With so many landlords on here and so many good tips always being shared for newbie landlords, I'm curious what has personally been the best first few pieces of advice you got as a landlord?
Conversely, were you ever given bad tips or advice?
Screen, screen, screen. And yes, I once accepted a bad tenant based on advice from a big time investor who told me if they could get a co-signor, to do it. Prior to that advice, I would have turned her down immediately... Long story short, the property owning sister who co-signed shortly after my tenant stopped paying, got divorced and dropped off the map.
A friend told me how he acquired 30 properties in 5 years (grew his net worth from zero to $3 million in that time) using rentals (the BRRRR method). Otherwise, I wasn't looking to become a landlord. Now I am. That one 45-minute conversation changed my future.
@Elaine Fawcett that sounds like a frustrating scenario, especially if your own instinct would have been correct. Screening is probably one of the most invaluable tips for any landlord!
@Steve K. That sounds pretty life-changing. Also, kudos to your friend! That's a great success.
@Michael Hayworth That is a great percentage on auto-draft!! How do you set up the auto-draft? Straight from their account into yours?
Never "work with people." It's a loser excuse for not having any money and a job for you that won't pay very well at all.
Johnnie Cochran once famously said, "If the glove don't fit, you must acquit." Well, if the tenant don't pay, you just evict. If they say they are going to pay on the 15th and you buy into that BS, tell them no problem, but you have to file the 3 day notice now just to protect your rights and if the rent shows up on the 15th you'll be all set. If it doesn't, the lawyer moves forward with the eviction.
Never accept personal checks for move in expenses. They will bounce. The squatter will have possession. You'll be paying for an eviction. Cash, cashier's check or money order only.
If you can't afford to keep it vacant, you can't afford to keep it. In other words, if you're so desperate for the next person with even remote evidence of income just so you don't have to make that next mortgage payment, you need to sell. Keep your house vacant until you find the perfect tenant. In my world, that is stable people who are collectible, stay and pay.
If they ask if they can plant flowers, they won't. In reality, 99.9% of the time they are pigs.
Based on my experience talking to lots and lots of prospective tenants, they will tell you the exact person they are not. If they say, "I'll pay all the rent early." They'll be late every month. If they ask to plant flowers, they'll trash your house, never water the lawn, and live like pigs. If they say, "I can fix everything" they probably can't even tie their own shoes and you better never trust them with plumbing and certainly not electric repairs. I call them opposite talkers. Whatever they say they'll do, is the opposite of what they are going to do.
Don't be fooled. This isn't property management. Property does not need to be managed. It is people management and there are lots of sociopaths out there.
The best way to get a crappy tenant out of your house is to never let them in in the first place.
My first landlord mentor told me, "You can't pay for this type of entertainment!" It is quite fascinating the stuff people will do and try to get away with. Just laugh about it and keep charging forward. All businesses suffer loss so expect some tenants won't pay, some will need to be evicted. If you can't handle that reality, quit now and go work for someone else.
Be fair but firm and when talking to a tenant, be on their side against a common enemy (company policy, lease, law, etc.). I talk more about this concept here if you're interesting: https://www.biggerpockets.com/renewsblog/2015/12/23/deal-with-unhappy-tenants/
Have a good lawyer and have a good accountant.
I'm an accountant so I double your vote Russ :)
For investing, not to wait until all the lights are green to leave the house. start driving and handle each yellow or red light as they come.
It's a business so treat it like it is.
Don't rent to family and/or friends and expect to receive rent monies every month.
@Andrew Syrios Great post! Thanks for sharing that.
Have a list of good reliable contractors for repairs. (Plumber, electrician, heating & air, etc)
@Aaron Mazzrillo "there are lots of sociopaths out there."
Thanks for the reminder! I've met quite a few in my personal
and professional life, and I use to be a teacher!There everywhere.They are the ones always looking for excessive sympathy in order to control you. Hate thinking about it, but you have to be aware. Their true colors come out eventually, but then it's too late.
Buy low, sell high, and its either a deal or its not, don't try to talk yourself into a deal just because the terms are good.
Never, ever, ever overleverage yourself!!
Always remember to include charges for your time invested when figuring the numbers, and keep track of your time invested on every property. A lot of people are losing money on deals and don't even realize it because a property may be cash flowing positive, but they're not figuring in the value of their time invested.
@Krystallin Baker From what I have seen the last 10 years people fail because of 2 main reasons:
1. Lack of cash reserves
2. They do not screen perspective tenants properly
@Jeff Filali "A lot of people are losing money on deals and don't even realize it because a property may be cash flowing positive, but they're not figuring in the value of their time invested." That is excellent advice!
I also avoid the excess "god bless you" manipulators. People pretending to be super religious hoping to influence your decisions tend to be the biggest sleazebags I've come across as a landlord..
"Don't be fooled. This isn't property management. Property does not need to be managed. It is people management and there are lots of sociopaths out there."
I love that idea--it isn't property management but people management.
Can't really add to much for than what's already been said.... Been a residential Landlord for 21 years (I'm 44 now) so I have seen and been through a lot as a Landlord...
Talk is cheap - always put it in writing and ask for proof and or verification and watch how fast the story often changes
Nobody and I mean NOBODY will look after and take care of your property better than you will! Not saying property Managers are bad or there is no place for them, I am just saying YOU have the best interests in your property above ANYONE else
Make it a priority to always interview multiple prospective tenants, never go with the first one, always have a pool to choose from.... And your gut instinct is a trust worthy source use it and listen to it!!!!
Don't ignore small problems as they will usually turn into much bigger problems and you will wish you took care of it when it was a small problem.
Treat your tenants well, at the end of the day they are buying you a building!!!
Above all, enjoy what you do, take pride in your business and properties, and most important don't lose money!!!!!
"Treat your tenants well, at the end of the day they are buying you a building!!" @Chris Masons I like that one!
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