Advice for investors on their first rental

12 Replies

After 6 months, 50+ properties analyzed, 10+ property tours, and 2 offers, I am finally under contract to buy my first rental property in Omaha, NE! A 3BR/1BA in Midtown near UNMC and the VA hospital.

While I feel like I have learned a ton about finding deals, I am starting from scratch on how to find tenants, how to screen them, what little things to include in a lease, how to run credit checks, etc! Other than reading one of Brandon Turner's books, I am looking for advice in the following areas:

- Good sources of rental apps and leases (NE is not available through BP yet)

- Non-standard items to include in a lease or app that can be a real lifesaver (pest control, charges for clogged drains, etc)

- Free/cheap/effective places to post my listings besides FB and Craigslist

- How do I run credit checks for applicants?

- Tips for collecting rent (Can I use PayPal / Venmo for convenience and avoid paper mail?)

- Other things a 1st-time landlord needs to know but does not think about.
 

 Thanks in advance for all of your input!

Congratulations, thats a great area for rentals. I used to use tenantdata.com to do my background and credit checks and they did a great job the only problem was that I had to collet the application fee and the paper application and then input it to get the report. I started using buildium.com and that was good but kind of expensive and more then I needed for property management software. Another investor told me about cozy.co and am now using that, for me its seems to have all the functions I want and doesn't have a monthly fee. When I show a house I have I just text the prospective tenant the link to apply then they do it all on their end and I receive the report. It has been handy also for rent collection (however it is slow for the free version I think it takes about 6 days to post in my account). Getting a good lease is important, I got a copy from MOPOA a few years back and have used it since. Zillow, craigslist and a yard sign are what I do for advertising. I am an agent but I don't post them in the mls I get more traffic on the rentals from those other things. Best of luck!

With my rentals, I have listed on hotpads.com and it then gets shared to Zillow and Trulia. I also put it on FB Marketplace. I put my tenant criteria in my listing, but I still get close to 100 inquiries each time, with most just kicking the tires. My best tenants so far have come from hotpads, Zillow or Trulia and on one yet from FB. 

If you have a copy of the landlord book, you can get access to a lot of forms on the BP site since you have that book. They include applications and leases and much more. 

Congrats! I love TenantCloud app for keeping track of properties and maintenance requests. It really comes in handy once you have multiple properties. I use rentlinx for listings. It’s not free, but cheap. I have tried almost every site and this one is by far my favorite. 

-when I first started I made the mistake of having a 10 day grace period for rent payment. I have since changed it to 5 days

-I added in my lease that the sewer lines have been snaked prior to move in and tenant is responsible for any clogged drains. Any clog resulting in a snaked drain is a $400 fee. I also specify items that can not be flushed and they initial them.

-I had to add no swimming pools to my leases

-I require tenants have sewer line insurance. It is offered from the water company for $9/month.

-I require tenants to clean gutters and replace air conditioning filters but send them reminders to get them done.

-If washer drains into utility sink I remove utility sink and redo plumbing. Expensive, but have had too many basements flood from clogged utility sink.

These are all from hard lessons learned over the years. I think I say lesson learned at least once a month haha. 

Good Luck!

@Brian Washburn The best advice I can give someone in your position is to buy a copy of @Mike Butler's "Landlording on Autopilot" and use it as your handbook when getting started. It's one of the best boots-on-the-ground references I've seen for us smaller DIY'ers. IMO I'd advise staying away from Craigslist for listings. FB gets me a ton of "is this available" clicks but not much else. Zillow rental mgr has been the best. I like MB's theory of using paper applications but then I do background checks and rent collection through cozy.co. All the best!

I recommend buying Every Landlord's Legal Guide by NOLO. It's very practical information written by attorneys, includes state statues, and has practical advice.

There are a ton of "Tenant screening" services out there to do some researcj

Hey Brian! I would highly recommend taking advantage of the free landlord software out there that can provide you with online applications and screenings as well as market syndication so your property is posted to all of the major listing sites (i.e. realtor.com, apartments.com, Zillow, etc.). If you need any recommendations on software, please feel free to reach out to me directly through personal message!

I would make sure you have created a rental criteria that outlines income and credit requirements as well as how you will treat those with a criminal background or eviction history. Then, I would create a state-specific lease with addendums that cover major issues such as maintenance, pest control, pets, rent payments and so on. 

In addition, I would strongly recommend requiring renter's insurance for your tenants. Without renter's insurance you’re putting yourself, your rental, and your savings at risk. Requiring renters insurance protects you from expensive renter accidents, injuries that occur on your rental property, and costly lawsuits that can easily pop up in the landlord business. The student housing community I worked for required all tenants to have a minimum of 100K liability and you'd be surprised at how many times we had to use their policy for some sort of damage to the property (i.e. flooding, fires, etc.).

As far as rent payments, I would recommend using Venmo. Most people have the app nowadays and it's extremely convenient to transfer the funds into your bank account. 

Hope this helps!

There is some great advice above from other posters. I'd suggest looking for a local landlord association you can join. It's typically not very expensive and once you get to know people you could probably get tons of free advice and access to local vendors for all things related to property investment. 

Hey Brian, something I would look into is specifically renting out to traveling nurses and other medical professionals. I get a request here and there for my air bnb from traveling nurses who are willing to pay much more than what is typical since they are on shorter leases, and the property is about 15 minutes away from the med center. It looks like there are a couple sites - corporatehousingbyowner & travelnursehousing who focus on this specifically, but you should be able to find guests through air bnb and homeaway as well. It will probably be more work and more money, but definitely something to look into being so close to UNMC. Congrats on getting your offer accepted!

Hotpads, Zillow, and Trulia are all good places to list rentals as well.

You can collect rent through Venmo and there are some free Landlord sites out there that allow you to run screenings for a fee. I think Cozy is one of them.  You can track your financials on there and screen tenants. 

Thanks for all the great info/advice! Cozy seems like a really great tool. Almost too good to be true for being free.

I'm still looking for more advice on where to get a good lease. I know I can go to my attorney but he will likely charge me $1k for a standard lease that is already written and has been used a million times.

Note for any new investor reading this in the future: @Brandon Turner 's book on Managing Rental Properties should NOT be overlooked. This book answered many of my questions, and alerted me to things I had not even thought of. I learned A LOT.

But the real value in getting this book is the LANDLORD FORMS!!! Renter Applications, Lease Agreements, Addendums, Disclosures, Notices.... you get them ALL! My lawyer would have charged me $1,000 for all these easily.