All Forum Posts by: Nathan Gesner

You can look for Property Managers at NARPM.org. Click on "Directory" in the upper right to search. 

I always recommend you learn the differene between a good and bad property manager, then interview several before making a decision. The reason you hear horror stories about the industry is that so many Landlords just go with whoever is first in the Yellow Pages or that charges the lowest fee. In truth, the ones that cost the most may make you the most.

@Niyi Adewole I think you are on the right track. Tenant violated the lease and added a tenant without notice or permission. I would give him the option of completing the application and paying the increase or giving 30 days notice and vacating. If he's willing to violate the lease in one respect, you can expect he will violate it in another.

Isn't it interesting that tenants only read the lease when trying to get away with something?

If you're increasing rent based on the number of tenants, I recommend putting that in writing somewhere. It can be a generic statement in the lease (eg: any changes to this agreement must be made in writing, signed by all parties, and may result in increased rent) or it can be something you post publicly on your web site. If it's in writing somewhere, it's easier to show the tenant that you aren't just picking on them and that your policy is established and applied to everyone equally.

Check out NARPM and search their directory (upper right) for a manager. My recommendation: learn the difference between a good and bad manager and then interview several to see who you want to work with. If your first question is, "How much do you charge?" and you stop there, you've failed. Sometimes the manager that charges more is the one that makes you more so research, research, research!

You can read about it here: click me

If you are a REALTOR, that should meet the requirement for being a property manager. When they say "Broker's license" that means you have to operate under a broker, not that you have to be a broker yourself.

I think the requirements are spelled out by the Dept. of Licensing and Regulatory Affairs. You should contact them to verify.

Sounds like you are on your way! If only someone had educated me 25 years earlier...

Very few tenants are worth $400 a month compared to the potential problems they can cause. What if he doesn't pay? Refuses to leave after 30 days? Causes damages on the way out? Slips and hurts his knee and claims you were negligent?

I would have purchased the property contingent on ALL occupents being out no later than three days prior to closing. If it doesn't pass the final walk-through, walk away from the deal until they are ready to abide. A left-over tenant is too much risk and trouble.

Go to narpm.org and search the directory at the top of the page. Try interviewing several. 

If you've never used a manager before, do some research on what a good one should look like, red flags to look out for, etc.

I think @JD Martin nailed it.

A "rule of thumb" is defined as "a useful principle having wide application but not intended to be strictly accurate or reliable in every situation.

As a rule of thumb, I like apples. But I can never know for sure if an apple is good until I've taken a bite, sometimes not until I've completely finished the apple.

Investing is the same. You can apply a rule of thumb to get a quick idea of whether a property warrants further investigation. But you should never buy a property based on a rule of thumb.

As JD pointed out, the rule needs to be adapted to the market you are investing in. For example, the 1% rule says that a property is a good investment if it rents for 1% of the purchase price. If you buy a home for $100,000 it should rent for $1,000 a month or 1% of the purchase price.

In my market, most single-family homes rent for 0.5 - 0.75% of the purchase price. If I see a home that will rent for 1% of the purchase price, I know it's probably a good deal. HOWEVER...there are many other factors to consider so I still have to investigate further and crunch the numbers to ensure it will work. It's possible for something to meet the 1% rule and still be a crappy investment (certain townhomes come to mind).

I'm not an expert on flipping but 30% seems like a thinner margin than I would be comfortable with. What if you dig into it and find a problem that takes more money to fix than you anticipated? What if the market slows or stops? You could easily eat up 10% of your profit, leaving you with a 20% spread. If I were flipping, I would want a safer spread of 40 - 50% until I were an expert and proved that my estimated repairs were pretty accurate.

@Niyi Adewole you need to ask yourself a question: What is the purpose of a security deposit?

Answer: it is to mitigate your risk as a Landlord. You always want a deposit large enough to cover potential cleaning, damages, and unpaid rent or utilities. 

As @Mindy Jensen pointed out, the tenant will not improve. Even if they did, your current deposit is insufficient to cover what is already done and you still run the risk they will skip out on the last month's rent or worse.

If you choose to renew, the most likely response will be for him to get worse because he'll think you've already accepted his way of living. Replacing carpet and paint plus losing a month of rent can easily cost you $4,000 - $5,000.

I highly recommend you cut your losses now and screen better in the future.

I have people ask contractors to inspect homes or provide bids and they NEVER offer to pay for their time. Frankly, I can't believe contractors are willing to do it for free. I recently had a guy ask a contractor to provide a written bid to renovate nine units, knowing full well he wasn't going to renovate them. One of the contractors provided a bid, the other took a detailed look at it but then must have realized it was a goose chase and dropped it.

If I were asking a contractor to review a property with me and provide expert advice, you better be sure I would pay him for his time!