All Forum Posts by: Kris Mann

I use Avail, which Syndicates to the Zillow network (including Trulia and Hotpads), along with a few other sites. I recently did a count on the leads; about 80% of the leads came from Zillow. I think Zillow is a no-brainer for me. While Zillow is a paid service now, it only costs $20 for the 2 weeks that I need to fill a property. Given that my rents average $2200 ($75/day), paying Zillow is totally worth it if it means I can fill the property even a day sooner. Not to mention, I heard that Zillow's paid service now includes free tenant screening, though I haven't use their tenant screening yet. 

Just one of my tenants has a small dog that she acquired after moving in. I did not charge a deposit, but charge $40/month. But I think non-refundable deposit plus monthly per fee makes more sense. The amount will largely depend on the class of the property and rent. Adding $50 to a $800 rental is a lot harder than to a $2800 rental. 

A lot of these guys on the side also work for the big companies full-time. So you are getting the same skills without the overhead. He may not be able to give you the kind of warranty and warm and fuzzies as the big company, but for the most part you will get the same service for a lot less. I agree with @John Teachout, brands may not mean a whole lot.

It is not one trick design pony, it is called design nirvana :) Your tenants are ever going to see only one of your properties, so no one will ever know! Our last 15 properties look exactly the same. With our initial properties, we experimented with various combinations of paint/floors/cabinets trying to salvage some of the existing elements. Finally we arrived at a combination that looks very good; and just follow the formula each time. Even if it means demolishing serviceable elements. Tenants love it... we are able to charge anywhere from $50 to $150 above the market price, which goes to the OPs question. I used to visit the properties after the completion of each rehab to admire the new look and show off the before/after pics to friends and family. I don't anymore, they all look the same to me; I can't tell the difference between my own properties. But it works, tenants love it, and it is easy! 

The OP is making some blanket assumptions, which probably don't hold true if you are a half-way decent investor/landlord.

I recently reached 25 units, and had to do some soul-searching (along with searching on BP forums) to decide if I should engage a third-party property manager. I read almost every post in this thread and concluded that I can't justify the cost of a property manager, which would amount to a third of the cashflow on most of my my properties. 

I am writing this long post for a couple of reasons:

1. I found a lot of useful info on BP but never contributed. Maybe there is a thing or two from my process that others would find useful.
2. I am not nearly as experienced as many others on BP, I only started rentals in 2019. And I am entirely self-taught. So I am open to any feedback if I missed something. 

Finding Tenants (why I wouldn't pay 1-month's rent to fill a unit)

• I don't see the need to post on the MLS, we usually get 25 to 50 showings per property within the first 10 days. I only do open-house showings. No individual showings.
• When prospects respond to our ads, my VA confirms them for one of the open-house timings, and also calls them on the day of the open house to remind them.
• I have one of my rehab crew members sit thru the showing, who just hands out a printout with details of the property, answers to typical questions, and the next steps to take if the prospect is interested.
• If they are interested, they call my VA who gets some background info, collects their free credit report and income documentation for pre-screening.
• The VA reviews the prospects with me, and we decide on the most qualified prospect and have them apply for full screening. The VA walks them thru the entire on-boarding process via phone/email/web, collects all required documents, gets the lease signed, utilities transferred, collects the security deposit and rent online, and gets them ready to move in.
• I meet the tenants sometimes on the move-in day, or we leave the key in a lockbox and give them the combo on the move-in day.
• We have an online system to track every step of the process, so I am usually informed on what is going on, but I spend about 2 to 3 hrs of my actual time in finding a new tenant. At that rate, I wouldn't pay 1 month's rent to fill a vacant unit. 
  
  

Maintenance & Repairs(why I wouldn't pay 10% of the rent to manage)

• Tenants call the VA, who enters the system in our system, so I get an immediate notification
• My contractor is usually working on my next rehab (BRRRR), so he is readily available to attent to any repair issues. The VA contacts him and coordinates the repair/maintenance with him, and all updates are tracked in the system for me to follow.
• If it is a big ticket item, I get a call from the VA/Contractor, otherwise they just fix it right away. I average less than 24-hr response times, and less than 3-days to fix any issues. Sometimes I pick call them to get more details if I need it.
• We are running an average of 4 tickets per week on 25 units. While these are mostly handled by my VA and the crew, I may still spend an hour a week on this.

New Properties

• When new properties are acquired, the VA informs my insurance broker, applies for rental licenses, makes sure utilities are transferred, HOA registered and takes care of misc paperwork. I might spend a couple of hours per property in this initial setup.
  
• My time is mostly spent on finding properties to buy, and monitoring the rehab. I estimate about 40 hrs per property between finding deals, managing the rehab and getting the property rent-ready. We do 1 or 2 deals per month.

Rent Collection

• All rents are paid online. The system automatically tacks on a late fee by the 6th, and tenants are aware of it.  
• The VA starts calling the tenants on the 6th if rents are unpaid.
• If a tenant calls me ahead of time to inform me that they will be late, I waive the late fee on the first occurrence. But I make sure that they understand that it will not be waived thereafter. It builds goodwill, and also trains them to work with me if there is trouble in the future. 

Accounting

• I am still working on this area. The goal is to categorize all the income and expenses between the credit cards and bank accounts and send them to the accountant on a weekly basis. I am not there yet. But I think it should not take more than a couple of hours a week to do this. 
  

Delinquencies / Evictions

• I haven't had one yet, so I never had to go through an eviction process. I will someday update this post once I experience it; lets hope I never have to.

The Cost of Property Management

• I spend about 5 hours a week total on property management and accounting.
• I pay $250/property for my crew member to sit thru the open houses. The guy is pretty friendly, and he give me a good read on each prospect that visited. 
• My VA grew up in the area, but moved to South America. So he speaks perfect English, and I pay him $1500/month for full-time work, but he says he is only busy about 30% of the time. He thinks he can handle about 75 units before tapping out.

It is possible that property managers do more than what I listed here, but this is the extent of my experience. And I find it hard to justify the cost. 

I have noticed that tenants are sometimes hesitant to apply, because they had past experience where landlords indiscriminately processed multiple applications for a single property, only to be rejected because the landlord found a better qualified tenant. These application fees add up for the tenants, when they have to apply for multiple properties given the shortage in my area. 

So we ask all interested prospects to to send us their free credit report and proof of income as part of our pre-screening process. We only do the full screening if the credit and income looks good; otherwise we let them know that they don't qualify. I know this might slow down the process a little, but we have tons of applicants for each property in the DC Metro area, so this is not a major issue. More importantly, I have noticed that tenants appreciate the fact that you are trying not to waste their money, and that is a good start to the relationship if they end up becoming your tenant.