All Forum Posts by: Josh Cissell

 This is an old post, but I thought I would give a few suggestions here for anyone looking for property management in the future.

Getting a good property manager can make or break your rental investing experience. If you're investing in real estate as a passive investment, it should be hands-off for you. It should NOT be a passive gig for your property manager, too. Unfortunately, sometimes that happens, and it doesn't end well. These are all the horror stories you read about property managers.

Of course, as a management company owner, I will recommend using a full-time property management company. Real estate sales and rental property management are very different ballgames. Both require a real estate license, but the license requirements in Mississippi are focused on sales and have little to do with rental property management.

A rental property is a significant asset, and you want to make sure you have the best manager to ensure years of worry-free investing. If it appears that a company or agent spends a large portion of their time on general sales, you need to ask how much time and money they invest in their property management business. Are they staying on the cutting edge of the property management industry, OR are they pushing hard to grow their sales business? It's difficult to do both. A full-time property manager can handle representing their clients in buying new investments, but that isn't the same as someone whose primary focus is listing properties and representing average buyers who need to be shown properties for months before purchasing.

You also want to make sure you and the property manager you hire are a good fit. A bad fit won't be fun in the long run. If you're the type that wants to be heavily involved and your manager doesn't allow it, you're not going to be happy. On the opposite end, if you want a hands-off approach, and your manager calls wanting your input all the time (a glorified gopher), you should have just managed the property yourself.

As far as sales agents go, you need one who understands the market and will also ensure you get the correct numbers from a property manager who does this daily. You don't want to purchase based on speculative rental rates from other agents. We work with many agents to make sure they have accurate comps for their clients.

I've managed property in Oxford since 2007 and would be happy to speak to anyone interested in the Oxford market.

Josh Cissell

Hey Brett. It's been over a year since you asked this question. Did you ever make a move in Oxford?

I've been managing property in Oxford since 2007 and have gotten calls on this a lot since the Covid boom, so even though it's been a year, I thought I would chime in here.

This is a tough market to pin down for both long-term and short-term rentals. Before getting to the numbers and determining your best option, anyone in your situation should ask a few important questions.

1. Is this an investment that's purely about the numbers, or do you want a second home and plan to rent it some to help cover your expenses and hope for appreciation?

There is nothing wrong with either route, but they are very different. If you want the latter, the numbers aren't that important, and purchasing a short-term rental is probably the way to go. You can always convert it to a long-term rental later, but it would be wise to ensure you purchase a property that would pencil out as a long-term rental if you need to fall back to that strategy.

2. Do you want to own a rental property or be in the hospitality industry?

My company doesn't manage short-term rentals because they're a whole different ballgame. I don't want to run a hotel.

Right now, the Oxford STR market is really saturated. Early this year, there were approximately 900 STRs listed on Airbnb, VRBO, etc... By the end of the summer, there were 1200, and I'm seeing 1500 - 1800 now.

If you want a property to both visit and rent out, don't expect a lot of income because the big events you'd like to visit for, are also the events that make or break the entire year for a short-term investor here.

If you're looking for a great investment, the STR strategy in Oxford likely won't give you the returns you're looking for. There are some exceptions, but those usually involve a significant capital investment very close to the Square and tons of hard work.

The rental market in Oxford, both short and long-term, is very nuanced, so the computer algorithms of rent estimate websites can be very inaccurate. It's important to ensure you're getting good data from someone in this market.

I'm glad to answer any questions. @Hudson Magee would also be a great resource.

I'm in a college town and tourism is our only real industry. That and the University. The University feeds to tourism. All sporting events cancelled, college students are given another week of spring break and now they'll all be sent home from campus after that to finish classes remotely. This town lives off the money that comes in during 8 months of the year with the bulk of that money made in 5 to 6 months. Our economy starves during Christmas, Spring break, and the summer months. Now 3 of the 6 months we make money just became the same or worse than summer break. This will hurt for sure. Our country is so leveraged out this is going to hurt much more than it should.

 I didn't say anything about requiring all of the guts be replaced. I said they should have been. The OP was complaining about petty requests and gave this as an example and complained about having to spend two hours of his time fixing something so minor because he has to drive. Had the OP gone through the home and replaced stuff like this before the tenant moved in we wouldn't be having this conversation.

I know the point of the clause that pushes the first cost of repairs off on a tenant but I think it is BS and will cause tenants to not report small problems that could become much bigger. I've managed hundreds of units, never used the clause and very seldom have someone someone who is a problem. If I do it's because we missed stuff that should have been done. Occasionally we have someone who thinks they are supposed to move into a new property and then I just have to tell them no. 

@Jacob Graves I haven't read the rest of the responses but this is wrong. ALL of the guts of that toilet are old and worn out. The owner should have replaced this stuff before the tenant ever moved in while he was there taking care of anything else that was wrong. This isn't petty. They pay rent so they don't have to take care of this.

He just isn't wanting to be a landlord. I call this being a scumlord. How you treat the property is exactly how the tenants will too.

As said above this is a real thing. I'm allergic to cats and not dogs. If it was in the property every weekend for 6 months there's a lot of hair in there. Go into the property with a flat rubber soled shoe and scrape your foot across the floor like you're trying to dig a hole in the floor with your foot. You'd be surprised at how much hair is probably in the carpet. Shampooing it won't make it better. It'll just smell like a wet animal in the house.

I don't spend tons of time on these forums but occasionally do check in and I also own a property management company so I also have lots of people ask me about investing in rental property. Forgive me if this has already been said but I don't think it can be said enough.

Getting into real estate can be exciting and often times you'll feel the need to hurry a deal up just to get in. Be aware that the economy has been in a long expansion. If you're buying on the high side and something happens with the economy you don't have a lot of room. If you buy in at the beginning of an expansion, even if you get into a bad deal, the timing of the deal will probably bail you out. It's a super fair warning to say that if you're mimicking investors that got started in the last 3 to 8 years, you need to understand they have only been investing an a big expansion. Does that mean they don't know where they are talking about? No, it just means they have not been tested during an economic downturn. Leveraging yourself out and not having much equity in properties may be great now, but not when everything hits the fan. I started in real estate in 2005 so I saw the height of the last real estate boom and I saw LOTS of people lose a lot of money. I saw lots of guys who were making money hand over fist and buying loads of property go under. I saw guys who were worth millions barely get out of it without going under. They were able to stay in it because their pockets were deep enough to sustain them for years, not just a few months.

I'm not saying don't get into the game, I'm just saying make sure you find people who have been in the game during the highs and lows of the real estate cycle and mimic what they do. It's really easy to listen to a guy that started 2 years ago talk about buying 40 properties and want to jump in full speed. But is that guy going to be here if something goes wrong? Maybe, maybe not.

Josh

@Matt Burr we also need to clarify if someone is talking about cash flow on a 15, 20, or 30 year note AND if the plan is to hold for long term once that note is paid off. At that point it becomes a pretty good paying mostly passive income in which the asset can still be sold later. So you've created a business. 10 paid for properties bringing in $1500/month is a pretty good paycheck for very little work.

@Jeremy James Hartman

I'd say that's a good idea but you'll need to be doing enough deals a year to justify it.

@Jeremy James Hartman

Can you tell us your end goals? Why do you want to become an agent?