I am buying my first place in Bronx and under contract on a three family and will be living in one of the units. I have a few duplexes in Atlanta but this will be first one I have lived in and managed myself.
Does anyone have an opinion on if it is better to market on your own or use a realtor/broker? Also, does anyone have any suggestion on the best leases to utilize?
Also, if anyone have good lessons learned on doing this in the Bronx, more than willing to buying a cup of coffee if anyone would like to meet up and discuss.
Where in the Bronx are you located? This may play a factor. I have always had luck with Craigslist and Facebook (Gypsy Housing etc.) and have never used a broker. I like to be 100% hands on - a broker may be more interested in sealing the deal and collecting his commission than finding you the best tenants. This is very important - especially when you live in the building with them.
You would need to look at what area you're in the answer the question about brokers. The broker will charge a broker fee so if there are a lot of no fee rentals in your area I would just advertise myself. On the other hand if everyone is using a broker then you can as well. It saves yourself a lot of trouble. It all depends on your competition. As for leases, my broker provided me one but you can just look up a template and make adjustments.
As for lessons, you need to be more careful with tenant screening. New York is a tenant friendly state so if you get bad tenants it will take months to evict them. Look for someone with a stable job and make sure to verify. I have had people give me falsified documents. You also should ask for their 2 previous landlord's contact information. I would visit the place they're living at now to check what their living conditions are now and if they take care of it. You should contact the landlord of the property that they lived in prior to the place they're living in now. The reason is if they are bad tenants their current landlord will likely lie and say they're great to get rid of them. Their previous landlord will more likely give you the truth.
Hope that helps
In the Bronx most tenants expect to pay a Broker Fee. If as the landlord you can save time by having to answer every single tenant call, going through the qualifying questions, getting all the documents, etc... why wouldn't you. If you truly would like to do it yourself, make sure you use craigslist, facebook, zillow, trulia, apartments.com, a sign in the window, good pictures. You want to drive as many potential tenants to your apartment as possible to get the best one. Stick to a qualifier, set a minimum income such as 35 times the rent, minimum credit score such as 650 and no delinquencies in the last 3 years, no landlord and tenant court, at least 2 years work history, etc... Biggerpockets http://get.biggerpockets.com/forms/index/ has leases available, you can also look up online places such as legal zoom, law depot, and others. If you do work with a broker understand, you set the tone, you set the criteria and let them know that you will interview only those qualified, like that you are not wasting time. Good luck, hope this helps.
Hi @Ryan C.
Brooklyn RE agent here. I agree with @Ceasar Rosas here. Ultimately it's you who has the decision power over who you'll let live in your units, but let a broker and his agents do all the hard work. Especially if the Bronx market is a fee market, meaning the agents will collect the fee from the tenant, meaning it'll cost you $0.
Here's why it's worth it:
1. you'll save a lot of TIME. I market my landlords' properties and find them tenants for a living. I get about 100 phone calls and texts a day. It's a lot of work that you might not want to do. A lot of the calls are a total waste of time. After closing hundreds of deals I can usually tell within the first five seconds whether the caller is serious and whether they qualify. This is something that comes with experience. Also, no matter how much you pre-qualify applicants on the phone and confirm with them before showing the property, no-shows are still a reality. I just drove 40min to a property in East Flatbush late last night (instead of spending time with my wife) just to learn that the client won't make it after all. An hour of my time murdered. Thank God we have the BP podcast to listen to while driving...
2. you'll save a lot of $$$. Advertising costs alone can run in the hundreds a month for a single unit; StreetEasy now charges $3/ad/day; that's $90/month for one ad only! Another $175/2wks, or $350/month to 'feature' the ad; that's $440 in advertising costs for one unit only, on StreetEasy only (they do have the monopoly nowadays)! Then there's NakedApts, Zillow, Trulia, HotPads - you name it; all these portals charge money that you'll have to pay out of your pocket if you do it yourself. For us agents, this is just the cost of business. Add credit and background checks (we charge $75 per credit check) and the costs just keep adding up.
In order to be successful on CL, you'll have to post 20-30-40-50... ads per day. I have a guy post 100 CL ads per day 6d/wk for me; that's 600 CL ads per week, every single week, and all of these get flagged within hours. And obviously I've got to pay him for that. Doing it myself, I'd be posting ads 8h/day... The competition is fierce. If anyone here has cracked CL flagging (I think I've tried it all over the years), please PM me.
3. brokers and their agents cast a much wider net when looking for tenants, as they're advertising other similar apts in the same area and/or price range, and can thus bring you customers who initially inquired about another property. It happens very often that a customer contacts me about apt A but after showing him/her BCDE they end up with apt F.
Good agents who've been in the business for years are good for a reason. They get business because landlords trust them with finding them good tenants. It wouldn't behoove me pushing you a bad tenant, as I'd never get business from you anymore. We think long term and love long term business partners. And, don't forget, ultimately it's you who makes the decision on which tenant to approve or not approve. Your realtor will simply present you a qualified file (good credit, proof of income, landlord references, etc.) and you'll say yes or no and then it's just sign the lease and give them keys. Easy and simple.
In Brooklyn, the standard minimum credit score is 680 and not a tad below, and minimum income requirement of 36 x monthly rent. Used to be 40 x and some landlords still require that, but it's come down. My experience is, credit is more important than income. The fact that your tenant makes a million a year doesn't mean they pay their bills. My earliest lesson in approving tenant was: credit is king. Credit doesn't lie.
Good luck finding a good realtor and having good, long term tenants. I bet it's worth having a chat with Ceasar as the Bronx is his market.
@Ceasar Rosas great post nailed it!
I strongly recommend using a broker. Happy to provide a referral to a stellar agent that knows the BX market. Since you will be owner occupied, you want to start training tenants from the beginning. I also recommend using Cozy for management & rent collection. No "Come get the rent check" texts!