All Forum Posts by: Greg Weik

Hey @Brandon Obrien, the "no contact with the tenant" clause is reasonable and common.  We have one and we will cancel with a client who does not abide by those terms.  I've been doing this a long time and any client that goes behind our back to talk with the tenant is throwing a wrench into professional property management.  Here's what goes down if the landlord and tenant can talk:

-Tenant tells the landlord how wonderful the tenant is.  Tenant indicates "improvements" they've done to the home and how they want to stay forever. 

-Tenant likely tries to throw PM under the bus - not because PM is doing a bad job, but because the tenant knows that landlord is far likely to be sympathetic to things like late rent, adding a puppy, breaking the lease later, etc.  Tenants often try to pit the landlord against the PM.  

-Landlord may tell the tenant they can do alteration(s) that tenant requested, even though said alterations are high-liability actions, such as repairing a deck, finishing a basement, etc.  The tenant may have convinced the landlord they are a "contractor" and happy to do these things.  The landlord has no idea what the implications are from a legal standpoint, what the lease says, etc.  The landlord just sees "free improvements" and gets excited. 

-Tenant tells the landlord they are going to be late, landlord "forgets" to tell the PM, who has to go post a demand notice and PM has to follow up with the tenant only to find that the landlord "allowed" this lease violation, undermining the property management company. 

There are so many instances like the ones above that I've personally witnessed that it's not worth typing all of them here.  If you want to self-manage, then self-manage.  But don't hire a professional PM company and then try to backend the process by communicating with your tenant. 

As for not providing you with their management agreement, that's very suspect.  They should be proud to send it over to you even without your requesting it.  Transparency is extremely important in the property management world - find a PM who shoots straight and has nothing to hide and who isn't just trying to "sell you" on the spot. 

I think it depends.  Do you like your tenants? 

I also have 3 SFR rentals and I like my tenants. Annual lease renewal inspections indicate they all take great care of the properties and they pay on time. Therefore, no rental increases. If I had tenants who were a pain, didn't take care of the property, whined about every little thing, and I didn't care if they moved out, I would make sure rental increases match the market.

I disagree with @Joe Splitrock that tenants are expecting rental increases.  The 500 doors and nearly 15 years of experience I have doing this suggests that many - possibly most - tenants (especially good ones) do not expect rental increases.  We've had plenty of tenants move out over the principle of a rent increase, especially if what they are currently paying is within market parameters.  My clients have the power to overrule our recommendations on lease renewal rates, and often doing so is at their peril. 

There is more to life than squeezing every penny from your investment property.  Tenants have costs that go up too, and their income doesn't always keep up.  The renter class is widely varied, but these are not high net worth individuals.  If you're a landlord who can give a good tenant a break in the form of the same rent each year, then I say do it.  

It's not "business" to your tenants, after all.  

"KetoWave: After 1 cup of this before bedtime, your body will burn fat like crazy! rdula.me/F2RyywhEll Recommended by SharkTank Judges!"

KetoWave, who knew?!  Well, obviously, I mean besides the Shark Tank judges. 

In all seriousness, yes, stop spamming people.  The text message is the last sacred medium of communication! 

Hi @James H., Propertyware does all of those things and is a scalable solution.  You purchase tiers for the monthly subscription and it's reasonably priced for what it does. 

We use to run Buildium, but that software pales in comparison (for many reasons) - we've been using Propertyware now for about 10 years and it works well.  One of the things I like the most about it, is the customization aspect.  You can create custom fields for any property, and the ability to track maintenance and other notes is really useful.  

Where did @Jacob Stokes go?!

@Nick Scullin I actually would have the opposite concern with lower rental rates.  The people in the Denver area (and, I suspect, most metro areas) who can afford $2200-$2800 tend to have more stable jobs. It is a really important part of the screening process - knowing what you're looking at when verifying income and employment. 

One of my tenants is a truck driver (pretty stable, at least before the autonomous trucks go online!), one couple works in insurance and property management (two of the most stable industries), and another is a couple with a brother where all 3 have income.  

Those are just my personal properties, but in our managed portfolio of other people's properties, the small handful of unpaid rents are from self-employed tenants and a guy who worked in construction.  

Just be careful also, in Colorado and probably other states, you can't discriminate based on the source of income.  If someone comes to us as a server in a restaurant, we can't ask for a larger security deposit even though we know their source of income is higher-risk.  Like a lot of bad legislation, this was designed to keep landlords from avoiding Section 8 tenants, but now that we've seen what a pandemic can do to certain industries, that could make finding the right tenant more difficult. 

I think your head is in the right place and more expensive is better (within the parameters of the variables you alluded to), for exactly the reasons stated.  Higher rents and more realized gain in equity.  

To put it another way, 2, $200k duplexes vs. 1, $400k duplex.  The cashflow math might suggest the 2 duplex option, but that is usually missing the forest for the trees.  Two sets of systems (HVAC, appliances, plumbing, etc.), 2 sets of tenants and possible tenant issues, etc.  I usually explain it in the "5, $100k condos or 1, $500k house" - and most people think the 5, $100k condo is the smarter play, but they are mistaken. 

I personally go for higher-end single-family homes that rent near the top of the market, but still at a price point where there are a lot of qualified renters.  

Hi @Russell Schwartz, you can terminate a m2m lease, this is not part of the eviction moratorium. 

Research your state laws on the necessary notice period, and give the tenants as much notice as possible. 

If you post a notice of non-renewal, and the tenant does not vacate by the end date, you will then have to post a notice of non-compliance and move forward with eviction.  This, too, would not be covered by the eviction moratoriums we've seen - as those are based on non-payment of rent, not other lease violations (like failing to vacate.)  

Hope that helps. 

Hi @Evan Scott I can relate to your situation.  Coming up with the 20-25% down payment (usually plus 6 month's cash reserves) is a heavy lift.  

IMO, if you are confident in the type of appreciation you will get from buying a $650k single family, then yes, use your 401k to finance the deal.  If you have to put $130k down to make it work, but the house appreciates 10% after 1 year, that $130k made you $65k.  To me, this is concept is > than the 1% rule so many talk about, and it's what I personally use when investing.  

Down the road, you can pull some equity if needed and repeat the process for your next single-family and so on.  Bigger (more expensive) houses mean more equity build-up, faster. 

@Jon Q. - if you have the tenants on the same lease and "joint and several liability", then it's not rent by the room.  It's a single lease for the home.  Lease dates for rent by the room are inherently different, rooms are different, some people rent parking in a garage, etc. -- they  have to be independent leases, managed independently.  The overlap is the house rules that everyone signs onto. 

@Tom Wagner - My experience in the rent-by-the-room world is limited.  We have a single client currently with a 6 bedroom home in Arvada that we are working on.  Denver area rents (by the room) tend to range from $650-$800 depending on the location of the home and room size and parking.  That range assumes all utilities (including internet) included. 

As @Jon Q. said, I don't think house hacks are worth it, even from my limited exposure.  It's like running MTV's "Real World" only no one wants to be a contestant.  It's a classic "spreadsheet investor" pitfall.  The numbers on paper look incredible, but in practice, it's almost impossible to maintain full occupancy unless you're an owner-occupier.  The room rental prospective tenant is a very different tenant from the long-term tenant I'm accustomed to.  Working with room rental tenants - in my experience so far - is like herding cats.