All Forum Posts by: Krishna Chava

In my opinion, one of the toughest balances in optimizing performance of a property is how high should the rent be. Too high is high turnover and too low is losing money.

I manage my properties and constantly struggle with this decision testing the market at different rents as vacancies happen. I am sure a good property manager handling some one else's property would do the same. But I don't see a mechanism in which they get paid for that effort if they just get paid a fixed percentage of rent. 

In short, does a property manager role without asset management responsibility make sense? Love to hear from property managers and owners alike.

Agree with @Thomas S. though I haven't been as rigorous about practicing that advice myself. I have extended several under market rent leases and continue to do so for some of my elderly tenants on fixed income. I do however raise the rent by $25 to $50 every year and point out that we are leasing under market. I manage my own properties, so I have this discretion available.

For other long term tenants, I give a notice of large rent increases at least 4 months in advance. If they find a new place that suits better, I promise them to let out of lease early. That way, I have already reached a middle ground with them and they don't see me as a hard nosed property manager. So far, everyone renewed and no one moved out.

I am placed in similar situations almost every month and I am still learning from my decisions. One word of collective wisdom from biggerpockets is that, whatever your late fee policy is, be consistent with that policy in dealing with all tenants. Don't make a case by case policy.

In your case, I would collect $100 of late fee ( my late fee are 50 + 5 per day) and allow them to pay on 15th. 

I would manage myself for at least an year before handing off to a good property manager. Would never choose a property manager whose sale pitch is that he can do it for less percentage than others. You get what you pay for; learnt the hard way.

@Alec McGinn, I agree with your sentiment. I too buy properties that a rehabbed and ready to rent (Someone else's flip). We don't have to choose between two polar opposite choices of beaten down "investor specials" and full turnkey. There is a lot of middle ground. I don't have time or skill for rehabbing homes. I am a long term buy and hold investor and concentrate my energy on keeping my properties fully occupied with market rents. 

Thanks for the post. I have been experimenting with STR on AirBnB for about 4 weeks. So far, only thing I am doing different from others in the area is allowing 1 day stays. This brings in extra income but it's extra work.

@Johann Jells Thanks for the insight. You are right, all my experience is with slab foundations. That's all I can find in Dallas though I hate them esp when there is sewer issue that needs drilling through slab.

@Ryan Blake, agree it's not easy to find good cash flowing rentals in this market, but I found some in Forest Hill and Fort Worth in 2017 and early 2018. I find properties that are in good condition but rented under market and gradually rise rents by adding value to tenant with upgrades. It takes about 1-2 years to see any cash flow, but this strategy worked well for me. 

Wouldn't advise anyone to flip in Dallas market at this point. I know 2 investors who lost money trying to do that in 2017. This year, barrier is higher. There are still opportunities for buy and hold though.

Thanks for sharing. This is good news for real estate investors irrespective of whether we like STR or not. HOAs and condo associations have the power to make investor life miserable with their unpredictable bylaws. I support taxing and making STRs pay for hotel like use, but banning outright is bad precedent.