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.
Investor · Almont, MI · Member since 2015 · 360 posts · 302 votes
6y
Find your county's court record website and look up every adult applying for a rental for criminal and/or court records. Also , do not trust that any background check done by an outside vendor is complete. If they don't find anything I alway double check to make sure that is true. If they find something negative then I don't have to go any further...denied! Finally look up potential tenants on FB to see if they self report any interesting/bad behaviors. Bad tenants usually have long bad histories I've found.
Realtor · Wellington, FL · Member since 2018 · 68 posts · 47 votes
6y
@Brian G. I literally can't thank you enough. I've heard the term a million times and failed to look up what it was. But now I understand it. Thank you so much!
Investor · Glastonbury, CT · Member since 2020 · 14 posts · 0 votes
6y
@David Shiling
I’m realtor in northeast of Ct, Just joined the Bigger pocket not long ago, we use website / App called soft screen, the potential tenants pay for the application ( I think 50$), and you will get full reports , check it out, good luck!!
Investor · Miami, FL · Member since 2013 · 377 posts · 258 votes
6y
Place all "Do's and Don'ts" in the lease and Be firm! Establish, in the beginning that you are fair stick to the guidelines of the lease. You should also get their parents to sign the lease to hold them liable if they are going to be the ones paying you.
In short - spend some money up front and ensure you have reserves, self-manage for a year to learn how to manage (and what your next PM should and should be doing), and account for everything in your analysis including property management. Above all else...if a property seems solid, you bring it here and a respected investor walks through the analysis and shows you why it's solid, and you're buying the property as a "deal" e.g. undervalued...you've got to take the plunge.
Investor · cedar lake, IN · Member since 2017 · 32 posts · 18 votes
6y
Ask to see their current residence as part of the interview process. What their current place looks like is what your place will look like in a year. Do not believe the stories that the landlord sucks and doesn't repair things and other stories to explain why the place looks like trash. While there are bad landlords there are more bad tenants. Stains on the carpets, holes in walls probably didn't exist when they moved in, if they did, they should not have moved in.
Huntington, WV · Member since 2016 · 40 posts · 45 votes
6y
(For me) Avoid properties with wells. I've had nothing but problem after problem after problem with a well system. The fix for one problem (i.e. tannin) creates an entirely new pro lem (i.e. chlorine injectors), etc.
I'll still buy a property with a well, but I'll greatly increase my capex and monthly expense calculations before I count cash flow.
Investor · Bethlehem, PA · Member since 2016 · 929 posts · 951 votes
6y
Don't be afraid to negotiate the price the day of closing if conditions are drastically different from the time you agreed to a purchase price or had an inspection.
My first purchase, was a 4-unit property. During the initial showing, I only saw 3 of the units (which is common to not see all units). The seller indicated the 4th unit was unavailable because the tenant was packing things up and preparing to move, but the seller assured me the unit is in good shape. I went forward with the purchase. Low and behold during my final walkthrough, 30 min before closing, the 4th unit was in rough shape. It ended up requiring an additional $8k+ worth of work to redo the bathroom and kitchen.
It was still a great deal, but in hindsight, I would've asked the seller for an additional $5k+ at closing for the unexpected damages.
Investor · Almont, MI · Member since 2015 · 360 posts · 302 votes
6y
@Andrew Varney I hear you...up here we don't have problems with our well systems, it's the septic tanks that can be costly especially if the previous owner neglected maintenance. In fact always get eyes on the septic or sewer system for a property...meaning find a trusted drain or sewer guy/gal and get them under the house to inspect from toilet all the way out. Sewage and water damage has been an issue with at least 30% of the properties we've purchased. But once they are fixed properly it's smooth sailing.