All Forum Posts by: Nathan Gesner

If you have a good property manager, you shouldn't need to check in. They will send you a report every month showing income/expenses. They should communicate any time there's a problem or a pending turnover.

It's my belief that a PM that requires baby-sitting is a PM that should be fired. Find one that does their job and does it well and you'll almost never have to speak to them.

Congratulations! It looks much better and you managed to keep the costs low. Now comes the hard part: managing tenants!

Don't just check the fees! Sometimes the most expensive property manager can be the one that puts more money in your pocket every year. You have to check every aspect of their business just like you check every aspect of a tenant application.

You can start by going to www.narpm.org and search their directory of managers. These are professionals with additional training and a stricter code of ethics. It's no guarantee but it's a good place to start.

1. Ask how many units they manage and how much experience they have. If it's a larger organization, feel free to inquire about their different staff qualifications.

2. Review their management agreement. Make sure it explicitly explains the process for termination if you are unhappy with their services, but especially if they violate the terms of your agreement.

3. Understand the fees involved and calculate the total cost for an entire year of management so you can compare the different managers. It may sound nice to pay a 5% management fee but the extra fees can add up to be more than the other company that charges 10% with no add-on fees. Fees should be clearly stated, easy to understand, and justifiable. If you ask the manager to justify a fee and he starts hemming and hawing, move on or require them to remove the fee. Don't be afraid to negotiate!

4. Review their lease agreement and addendums. Think of all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.

5. Don't just read the lease! Ask the manager to explain their process for dealing with maintenance or problem tenants. If they are professional, they can explain this quickly and easily. If they are VERY professional, they will have their processes in writing as verification that it is enforced equally and fairly by their entire staff.

6. Ask to speak with some of their current owners and current/former tenants. You can also check their reviews online at Google, Facebook, or Yelp. Just remember: most negative reviews are written by problematic tenants. The fact they are complaining online might be an indication the property manager dealt with them properly so be sure to ask the manager for their side of the story.

I hope this basic guide helps. If you have specific questions about property management, I'll be happy to help!

Welcome to Biggerpockets! Dig in and enjoy the ride!

Read "Set For Life" by @Scott Trench. You have to figure out how to build a solid financial foundation before you start stretching yourself through investments.

You should also find a local real estate investors group, even if you have to travel to do so. Attend the meetings and listen. Try to find a mentor that will exchange education and experience for your manual labor.

In my state, the eviction includes a judgment showing how much the tenant owes. That judgment can be used to garnish wages but I tried it a few times and had no success.

I typically take the following steps:

1. Write the tenant a formal letter detailing exactly what they owe and demanding payment within 30 days. The same letter also tells them we may accept a short-term payment plan (3 - 6 months).

2. If they fail to respond/pay, I hand it over to a collection agency. It costs me 35% of everything they collect and they rarely collect anything, but at least they do the work and I don't have to worry about it. They also report the individual to a credit reporting agency so it sits on their credit and hopefully stops them from scamming the next person.

1. It is not always because of the property class. My market turned this year and I'm struggling to rent any single-family homes, most of which are B Class. If there's no demand, you can't find a tenant.

2. Why are you paying the property manager? They should be able to explain why the property is not renting, what steps they are taking to correct that, etc.

3. I would consider lowering the price or offering some bonuses like 50% off the second month's rent to make your property stand out from the crowd.

And under no circumstances should you return the deposit or hand them any cash prior to vacancy. I also recommend you cut off all communication and start the eviction process. In most cases, tenants will disappear when they receive the Pay or Quit Notice and realize you're not going to play games. The more you talk with them, the more they will try to intimidate or manipulate.

Cash for keys is a quitter mentality but it's a free country. You're essentially rewarding the bad behavior to escape a greater loss and then dumping them on the next unsuspecting Landlord. But it's a free country.

I would hire an attorney to evict them properly and then seek a judgment for the damages. I would go after them for every penny. I may never see a dime but at least it sits on their credit and possibly stops them from damaging someone else in the future or keeps them from qualifying for a car loan, home loan, etc.

I hope you've learned the following:

1. Always inspect every nook and cranny of a purchase, to include tenant payment history, strength of the lease, any lease violations, etc. In this case, you are aware the tenant broke the lease too many times to count yet you still bought the property and inherited them.

2. When you identify a problem tenant or a problem unit, negotiate the contract to get rid of them and/or clean the place up BEFORE you become the owner. The previous Landlord created the problem, you accepted it, and now it's going to cost you thousands to clean it up.

I hope you got this property for a good price.

Give the tenant two options:

1. They leave, you try to find a replacement tenant. The original tenant remains responsible for the terms of the lease until the new tenant takes over, whether that's in two weeks or two months.

2. Give them the option to "buy out" the remainder of their lease. If a tenant has more than six months remaining, I make them pay two months rent and give 30 days notice to vacate. If they meet this requirement, I'll cut them loose once they are out and they can still get a good Landlord reference. If they have less than six months remaining, I only charge a termination fee of one month.