Self Managing for a Newbie

26 Replies

Hello BP! I'm finishing up my 1st investment property and am interested in self managing. What lessons can you share that could help me and other newbies? I've already started a journal with my renovation lessons and would appreciate your lessons as well 😊

Hey there Cassandra! I personally use the BP leases for both of my properties and they work great for me so it was well worth the initial cost. Be firm with when rent is due, when a late fee will be applied, etc. Accidents do happen in people's lives so in the end it is up to you to decide what is an 'acceptable' reason for rent to be late. Just don't let them not pay you rent for an extended period of time because if you are new to being a landlord a lifelong tenant could take advantage of you. In the worst case senario it is also good to know and understand your state's eviction process and how long it can take. I wish you the best!

Step one is memorise your state landlord tenant regulations and thoroughly understand how they are applied. When interviewing a new tenant lay down the law to insure they fully understand how you manage. Remember your primary responsibility is to train every tenant to be a good tenant. Bad tenants are created by bad landlords. When a landlord has a problem with a tennat it is 99% of the time the landlords fault. If a tenant pays late you immediately issue a pay or quit notice and strictly enforce late fees. If they pay late a second time you make it crystal clear that one more time and you will evict or non renew the lease. Very best possible lease option is M2M.

Never include any clause in a lease that you do not intend to strictly enforce. A lease is a legal contract, enforce it to the letter or don't waste you time having a lease.

Contrary to @Spencer Abeyta statement that there is such a thing as a "acceptable" reason for late payment. Tenants have excuses not reasons. If your tenant is not dead rent is to be paid on time. If the tenant is dead the family pays the late fee. Ignore all excuses, always send pay or quit notice the day after rent is due.  

There is no place in business for emotions, compassion is the first step to failure, hope is another word for delayed disappointment. 

Tenants will attempt to push you and your lease to the limit. Blink and you lose.

I would take your journal and write each of @Thomas S. ’s sentence on an individual page- they are the gold that makes many of us successful and HAPPY landlords. 

If you button up your end then when problems arise, they will pass sooner and in your favor.

I had the benefit of a friend who is a very successful landlord show me the ropes- his raw advice would not be permitted here- but it distills to what Thomas said.

Personally I am a big proponent of documenting everything, late rent, lease violations, etc. When the tenant is confronted by a piece of mail they take it more seriously. Also you are making yourself more bullet proof in court.

There are a handful of posters here whom I appreciate and I feel run their operation like I do. They are giving you the gold.

Run your business like a business and it will be a blast!

Enjoy!

Originally posted by @Cassandra Sifford :
Hello BP! I'm finishing up my 1st investment property and am interested in self managing. What lessons can you share that could help me and other newbies? I've already started a journal with my renovation lessons and would appreciate your lessons as well 😊

 Here are a few best practices for you.

  • Run a complete background check on all applicants. Do not take people's word for it. You need to perform a credit, criminal & eviction check on every applicant. On top of that collect an application fee from the tenant to cover your background check cost.
  • Collect a non refundable deposit prior to move in. Do not hold a property for a tenant for a couple weeks prior to move in for free. Many times these people will change their minds leaving you high & dry. Always collect the money & never return it as some of them will still change their minds even though they've already put up the money.
  • Non locking handles. The only lock should be the deadbolt. Doing this you will reduce your tenant locks outs as well as lower your lock change cost at every turnover from him on out.
  • Don't accept personal checks. These can bounce causing you a major issue.
  • Have a zero tolerance policy on rent collections. Evict everyone one every time. Do not try to work with the tenants when they can't pay rent. Lost your job? Tough. Grandma's sick. Too bad. Draw a line in the sad & evict if rent isn't paid by that date. No exceptions.

I agree with the above posts. Learning your state laws is of the utmost priority. If you don't know/understand the law, you'll have a difficult life.

Then you need to learn 147 other skills like marketing, screening, building policies, enforcing late fees, how to evict, etc.

My favorite source for a beginner is Every Landlord's Legal Guide by NOLO. It's a big book full of practical advice from marketing, screening, leases, collecting rent, etc. It is written by attorneys and includes the law, not just opinion. It has links to your state laws so you can (and should) read them for yourself but it also includes summaries of important laws like how to handle security deposits or evict tenants for failure to pay rent. It also includes common forms that you can edit and use.

Their web site is a free resource with links to your state law but I highly recommend the book for some of the practical advice they provide.

Hey @Cassandra Sifford - There are a lot of good points here already. I would second the advice of sticking to your lease. If you don't enforce your own policies, then tenants will not take you seriously as a landlord. The key is to be consistent, firm, and fair.

Start planning ahead for maintenance and repairs by growing your network of local professionals. Doing some research now to find a qualified plumber, electrician, etc. will be a lot better than when there's an emergency.

Screen your tenants. You may have a great first impression of someone, but impressions don't pay the rent. Make sure you have all the information you need to make an informed decision and save yourself headache down the line.

Start figuring out how you plan on collecting rent. There are a lot of online platforms and apps that make rent collection easy. Tenants generally prefer paying from their phones, and finding something with AutoPay will increase your amount of on-time payments.

Best of luck to you!

@Spencer Abeyta ... Thank you for your advise!  I've found a few leases I've been reviewing in conjunction to what I feel would be best for my property.  I know I must be firm and stick to that lease or the tenant could take advantage.

@Thomas S. ... Thank you for your advise!  I'll admit my memory isn't the best, but will do my very best in memorizing my local tenant laws.  I've read that when you're unsure of how to answer a tenants question, advise them that you will follow back up after reviewing the lease and the tenant laws.  I figure that statement can be a CYA when it comes to answering their questions and I don't have the answer.  I appreciate your firm business approach as there are people who are out here just to take advantage. 

@Patrick M. ... Thank you for the information! I love raw advise LOL  Blunt and straight to the point!  I'm sure a few choice words were added for good measure!  When you send your pay or quit letter, do you send it certified mail?  I'll presume so you know that it was received and signed for.

@James Wise ... Thank you for the valid points!  How much do you typically charge for a background check and application fee?  Do  you use a rent collection site to do the checks and get your rent collections?  For the first two months, I'm requesting cashier's checks or money orders so I know that the money is definite.  I wanted to use something like Cozy so it will hopefully be easy to receive my funds electronically instead of depositing a check. 

@Nathan G. ... Thank you for posting!  I read my local laws at sporadic points of the day.  Usually night time since I work a f/t (for the time being).  Thank you for the guide.  B&N has used copies for $1.99.  I'll have to grab a copy.  I printed off a summary of our local laws as well for reference.

@Rachel Jacobson ... I appreciate your post as well!  Seems like sticking to my lease is what's going to carry me through as a business owner and a professional one at that.  I have a few GC's (licensed and unlicensed) in my circle and have realized that everyone has their expertise so I know when to call on them and for what.  In regards to tenant screening and rent collection, what online platform do you use?

To EVERYONE ... I was considering letting my realtor vet the tenants and allow me to select from those for further due diligence, but was wondering what the pros and cons would be?  We have a good relationship and I trust her judgement.   I'm considering renting Section 8 and know that I'm going to get ALOT of calls so I'm getting a Google # to help field those calls and text the individuals back to make sure that they meet the requirements before I waste my time calling and showing the unit.  Have any of you let your realtor do the initial screening?  If so, how has that particular tenant been for you?

I appreciate all of your input and will add the information to my journal for safe keeping!

Best ... Cassandra :)

There is a lot of good wisdom given to you here.  

In my opinion, you definitely have to know who you are renting to.  I ALWAYS require tenant screening through mysmartmove.com.  The applicants pay for their own screening at that site.  The site then sends you an email and gives you their recommendation on them.  

Also, before you get that far, be sure to have a casual conversation with them, asking about their lives, hobbies, work, etc.  (not interrogation, just a chat).  Get to know them a little.  People like to talk about themselves and you can learn a lot about who will be renting your house.   That will help you screen out some people.

Never let anyone slide on late payments.  You are running a real business and you need to get paid.  Have a system in writing for how you handle that, if necessary.  

Best of success to you!

Originally posted by @Cassandra Sifford :

@Spencer Abeyta ... Thank you for your advise!  I've found a few leases I've been reviewing in conjunction to what I feel would be best for my property.  I know I must be firm and stick to that lease or the tenant could take advantage.

@Thomas S. ... Thank you for your advise!  I'll admit my memory isn't the best, but will do my very best in memorizing my local tenant laws.  I've read that when you're unsure of how to answer a tenants question, advise them that you will follow back up after reviewing the lease and the tenant laws.  I figure that statement can be a CYA when it comes to answering their questions and I don't have the answer.  I appreciate your firm business approach as there are people who are out here just to take advantage. 

@Patrick M. ... Thank you for the information! I love raw advise LOL  Blunt and straight to the point!  I'm sure a few choice words were added for good measure!  When you send your pay or quit letter, do you send it certified mail?  I'll presume so you know that it was received and signed for.

@James Wise ... Thank you for the valid points!  How much do you typically charge for a background check and application fee?  Do  you use a rent collection site to do the checks and get your rent collections?  For the first two months, I'm requesting cashier's checks or money orders so I know that the money is definite.  I wanted to use something like Cozy so it will hopefully be easy to receive my funds electronically instead of depositing a check. 

@Nathan G. ... Thank you for posting!  I read my local laws at sporadic points of the day.  Usually night time since I work a f/t (for the time being).  Thank you for the guide.  B&N has used copies for $1.99.  I'll have to grab a copy.  I printed off a summary of our local laws as well for reference.

@Rachel Jacobson ... I appreciate your post as well!  Seems like sticking to my lease is what's going to carry me through as a business owner and a professional one at that.  I have a few GC's (licensed and unlicensed) in my circle and have realized that everyone has their expertise so I know when to call on them and for what.  In regards to tenant screening and rent collection, what online platform do you use?

To EVERYONE ... I was considering letting my realtor vet the tenants and allow me to select from those for further due diligence, but was wondering what the pros and cons would be?  We have a good relationship and I trust her judgement.   I'm considering renting Section 8 and know that I'm going to get ALOT of calls so I'm getting a Google # to help field those calls and text the individuals back to make sure that they meet the requirements before I waste my time calling and showing the unit.  Have any of you let your realtor do the initial screening?  If so, how has that particular tenant been for you?

I appreciate all of your input and will add the information to my journal for safe keeping!

Best ... Cassandra :)

How much do you typically charge for a background check and application fee? 

$40.

Do you use a rent collection site to do the checks and get your rent collections?

We collect in person at our office or directly our website.

For the first two months, I'm requesting cashier's checks or money orders so I know that the money is definite. I wanted to use something like Cozy so it will hopefully be easy to receive my funds electronically instead of depositing a check. 

Why do that for only two months? No need to change your process in the middle of the lease. Have one process & stick with it. We NEVER accept personal checks nor do I think you should. Month 2, 3, 7 or 28 doesn't matter. No checks means no checks.

@Jorge Roman ... Thank you!

@Andrew Syrios ... Thank you for sharing!  Crazily enough I read your article a few weeks ago!  It helped me to decide that giving it a shot to self manage was well worth it ... especially the part where I care more than anyone else.  I figure if it doesn't work out, then I can sign up with a PM.

@Rachel Jacobson ... I'm really glad you shared your company information!  In checking out the site, it states "all features of our rental management platform are free to landlords, property managers, and tenants."  I'm wondering how you generate revenue?  Do you charge for any services?  Sound too good to be true LOL

@James Barnhart ... Thank you for sharing your thoughts!  In regards to mysmartmove.com, it's nice to get someone elses' professional recommendation on a potential tenant.  I also like the idea of chatting with people and getting to know them.  

As a general consensus, everyone is advising to stick to my lease and to be firm and fair with my business.  I feel that if I continue to learn as much as I can and ask questions in this generous community and other professionals, all will be fine!

@Cassandra Sifford - Our business model focuses on lead generation. If you as a landlord have a broken refrigerator, Tellus can connect you with a repair person who can fix it. Or if it's broken beyond repair, we can show you special offers from big box stores for buying a new fridge. Vendors pay to get the word out for their business, and you get access to exclusive deals. You're never under any obligation to take these recommendations. It's just supposed to help connect the dots.

Originally posted by @Cassandra Sifford :

@Jorge Roman ... Thank you!

... Thank you for sharing!  Crazily enough I read your article a few weeks ago!  It helped me to decide that giving it a shot to self manage was well worth it ... especially the part where I care more than anyone else.  I figure if it doesn't work out, then I can sign up with a PM.

 That's really cool! I'm glad you found it helpful and good luck!

Originally posted by @Cassandra Sifford :
@Andrew Syrios ... Thank u for taking the time to share! I love running across articles that help me gain a clearer perspective in making decisions.

 Absolutely Cassandra, I hope it helps.

@Andrew Syrios ... It DEFINITELY helped!!  I was really going back and forth then read your article and said it's worth a shot.  I've listed to podcasts about working full time and self managing.  I figure if they can do it, so can I.  Everyone's circumstances vary, but I'm determined to quite my 9-5 and I know that having well rounded experience can only help me reach my goals faster.  I truly thank you for sharing :)

I have a small MF.

Don’t waste time when it comes to evicting. Every day you wait is a day of lost rent.

Talk to previous landlord in person (check tax records). I had a bad experience where the PM I previously had installed satan in my unit. Her boyfriend pretended to be the previous landlord.

When I do background, I check Facebook, superior court website & sheriff’s website. I belong to an apartment association and pay for the credit & background check and I match up what I find on my own research. 

I don’t ever accept a previous eviction.

Originally posted by @Rachel Jacobson :

Hey @Cassandra Sifford - There are a lot of good points here already. I would second the advice of sticking to your lease. If you don't enforce your own policies, then tenants will not take you seriously as a landlord. The key is to be consistent, firm, and fair.

Start planning ahead for maintenance and repairs by growing your network of local professionals. Doing some research now to find a qualified plumber, electrician, etc. will be a lot better than when there's an emergency.

Screen your tenants. You may have a great first impression of someone, but impressions don't pay the rent. Make sure you have all the information you need to make an informed decision and save yourself headache down the line.

Start figuring out how you plan on collecting rent. There are a lot of online platforms and apps that make rent collection easy. Tenants generally prefer paying from their phones, and finding something with AutoPay will increase your amount of on-time payments.

Best of luck to you!

 With all this stuff being free, how does Tellus make its income? Free stuff like this is scary. Lead generation for who? Who buys or uses the leads?

@Cassandra Sifford ...I guess I wouldn't be opposed to your realtor helping you, but at the end of the day if you're serious about self managing and growing I think you should be working on a process and systems to do it yourself. You get better by repetition and I'm not sure having your agent involved is going to help you.

I self manage and this is what we do. 90% of our leads come in via zillow, trulia, hotpads, etc. I get calls or automated messages sent to me from those sites. We list our rental criteria on those sites so when tenants call or we talk I ask if they have seen that criteria and if they will pass or have any concerns about it. It's been my experience that most will tell you then if they have something that might be an issue. I try to ask a few questions about why they are looking to move and how much they know about the area where the house is located. Typically this gets them talking and telling their story of why they are moving and how familiar they are with the houses location, etc. Sometimes this leads into what job they have and a bunch of other information. Based on that conversation and how it goes we will agree to set up a time and show. I try to group as many showings into a time window as possible so once I set an appointment I try to schedule others with any folks that are interested. Most of our stuff is fully rehabbed and looking nice so when we post it for rent we typically get between 5-10 people reach out in the first 1-2 days. The only time I'll do a one off showing is if they seem extremely qualified and love the pictures or if the interest level is low for some reason. Never never never set up a showing without talking to someone on the phone first.

Always call or text to confirm appointment times.  You'd be surprised how many people don't show.  Typically, I would guess these people are the people who won't qualify based on your criteria, but when you were talking to them they said they would.  So they go ahead and set a showing time, but don't really have any intention of showing.  If I can't get them on the phone or they don't respond then I don't go to show.  Simple as that.

If someone says they want the place then we begin the application process, but I never take a security deposit at the showing because I don't know if they will qualify.  Others who do significant volume might disagree, but I view this process like a courtship and I want them to want me (my house) in a few days.  I'm not going to give it to them on the spot, typically because we have other interested parties that may be better qualified.  I'm training them that this is a process and I take it seriously so it's going to take a few days from beginning to end.  Once they get the application to us then we start our work.  Only after acceptance do we sign the lease and take the security deposit, etc.  This may not be the process for everyone or even the best process, but it has worked well for us.

@Scott Anderson ... I thought the same thing.  Haven't had the opportunity to research the site, but giving away services is a rare occurrence.

@Bob Woelfel ... Thank you for the information!  

I think I'll do my own screening even though I trust her judgement.  It will help me get a better feel in interacting with people in a completely different aspect ... a business aspect.  It's all well and good to delegate some things to others, but this is the 1st initial step in preparing me for this venture. 

Since I'm going Section 8, another BP member (Section 8 landlord) advised me to not use Zillow or any of those sites.  He suggested I use Craigslist and the Section 8 housing website to list my property.  His reasoning was that a lot of those potential tenants don't tend to see the requirements and I'll be taking a lot of time weeding them out.  I'm going to get a Google # this weekend as we're cleaning up the property so I can get it inspected for approval. 

I like the idea of setting up a time to have a group showing ... kind of like an open house.  I appreciate the information on the "tire kickers" and appointment reminders.  Hopefully I won't get many of them as the list is SUPER long here in DE and I know there is a lot of interest because of the area.  

Your process sounds good as you have to find just the right tenant.  Just because they show up with money in hand doesn't mean they're the best for the unit.  You really do have to take time to find the right person / family.