All Forum Posts by: Anna Sagatelova

Definitely don't ignore it!

We avoid the situation by never charging more than 1 month of rent as SD - we even stopped charging pet "deposits" and now only have pet fees.

@Dante’ Wray good luck on your journey as well.

I am not qualified to give tax advice - I am an employee of a licensed management company and have no experience in self-managing any rentals, nor am I an accountant.

There are many guides to self-management out there, including resources here on BiggerPockets, but there is not one formula or schedule for you to follow. You want to create a guideline for things such as, what kinds of maintenance requests are deemed "urgent" or "emergency" - and how will you handle those differently from an "ordinary" or "non-urgent" request? Who will you dispatch if an emergency request comes in at 4 am? On Christmas morning? While you are on vacation 3 time zones away? 

Reading these forums will give you ideas of what kinds of scenarios arise and then you can think of what to prepare for. But you won't be able to prepare for every possible situation - this is why I also advocate for organized and consistent documentation as well as a trusted attorney.

There should not be any issue regarding being up front with the criteria you would use to screen an applicant, so long as the criteria you are using does not run afoul of any federal/state/local fair housing rules or other applicable laws.

Some jurisdictions do have rules about using credit score, or what your maximum income requirement could be. 

More important than your bank account (if you are self-managing only, and not providing services as a third party manager), are your procedures and documents. 

As a landlord, you want to have procedures established for each task you will be performing (rent collection, marketing, showings, leasing process, move-in day, move-out day, maintenance calls, utility switches...) in order to treat your tenants equally and fairly. You will also want to document everything to keep yourself protected.

My recommendation is to work on organizing yourself first. Make sure you are well versed on your responsibilities and local, state, and federal laws (landlord tenant, fair housing, etc). It's shocking how many investors are unaware whether their municipality or county requires a rental registration/license, or of laws pertaining to security deposits and late fees in their city or state.

Get your lease and all addenda organized and vetted by a LOCAL real estate attorney. Local meaning not just to your state, but to the municipalities (and thus housing court jurisdictions) where you will be operating.

Make sure you have an attorney you would feel comfortable contacting with inevitable questions about enforcing some part of your lease or complaints from your tenants. Hopefully it doesn't come up, but if it does, you want to have a reliable and experienced professional in your corner.

Most importantly, be ready to understand that while this is a business for you, for your tenants it is their home - their shelter and most personal space. You will need to be able to strike a balance of professionalism and compassion to truly succeed. You do not want to get wrapped up in your tenants' personal dramas, but you also don't want to wind up as one of the horror story landlords that doesn't seem to have a beating heart. Having processes outlined before you put your first property up for rent will greatly help with this!

Good luck!

I think @Lane Kawaoka provides a very helpful guide, but I will caution that the "property classes" breakdown, especially based on the age of the property, will absolutely vary by your market. Here in Cleveland, we have such a disproportionate number of old properties, that have been rehabbed so extensively, that age is just one of the factors in determining class. There are many 70-100 year old properties that have been rehabbed and upgraded to have top-level amenities.

@Susan Tan our company does not manage in Ashtabula. If you are coming up short on PMs, please be careful about hiring someone to manage for you - in Ohio, one must be a licensed real estate agent to work as a property manager. The only way around it is if you self manage (manager has ownership interest in the property) or the manager is a W-2 employee of the property's owner (whether that's you personally or your LLC).

This is not legal advice, but as a PM who is a licensed agent and who works for a licensed brokerage, I am aware of the rules I myself am subject to, and unfortunately see many OOS investors who are not aware and end up in bad situations.

@Rebecca G. are you saying you are familiar with the Minnesota moratorium? 

@James Hamling did a pretty good analysis and I agree that it takes solid communication and negotiation skills to pursue your only available remedy at this time. Chat with your attorney about it.

@Sachin Maskey respectfully, their monthly fee is not for doing nothing. All PMs charge a monthly fee and that's to interact with your tenants and collect your rent.

If you didn't agree with them charging separately for maintenance (doing repairs to your property, not theirs, that surely the labor and materials costs for would exceed 8% of your rent), why did you sign a management agreement that agrees to such a structure?

It's not a mindset, it's a business, and if a given PM's business and pricing structure doesn't work for you, just don't sign the contract. What you are suggesting is not a win-win situation, it's a PM going out of business, although what is your alternative? Do you have the time to go and deal with the tenants, collect the rent, go out and perform the repairs yourself or find a handyman who would (and who doesn't charge a trip fee?) If so, you should pursue that option.

If your PM is charging you anything outside of what was agreed to in your contract, then you definitely need to bring that up to them, but it sounds like you were aware of their fees.

Another vote for petscreening.com here - reading the comments and advice on this topic makes me cringe and is sure to wind up in several Fair Housing lawsuits if any of you follow it...

Do they have a minimum trip fee just for coming out?

Did they have to purchase parts (sounds likely if they're replacing anything)?

It's a cheap part and not a difficult repair, but you have to pay for their time, and it's not uncommon or unreasonable for PMs to have minimum trip fees.