San Jose, CA · Member since 2015 · 4k+ posts · 3k+ votes
6y
My biggest mistake was renting out my primary home and hiring a PM when I moved out of state. Lost my shirt trusting the PM. Total nightmare. I'd never own out of state again unless I was managing it myself and could afford to travel there whenever necessary.
But, basically, the lesson, in my opinion, is to self-manage. The only time I think it's okay to delegate, would be if the manager was actually your employee and not someone who makes money from your losses. Hire someone as an employee and give them bonuses for helping you profit, instead.
Unfortunately, the way the traditional PM situation/contract is set-up, the PM only makes money when you lose money and have problems. It's not fair for the PM either - why on earth would someone do that much work for only 10% or less of the rental amount? Think about it. It's absurd. Nobody should be expected to do that, and it's obvious why the industry is full of con artists - because it's the only way they can make any decent wage for what they do.
So, hire someone and pay them a fair wage. Or, self-manage, is my opinion.
San Jose, CA · Member since 2015 · 4k+ posts · 3k+ votes
6y
My biggest mistake was renting out my primary home and hiring a PM when I moved out of state. Lost my shirt trusting the PM. Total nightmare. I'd never own out of state again unless I was managing it myself and could afford to travel there whenever necessary.
But, basically, the lesson, in my opinion, is to self-manage. The only time I think it's okay to delegate, would be if the manager was actually your employee and not someone who makes money from your losses. Hire someone as an employee and give them bonuses for helping you profit, instead.
Unfortunately, the way the traditional PM situation/contract is set-up, the PM only makes money when you lose money and have problems. It's not fair for the PM either - why on earth would someone do that much work for only 10% or less of the rental amount? Think about it. It's absurd. Nobody should be expected to do that, and it's obvious why the industry is full of con artists - because it's the only way they can make any decent wage for what they do.
So, hire someone and pay them a fair wage. Or, self-manage, is my opinion.
Realtor · Wellington, FL · Member since 2018 · 68 posts · 47 votes
6y
@Account Closed Thank you Sue, that is a very good point. I am currently about to rent out my own primary residence but I am staying local and trying to learn the ropes of managing my own property.
I appreciate you sharing your experience with me and I also agree with you on what you said about PM.
Verify & do not accept less than full security deposit and first month's rent. If they cannot afford that, there will probably be payment issues in the future. My very first 'tenant' that was set to move in lied about a fire which displaced his family, as well as provided numbers of friends as 'supervisors' at work to lie about his job performance, etc. Another reference on his application texted me about what was going on after their conscious got the better of them. We also verified with the fire department that no such fire had occurred on that street or address provided.
Realtor · Wellington, FL · Member since 2018 · 68 posts · 47 votes
6y
@Cordell Martin OMG that is ridiculous. People go to extreme depths to lie sometimes. Thank you for the advice though I will not be accepting anything less than that for sure. I can see how that can create problems in the future if you don't have it upfront.
@Alex Olson Thank you very much, what would you require in a strong pet policy? And how much would you recommend for a pet deposit?
Make sure you exclude certain breeds. Make sure you meet the pet (or your PM) and make sure you have a weight limit. I also would restrict to no puppies or kittens. You don't want the tenant to be training their animal while living in your apartment unit. Pet deposit is $500 and half of that refundable. Hope this helps!
Rental Property Investor · Westminster, MD · Member since 2014 · 165 posts · 221 votes
6y
@David Shiling
Do not rent to Friends and Family!!! Do a background, credit check, employment verification and call previous landlords. I know this sounds simple, but 90% of problems come from not doing these simple things.
Realtor · Wellington, FL · Member since 2018 · 68 posts · 47 votes
6y
@Patrick McGrath thank you very much! That’s a hard lesson to learn for sure with the family. What system or application system do you use to screen your prospective tenants?
@Patrick McGrath thank you very much! That’s a hard lesson to learn for sure with the family. What system or application system do you use to screen your prospective tenants?
We use Zillow rental manager for application, credit and background checks. Potential tenants pay the $29 fee and you get the report. Has worked for us so far with 6 units rented using it.
- Making sure that the lease contract of your PM does not allow electronic payment like ( creditcard ) or personal checks. Especially not for the security deposit and first month rent. There is a chance of chargeback !
- Don't allow PM to put a tenant in on your behalf, take the time and double screen the tenant. Some PM does not use a complete Backround check. Civil court cases will not show on their report. So invest another 10 USD and screen the tenants personally.
Realtor · Wellington, FL · Member since 2018 · 68 posts · 47 votes
6y
@Michael Thach really good advice. I’m going to be self managing so I’m taking all the necessary steps myself. I did the national search and have been following up with references and such. Do you have a particular one you recommend or use?
Rental Property Investor · Corvallis, OR · Member since 2018 · 840 posts · 1k+ votes
6y
@Patrick McGrath I have tried calling zillow and does not seem to exist. How does the rental manager work, and when all the green boxes are checked does that mean zillow has done background? I use mysmartmove.com and am not sure they are great and I use zillow to market my rentals so I have wondered about this service and how it works.
Rental Property Investor · TN · Member since 2018 · 2k+ posts · 2k+ votes
6y
Keep the rents up with the market, or at least sort of close to it.
Say no strongly when needed-- No you can not repaint the house I just painted. No you can not paint the ceiling black to accommodate you inability to sleep at night. No you rented a house with a claw floor tub, not a built in shower in the second bath: I will not change that. No you can not change out the period appropriate lights into cheap fans. No you can not rent the house with one retired support animal, one support animal and one support animal in training. No I will not put in a swimming pool if you sign a 5 year lease. No I will not furnish the house and let you airbnb it. No I won't reduce the rent for cash payment. All real requests!
@Michael Thach really good advice. I’m going to be self managing so I’m taking all the necessary steps myself. I did the national search and have been following up with references and such. Do you have a particular one you recommend or use?
You can use whitepage. On there I found out that one of my tenant had some civil court judgement with the case numbers. So you can read them up and see if you like to take the risk. The backround check the most PMs do through appfolio won't give them this informations. One backround check just cost like $10. In my case it would have saved me several thousands. So in future I will always run it. The more info you can get about a tenant the lower the risk you have afterwards.
@Patrick McGrath I have tried calling zillow and does not seem to exist. How does the rental manager work, and when all the green boxes are checked does that mean zillow has done background? I use mysmartmove.com and am not sure they are great and I use zillow to market my rentals so I have wondered about this service and how it works.
You log into the app and under applications you will see completed applications. They will verify a persons identity, the background check with show clear for the different offenses or show the criminal offenses they have. Credit check you receive score and on time payment % and debt service % plus any collections.
The app is meant for marketing and applications on your property. You can collect rent as well but we use Venmo. It is not really meant to manage your tenants, maintenance issues and stuff like that.
Rental Property Investor · Boston, MA · Member since 2019 · 124 posts · 121 votes
6y
Have a process in place and written criteria when screening tenants. Stand by your lease. Review lease with tenants at lease signing. Review comparable market rents and price accordingly for your unit and what it offers. Price to high, minimal bites. Price too low, everyone comes out of the woodwork to apply.
Real Estate Broker · Kansas City Metro · Member since 2015 · 2k+ posts · 1k+ votes
6y
@Chris C. That way when they try to sue you for something that another tenant did or getting broken in to they have coverage and you are not getting sued personally. HOpe that helps!