If you're having trouble with tenants bugging you for things or dealing with their rent, I simply ignore calls after a certain time or if I am in the middle of something and control the interactions. I train them to respect my time. If they leave a message, I'll listen to it shortly and call back if the situation requires it. Otherwise, I'll call them back in the morning.
If they are calling me about a repair, I'll play good cop bad cop and talk to my "business partner" or "higher power" (negotiating techniques) and any necessary contractors and make a decision.
What is the specific situation you are trying to solve? Can you clarify?
Manhattan, NY · Member since 2008 · 801 posts · 61 votes
17y
The only tenants who know I have any ownership interest in their homes are the ones who also work for us. Just like Matthew said, I wouldn't know most of my tenants even if I bumped into them on the street. They could be parents at my kids school for all I know. Heck, they could be teachers or members of the staff.
Real Estate Professional · seattle, WA · Member since 2008 · 43 posts · 1 vote
17y
We are anonomyous also--corporate mail box, voice mail, we insist they contact us by email (for a written record)--the ones that do not have email o, we mail a memo of all telephone agreements on our corporat3e letterhead--I always say I am a property manager--you learn alot of things if they do not know you are the owner--I found out someone had six children and two Newfoundland dogs which was not disclosed in their application--they asked me "not to tell the owner". And never let them know where you live!! A mad tenant will show up on your doorstep or at your office--we stopped giving out our office address 12 years ago for security and to avoid unexpected conflict. Joann
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
17y
I own many rentals in multiple locations and I do not know what my tenants even look like, nor do they even know about me. I use PM companies to manage and collect the rents.
I only have to manage my PMs.
Surveyor · Old Church, VA · Member since 2008 · 4 posts · 0 votes
17y
I take a different route. I make sure that my renters know that I am the owner and that I will be at the house every three months to change the air filters and any other maintaince jobs. This way I know the house will be cleaned at least once every three months. After I am in the house I can tell very quickly how many people are living there and if they have pets or not and I can deal with it right then.
Property Manager · Portsmouth, NH · Member since 2008 · 102 posts · 13 votes
17y
One reason to stay anonymous to the extent possible is personal security. Just like lawyers and cops, we occasionally run into very bad people - we really do not want them to know about us.
I had an experience with a tenant a few years back that scared the heck out of me. It made me rethink my whole approach to landlording.
Lender · Phoenix, AZ · Member since 2008 · 351 posts · 40 votes
17y
Can you guys give me examples of how much your property managers do. You say you never see your tenants so do you hire people when a repair is needed in the rental? How much does this cost per unit 10% rent?
Obviously it would be great to not deal with the headaches and stay to money making activities, but I don't know if I would like that for losing thousands of dollars a month.
I am just curious as a newbie, and I am having trouble understanding how much a PM company really can and will do for what price.
Real Estate Investor · OH · Member since 2008 · 4k+ posts · 1k+ votes
17y
Matt,
Most property managers charge about 10% of the gross rents. For that money, they take calls from tenants; collect the rent; arrange maintenance; provide a monthly report detailing income and expenses, etc. Many PMs charge extra for placing tenants in the units and some charge extra for arranging maintenance. In my opinion, it's the most overpaid profession in the world and I gladly do it for all my rentals and earn the management fee for myself.
The same is true of the maintenance, but that's another post.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
17y
Originally posted by MikeOH:
And much less profitable!
Mike
I don't see how that is true. Having more properties would generate more income IMO, not less.
I pay no more than 8% for management and the PM will do all the items Mike listed. I also do not pay extra for the PM to arrange the repairs/maintenance. That is obsurd, although many PM companies will have that in their contract. I simply delete it.
Real Estate Investor · OH · Member since 2008 · 4k+ posts · 1k+ votes
17y
I'm not sure that I understand your comment. It is certainly true that you make less money hiring a property manager than doing the management yourself, regardless of how many rentals you have.
Boonies, PA · Member since 2008 · 333 posts · 15 votes
17y
I will never go back to managing my properties myself. I bought those as an investment not for a second job. I don't know my tenants nor do I ever want to see them. I don't even like the idea of family members knowing I have rental properties.
Manhattan, NY · Member since 2008 · 801 posts · 61 votes
17y
Originally posted by MikeOH:
I'm not sure that I understand your comment. It is certainly true that you make less money hiring a property manager than doing the management yourself, regardless of how many rentals you have.
Mike
Once again, the timeless debate rears its head ...
Did you buy real estate as an investment or to have a job?
If you do it because you want a job, then Mike's approach makes sense. Aside from his apparent superhuman ability to manage huge numbers of properties on almost no time, by doing everything yourself you can wring out every single penny from each property.
I invest. Therefore, I don't manage tenants, I manage the managers.
At the end of the day though, there is little point in debating this because it really comes down to lifestyle. If you do it all yourself, then you have to do or it does not get done. Using others allows you to apply leverage.
It really boils down to personal security for me at this point. When I was younger managing my parents properties at the time I felt good collecting the rents and knocking on the tenants doors, fixing this and that. As I got older with my own rentals before I sold off I would go to make my rounds and I had all cash on me and I though this really isn't safe. So I told me self in the future I'd have to find a better way to collect and spot check. But it's hard especially when you want to check up on your investments.
Driving by and you see a garbage can turned over I'm almost drawn like a magnet to stop and pick it up. I remember seeing an old car in one of the drive ways with no plates and flipped out. I banged on doors and tenant tells me it was her uncles friend car or some crap like that. I told her it had to go ASAP. So it went the next day.
Anyhow for those who have PM's do you guys ever do spot checks on your properties and if things are out of place how do you handle it them. I'm going to assume you'll them call the PM to get their arse over to take care of whatever it is.
Real Estate Investor · OH · Member since 2008 · 4k+ posts · 1k+ votes
17y
Taz,
Absolutely no super-human ability is required to manage rental properties. As I've said many times before, I believe it's the most overpaid job on the planet. Management requires very little effort even for a large number of rentals. What exactly about management do you think takes so much time? Have you ever managed rentals? I'd like to know what you thought made it such a time-consuming job?
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
17y
Receiving phone calls from potential tenants and answering questions, going to location for showings, scanning and approving/declining applications, running background checks/employment histories, placing marketing signs at locations, placing online and newspaper ads, taking calls from current tenants (answer questions, fix problems, collect rent, send late notices, process payments, make payments/deposits to investor's accounts, arrange repairs/maintenance and oversee contractors and other service providers, take calls from investors and answer questions, serve default notices, attend eviction proceedings and court appearances, and I am sure I am missing some other items as well.
That all takes time and effort, gas money, car payments, phone bills, marketing expenses, etc.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
17y
Then to top it off, if you choose to do the repairs/maintenance/ rehabs yourself as Mike does, there is more time spent on that as well.
All in all, I think PM's are a good thing so long as you hire and oversee correctly.
Lender · Phoenix, AZ · Member since 2008 · 351 posts · 40 votes
17y
Sorry I sound like an idiot in this thread but I am a newbie... :D
PM companies handle your marketing and take care of your marketing fees? If this is true and you did get charged, say 10%, would that still save you expenses from the "50% rule" because you wouldn't have to market?
Also, they will goto your evictions in court? This all sounds great to be I do see how you would save money even though you need to hire out maintenance. So I guess in the long run your OE would still run around the "50% rule". Am I understanding this correctly?
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
17y
Yes, you pay them the 10% (I only pay 8%) and they have the marketing/advertising expense. They do not get it rented, they do not get paid, so they have an incentive to work hard for you and for themselves.
Going to court for me is something my PM's are willing to do as part of our negotiated contract. I also have many rentals to make it worth there while and it has only been needed once to date, so not a big issue.
The 50% rule is something MikeOH uses and experiences in his rental business. His average rental units rent for $450-$650 per month. As your rental units get higher, like $800+ monthly, the OE ratio drops. Note we are talking about single family and/or duplex units only, not apartment buildings.