Purchased Property, Now looking for Tenants

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Purchased Property, Now looking for Tenants

Marlia Stone
Rental Property Investor · Member since 2018 · 61 posts · 33 votes

Hello BPs,

I thought I should update everyone on my journey. I finally purchased my first investment property in Philadelphia. The costs wasn’t too bad during the process and it went pretty good for my second go around.The property needed minor changes such as, a paint job, new bathroom tiles, deep cleaning, etc. overall it was turnkey ready.

I am currently at the point to being almost finished the minor adjustments, and I am in the process of searching for tenants. Do you have any advice on where to look for tenants, or how to go about it if I were to manage it myself? what to ask tenants prior to acceptance ? What demographic is the most risk? Or Should I work with a property management group?

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Abel CurielBusiness Member
Real Estate Agent · Queens, NY · Member since 2016 · 2k+ posts · 1k+ votes
5y

Good morning @Marlia Stone & congrats on your recent deal!

Property management is one route to consider but if you're going to manage the property yourself, I'd recommend going with a local Realtor with experience in the rental market. 

The Realtor can handle all of the time consuming work but still walk you through the process so that you can learn from it. 

The Realtor can:

  • - take care of marketing the apartment on MLS and third-party sites
  • - coordinate and attend all apartment viewings
  • - pre-screen prospective tenants (i.e. collecting financial documentation)
  • - collect and review rental applications
  • - coordinate tenant interviews (once you've found an application worth pursuing)
  • - coordinate lease signing

In my market, tenants sometimes pay the Realtor fees so all of the above could possibly be done for you free of charge!

Best of luck to you moving forward!

Abel

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    • Marlia Stone
      OP
      Rental Property Investor · Member since 2018 · 61 posts · 33 votes
      5y

      @Matt Bishop Thanks Matt! How long have you been investing ?

      0Reply
    • Rick Albert
      Real Estate Agent · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes
      5y

      Congrats on the purchase!

      I just rented out my second unit.  Here are a few things:

      1. Most of my tenant leads came from Facebook Marketplace and Zillow.  One of my investor clients gets a lot of leads from Apartments.com.

      2. In my experience, I got a lot of flakes.  Therefore I started booking everyone to come at the same day and time, no wiggle room.  I would tell 20 people to come at one time and I would be lucky if 2 showed up.  Your time doing showings will get sucked.  

      3. There is no demographic better or worse.  It is also illegal to discriminate.  Focus on what's on paper and your gut.  

      4. Some here mentioned hiring a Realtor.  To be honest, not all Realtors are great or even good (and I'm a Realtor so that's saying something).  The main advantage is all of the showings and paperwork falls on them.  This includes the lease and disclosures.

      5. I would send prospective tenants expectations up front to avoid time wasting.  

      Good luck!

      0Reply
    • Beau Watson
      Rental Property Investor · Atlanta, GA · Member since 2019 · 90 posts · 73 votes
      5y

      @Marlia Stone

      Great questions.

      I’ve used rentec for almost two years now.

      I don’t really have a “most difficult”. I come from a management background. I just quit a job where I had 270 people I was responsible for. So my few tenants issues seem like nothing.

      Most recently though, I had a couple break up. The guy moves out. She stops paying immediately. They put a pool in the back yard (I’m paying the water bill) the spicket is leaking. They didn’t tell me about it. Have no idea how long it has been going on but it was spraying inside the wall of the home. When I finally got her to move out 3 months later. She locked a dog and cat in the house for days with no one there. My carpet that was 5 months old. Ruined. Between refresh of the place, contractor, back rent, she owes me around $15k.

      Now ask me if I still like REI? ABSOLUTELY! This home once I do get someone awesome in Will cash flow around $600. Hard to beat that! And the refresh I did… only brought up the over value of the home. Just be ready with reserve money for these situations. Haven't been paid in 5 months and spend over $8k that I wasn't expecting.

      1Reply
    • Judy Parker
      Rental Property Investor · Closter, NJ · Member since 2015 · 884 posts · 722 votes
      5y

      Marlia, if you are new at this, let a Licensed Realtor handle tenant acquisition. With the Eviction Moratorium, showings, background/credit checks, legal documents required (such as Lead Paint, Wire Transfer Disclosure, Megans Law, Child Window Guards, etc.) Lease Preparation and weeding out sketchy tenants, it is imperative that you prequalify any prospective Tenant(s). Realtors can handle all of this for you, and thus help you avoid what could be a very costly mistake. Your time is too valuable so Delegate!

      0Reply
    • Michael A.
      Investor · Richmond, VA · Member since 2016 · 164 posts · 114 votes
      5y

      @Marlia Stone Lots of good advice - just want to say congrats on your first!

      0Reply
    • Kevin MoyerBusiness Member
      Property Manager · Philadelphia, PA · Member since 2019 · 270 posts · 302 votes
      5y

      @Marlia Stone congrats on the purchase. I see you're getting a lot of response from people all around the country. This is great- but Philly is a unique market and things don't really work the same around here.

      I'm a full-time property manager in Philly and I've been doing it for years. Virtually no one uses realtors to lease rentals. It's just not really a market in Philly. For a few reasons I can get into- I think this is your worst course of action.

      People have also mentioned Facebook Marketplace for advertising. I've sifted through thousands of leads and I will say Facebook tends to bring in the lowest quality leads in Philadelphia of all major marketing sites (Zillow/Trulia/Hotpads/Apts.com)

      I am a big proponent of self-managing 1 unit if you're local and willing to put in the time to learn the process. There are a few great free tools to list your property that will syndicate to most major listing sites (avail.co). They also offer tenant screening services. Zillow lists your first property for free. 

      Search on BiggerPockets for Philadelphia lease requirements. There are a good amount of legal requirements unique to Philly you'll have to include in your lease agreement. 

      Taking the time to learn these things, get a feel for screening, understand the move-in process, handle maintenance, etc. will give you a good grasp of the logistics behind management. This will help you down the road when you want to expand your operation and bring in a professional management company. 

      Best of luck DM me with any Philly-specific management questions. 

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    • Sheryl Sitman
      Rental Property Investor · Philadelphia, PA · Member since 2015 · 480 posts · 362 votes
      5y

      @Kevin Moyer has given you valuable advice. Philly has its own set of laws and regulations and anyone who thinks those do not apply to them and their single property can end up in legal and financial trouble.  If your strategy is to jump into being a housing provider and make it a part time of full time career move than jump in and learn it all. If you want to be a professional investor, consider leaving the property management part to a good property management company. I see how small landlords try to save that 6-10% monthly fee and end up costing themselves much more, not to mention the time commitment. I prefer to spend my time developing other parts of my investing and leave all the tenant placement and management part to the people who have already done it thousands of times.

      0Reply
    • Wale LawalBusiness Member
      Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
      5y
      Originally posted by @Marlia Stone:

      @Wale Lawal Thanks Wale! How do I target realtors that will help with this?

      Below are basic conditions and criteria I look for before I even review the tenant application:
      - Minimum credit score of 650

      - Minimum 1 month Security Deposit

      - Tenant(s) are required to maintain renter’s insurance

      - Minimum 1 year lease agreement

      - Non-refundable application fee of $40 per adult over the age of 18 paid directly to TransUnion for background screening

      - Pets are on a case by case basis and tenant must pay for each pet monthly rental (max of 2 pets) or add the cost to the rent
      I run a background, credit, criminal, and eviction check on all applicants through TransUnion SmartMove paid by the applicant.

      You can get quality tenant yourself but you will have to do a lot of work since you are fearly new to this.

      I will suggest you get a great local realtor to help you screen and rent the property. Do a 1-year lease at the beginning and renew with the tenant after that if you still like them.

      You can find local Rockstar Agents here: https://www.biggerpockets.com/... Put your Zipcode there and BiggerPockets will match you with top 3 investor friendly local agents. 

      Note: 

      These agent may be too busy to do rentals so ask them for another agent they trust so you can work with that referred agent.

      Asking why you need an agent?

      • - Real estate agents are experts in their field, and can help you negotiate the terms with you potential tenants and screen out the unqualified rentals so you can have a quality and happy tenants.
      • - And not just the actual price, but they will help you navigate the many steps involved in the process
      • - You are not legally required to use a real estate agent to help you buy or sell or rent your home, but transactions involving agents typically go smoother and faster with your agent advocating for you.

      Goodluck.

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    • Jordan Sand
      Investor · Seattle, WA · Member since 2016 · 87 posts · 30 votes
      5y

      @Marlia Stone - congrats on your investment! i agree that there are a lot of headaches when you manage on your own. you may want to still be involved in your management but not have the repair headaches and stuff. 

      have you checked out Hemlane for management? It is sort of between full service and DIY as you get to select your level of involvement. I use it and can't rate it high enough. 

      0Reply
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