All Forum Posts by: Penny Clark

The idea is to use a minimal amount of your card and pay it off quickly. If you spend up to your limit it will be difficult to pay off the balance each month and you'll actually bring down your credit score by not having any available credit left to use (credit utilization/total credit). Best way to build your credit when you only have one card is to charge up about 30 percent of it and pay off the bill every month. A bonus in doing so is that the high interest rate doesn't matter since you're paying the bill off every month. Before long you'll have all the credit you need. The trick then is to discipline yourself so you can use them but still always pay them off; score will stay in the 760-800 range if you do this.

Good luck!

@Steve Cook, glad you started this thread, and keep in mind not all property management companies do a surcharge for repairs. If they do, it is typically 8-10 percent and should be clearly stated in the management agreement. Also, as another member pointed out, always put a maintenance spending limit per month per property in writing Anything above that should require owner approval before proceeding, unless it is an emergency type of repair such as repairing a burst pipe indoors or removing a fallen tree limb from an upstairs window. 

A good PM, however, will get detailed information of the complaint and try to solve it over the phone. For example, there have been a number of times my tenants have had trouble figuring how to work the thermostat and so wrongly assume it is broken. This does take time to address these issues but if if a PM is taking a cut, he or she should do what they can to prevent unnecessary service calls - isn't that what you are paying them to do? 

In addition, providing preventative maintenance reminders to owners (gutter clean outs, HVAC tune-ups) is good management. Better yet, if you are contracting to use a certain company, see if they'll offer a yearly check up for all your owners at a discount.  PMs who take time to teach tenants how to change out the air filters or how to shut off the main water or how to reset the breaker that trips will not only reduce service calls but will keep capital expenses down (changing out air filters regularly can diminish the chances of having to replace the condenser coils, for example).

Maintenance repair surcharges isn't the only charge owners should look for in their PM agreements, but it is one of the more important ones that often gets overlooked.  

@Hector Valles, I would agree to either rent in a place you can afford and invest 80 percent of the money and set aside 20 percent as a residual fund for the property or properties you buy. True, Cali is a tenant friendly state and can prove troublesome for landlords who don't bother to educate themselves on landlord-tenant laws. Landlords do okay here as long as they know and enforce their rights and keep their properties in good order.

We have been investors here in NorCal so I understand the lure of cash flowing properties in other states, but if you are just starting out, consider looking into areas that are more affordable then Southern Cali that are not so far - Sacramento, Merced, Fresno, Stockton. The other option is to sit on the money for a while and WAIT. Put feelers out to the brokers and wholesalers in your area who have the contacts to find you properties not listed yet on the MLS (check your local REI group or connect with BP members in your area) Decide what your property criteria is - it could be a multi that you decide to fix up and/or live in and rent out the other units or it could be a SFR that you can put 20 percent down, do some fix up and rent out.

Give yourself some time to learn the basics on this site too. Good luck and please share with the community your investment experience!

Lots of good input here but what really matters is what works and is acceptable to you as the landlord. We have one rental that has an inherited tenant whom pays the rent on the 15th because that's when she gets her retirement payment. Sure we could have insisted she pay by the 3rd like we do our other rentals but she pays like clockwork on that due date and treats the property well. I have a client with a rollover tenant who has paid late since we took over management. I asked her about serving notice and getting one in who would pay on time. She said she'd rather keep him because he pays the rent and the late fee ( a hefty $65) consistently and so she makes more- go figure. Point is, it really is up to you as long as the late pattern doesn't mess with your bottom line.

@RJ Jackson lots of good answers here already. Even with a great property manager, you will never be completely hands off as a buy and hold investor. I would start by asking other investors in that area who they use and why, go on Yelp and see which PM company scores high with good tenant AND owner reviews. Then when you're ready to interview, start with those questions posed by @Kim Meredith Hampton. I would also recommend you read my blog on Four Qualities to Look For in A Property Manager.

Good luck to you and share your experience!

If you do comp them for it which is a nice but unnecessary gesture, then at least plan to bump up rent to market rate when lease expires. There's no reason in this market in Sacramento your rent should be reduced - especially when utilities are included!

@Malia Arnold gave you an excellent resource in RHA. Once a month you can get answers to legal questions from experienced landlord-tenant attorneys for free and the organization offers monthly social mixers and education events for rental owners too. I would also get the California Department of Consumer Affairs guide for Landlords and Tenants so you become familiar with the laws in your state.

@Jeremie Cortez, congratulations on your purchase!. Always communicate in writing. You want to keep it formal and businesslike from the start. I would  first send them an introductory letter stating 1) the property has been sold and is now under new management /ownership 2) instructions on where to send rent payment to and how you will accept it and 3) who to contact and how to report emergency maintenance or service requests. You can mention they will have the opportunity to sign a new lease at -----amount or continue to pay a higher month to month rate .  Tell them to contact you within a week to schedule an appointment to sign new lease. Otherwise you will assume they want to continue with current lease. Then send them  a separate legal notice of rent change (30 day) with your desired rent. 

Personally, I would keep them on a month to month until you know their payment record and if their will be any problem issues with tenancy (willful violation of terms or they make unreasonable demands, etc)

M2Ms advantage to owners is you can raise the rent and change other terms in the lease after giving proper notice without getting tenant's consent. For example, billing them for water charges. And you can break a M2M with proper notice (60 day if occupied for year or more, 30 if less than a year) without giving any reason. Sacramento has a very strong rental market, so you should not have any issues finding qualified tenants if these tenants don't work out. Hopefully you were able to get their current contact information from the previous owner too. This is helpful when serving legal notices. If you have any other questions just PM me.

Best of luck to you!

Rent increases higher than 10 percent require 60 day notice in Cali.

@JudyJ, comments made above by William are spot on. Either this company is taking liberties it shouldn't or you didn't read the agreement when you signed up. There are four fees you should always be clear on and have the management company point them out to you in the contract:

- management fee

-lease up fee

- maintenance reserve requirement (if any) this can also apply to utility reserves.

- maintenance expenditure limit per month for the property.

Run from any management company who is not willing to provide this information before you sign. Better yet, ask for a copy of the agreement be emailed to you to review before your first meeting.

Best of luck to you!

Before you make your offer, make sure to get lease copies, payment records, actual utility bills  and current tenant information from the owner if you will have inherited tenants. Request documentation.