House hacking and becoming a landlord

[Frances Cue]

Hi folks, 

We are under contract and hoping to house hack a multifamily. Currently there are two tenants in placed. I'm considering not hiring a property manager since we will be living on one of the units but I'm afraid that if the tenants find out we are the owners (and we are also brand new to the city, still reading up on landlord/tenant laws for MO), that they might be able to take advantage of us. We are new to all of this and I really would appreciate any feedback or input. Do you think for newbies like us, it is safer to hire a property manager or just learn it ourselves? I am leaning more towards learning the ropes ourselves but I am also very afraid and anxious. 

Thanks!

[Randall Alan]

Quote from @Frances Cue:

Hi folks, 

We are under contract and hoping to house hack a multifamily. Currently there are two tenants in placed. I'm considering not hiring a property manager since we will be living on one of the units but I'm afraid that if the tenants find out we are the owners (and we are also brand new to the city, still reading up on landlord/tenant laws for MO), that they might be able to take advantage of us. We are new to all of this and I really would appreciate any feedback or input. Do you think for newbies like us, it is safer to hire a property manager or just learn it ourselves? I am leaning more towards learning the ropes ourselves but I am also very afraid and anxious. 

Thanks!

@Frances Cue

We have 37 rentals… I think you are missing understanding the power dynamic between an owner and a tenant.  It is little different than say the respect a police officer is given.  By being the owner you are the one to call the shots.  Once you introduce yourself as the owner, as long as you abide by the terms of the current lease and state laws, your Tenant should respect your position as landlord.  If they don’t, it is your option not to renew their lease when it comes up for renewal.  They know that, so it is the reason why you won’t have any issues barring tenants who don’t know any better or who aren’t being smart.   Part of your job will be to explain (nicely hopefully) how you want things done under your watch and hopefully they abide by that.  

At the same time, being new, you need to understand that they are paying good money monthly to live a normal life  (as much as possible) without interference from you (their landlord - and now - next door neighbor.)  So it is a balancing at of you both respecting each other.   

As for turning that over to a PM company, that would be a waste of money in my mind.  Landlording is just as easy as you managing your own house today.  AC goes out, you call the AC guy, etc.  You just handle things as they come up.  Why pay a company 10% of your gross income to do that, when it’s such an easy task.

One thing I would recommend to you, as a newbie, is to invest into a cloud based property management software. They cost just a few dollars per tenant per month usually, and it simplifies a lot of your tasks. For us, it collects all of our rents, deposits it into the bank, it broadcasts our vacancies, screens the tenants, accepts applications, tracks leases, tracks expenses, applies late fees, let’s tenants report maintenance issues, and so forth, and so on.  We use one called Rentech Direct, and it works very well for us, but there are many of them out there.

All the best.

Randy