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.
Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
6y
@David Shiling By in the best area you can with the money you have to work with. If your strategy is long term buy and hold what will stand the test of time is an area where the tenant pool is quality enough to produce good tenants every time you turn the unit over.
Investor · Atlanta, GA · Member since 2015 · 26 posts · 18 votes
6y
@David Shiling. A tenant paid his full security deposit and first month rent. Written on a check by his sister through a trust account. Funds were good. Verified employment. Payments were almost non-existent for the 4 months he was there. He lived with his sister beforehand (late 30’s/40ish). My mistake not doing better checking-(credit check) he presented well. I know now well placed policies protect lapses in judgement (emotions). Have learned. Tenants can make mistakes in their lives but you want to rent to them after they’ve learned.
Realtor · Wellington, FL · Member since 2018 · 68 posts · 47 votes
6y
@Jason Gonzales I am learning this rather quickly. The amount of time spent and the quality of work is just not the same. I have decided to outsource those jobs for sure now and it is also nice since you are also helping another fellow professional in their field. That is why I love real estate because we get money and then we give money to the others in the community and then economy as well!
I included a "pain in the butt" fee for stupid things I shouldn't have to help them with. For example, a complaint about the central air not working and when I arrive it's the complaint is the cold air return isn't pushing out air. It's not supposed to... so "unnecessary support fee" is applied.
In addition to Zillow background and credit check, I interview them as to why moving, how long they plan to stay...I googled how to screen for a prospective tenant and got really good information. And I do call previous landlord and references, verify employment. One lady was indeed mid-eviction!
I do pre qualify by phone as to income requirements, deposit amounts, term of lease, credit and criminal history...ie, I let them know that the checks are required and if they still want to apply, go to Zillow. I don’t make appointment to show the unit unless they pre-qualify.
And I observe them touring the property. Example: one guy who had 2 preschoolers was really nice and positive, but he had to coax his wife out of the car to see the property, and even then she barely glanced at it. I took this as an indication of how she would treat the property, so I kept interviewing other applicants.
That night I was still working on the units and got a call from a guy eager to see it. He was very neat, polite, attentive and had a good job and rental history. He has been a great tenant now for 2 years and plans to get married soon.
If this is your first time managing a property, definitely read Brandon Turners book on managing rental properties. It was a huge help for me the first time and it comes with a lot of the forms you will be using as a manager. I still refer to this book when I have management questions
Remember, nobody looks at the lease when things are going well, it is only used when things are going wrong, so build in a lot of protection for yourself and add in language for any common rental problems (deposit return, pet restrictions, notifying you of any problems, move outs, renewals, etc.)
Pet fees, we charge $250 per pet (up to 2 pets), non-refundable. Important to call it a fee when it is non-refundable and a deposit if it is refundable
Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
6y
First rental - if you decide to sell to the tenant make sure it is for the right reasons and at current market value.
Most important that hasn't been mentioned yet is to be sure the lease penalizes bad behavior including passing on all any costs of ordinance violations to the tenant. so if you get fined for their behavior, they pay.