Should landlords live onsite or not?

Question

I found a small multi-family property (4 units, 2BR/1BA per unit) and it qualifies for FHA financing. I am thinking about living in a spare unit (the other 3 units are currently renting at $550/mo each). Has any of you lived onsite as landlords before? What were your experiences and suggestions for me? I have 3 children and currently renting right now, but my primary concern is the safety of the neighborhood. What are some things to look out for/ask, or tools any of you use to measure how safe the neighborhood is before living in as a landlord?

I will go view the property next week, but the usual things I look out for are: vandalism (on streets, homes, cars), upkeep/maintenance of the neighborhood (trashy? or well-maintained lawns), elderly people outside/people jogging/walking dogs, how comfortable residents seem (do people's homes have garages opened? How many outdoor furniture are on porches in good conditions?), and lastly, I ALWAYS use "spotcrime.com" to determine the crime rate of an area.

What are some things to look out for/ask, or tools any of you use to  measure how safe the neighborhood is before living in as a landlord? Any feedback is greatly appreciated!

John Van Uytven · Answer

@Nhia Yang

I lived on property with 160 units.

They need to know not to come and knock on your door, unless it's an emergency.

If you are really trying to pull an area up, then living on property can be a great way to crack down on community issues.

It was nice being able to walk across the parking lot and be at work.

The con was there is literally no break.

It would be different though if you only have 3 units to worry about.

The real estate agent can't really tell you somethings about the area by law when it comes to safety.

You have the right idea about looking it up yourself.

Good luck and remember

*DFTBA*Don't Forget To Be Awesome

Nhia Yang · Answer

@John Van Uytven Thank you for the feedback, John! What were some policies reinforced from the property you stayed at which were effective and ineffective in yielding the type of tenant behavior you were needing? Also, how strict were you on tenants missing rent payments? Do you let the first time slide?

Account Closed · Answer

Quite honestly, if somebody knocked on my door uninvited so they could play 20 questions about the neighborhood, I would not have a very friendly response for them. This is a very bad idea. What if it turns out to be a bad neighborhood? You just knocked on the bad guy's door.

John Van Uytven · Answer

@Nhia Yang

Part of what I would do is walk my dog and then make reports as needed.

Like this gutter fell off, this tenant has things on their porch that are a fire hazard.

For the company it was Rent was due on the 1st, late charges started the morning of the 4th, late fees occurred daily then on the 10th we filed eviction.

Why let it slide? They know when the rent is due? That didn't change when the owner did.

Good luck and remember

*DFTBA*

Don't Forget To Be Awesome

Missy H. · Answer

Hi @Nhia Yang

Off topic.....

But if you want to highlight a person who posted click  "Control" and "@" together then type the first four letters of the person in question.  Their name will pop up and just click on it.

Good luck.

Nhia Yang · Answer

Thanks for everyone's input, as everyone's viewpoints hold sound advice from various angles. J Beard, I agree with you on not investing in Class-D neighborhoods, and I've still yet to physically inspect the place next week. If the area happens to be Class-D, I'm not going for it either.

But I'm wanting to hear what more seasoned investors who are in the game longer than I have to say/share their own approaches each one took whether it was for their first investment property or had similar experiences that I may have overlooked.

@Justin Fingers: I love your suggestions on driving by the neighborhood especially during the evening on weekends --- I plan to do just that this Saturday.

@Ryan Roberts: I can understand where you're coming from and will observe tenants/speak with some who are comfortable in voicing their opinions (@Brian Stark: Thanks, Brian for this tip!)

I'd like to add, the property is the only one for sale on that lot, but there's actually 4-5 other buildings (from what I can tell via GoogleMap) in the same area. So I should get a pretty good feel when I drive by it Saturday! Thanks so much every one of you for taking the time in giving me advice.

As a parent, it's stressful wanting to be able to give them more (by that, I don't mean money/expensive gadgets) but a more suitable living environment (no cockroaches/mice infested/ants). My son has been asking me for a "bigger house" and he'll build this tall tower from his blocks calling it our "new house." So it may not seem much to you all, but every single one of your advice/input is invaluable to me, trying to build passive income to achieve financial independence and smoothing out as many rough bumps on the road as I can for my family. It means so much, guys, thanks!

James DeRoest · Answer

Drive round the neighborhood at 7-8pm on a Friday night and you will soon get a feeling if things are bad. If it looks like a street party, then pass on the property. If you get offered drugs, not a good sign either.

Jeff B. · Answer

@Nhia Yang  I appreciate your question and being at the beckoned call of the tenants and that is not choice I would make either. However, this disturbs me much more

• "I have 3 children and currently renting right now, but my primary concern is the safety of the neighborhood."

The children is not the issue, but if YOU would have concerns about safety, why would you assume any of your tenants would be less concerned than you are?  Sounds like a Class-D neighborhood and personally would not invest where there's that much drama.  Yeah I understand risk-reward - - but never make your children part of the risk!

Brian Stark · Answer

I personally have no experience with being a onsite landlord.  But it is something I am thinking about doing.  I would say maybe keep it under your hat that you are looking to be the landlord.  Pose yourself as a possible tenant looking at the vacant unit.  When I rented I had that happen a few times I was asked about the area from people looking at the vacant units.  It also helps if you can catch them outside instead of knocking on the door.

Should landlords live onsite or not?

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