Author Topic: Realistically, how annoying is it to manage your own rental property?  (Read 5473 times)

JLee

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I knew that years ago, condos were super cheap in my area (rent is fairly high in comparison). I just searched again and found this guy:

http://www.zillow.com/homedetails/4006-S-45th-St-Phoenix-AZ-85040/7557050_zpid/

I expected it to be destroyed inside, and..well, it's not. I'm starting to wonder if I should pick up an inexpensive condo like this and refurbish it on weekends-- looks like $700-800/mo would be a reasonable rent range.  I've owned my house for two years now and have roommates, but that's the extent of my rental experience.

Lmoot

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Re: Realistically, how annoying is it to manage your own rental property?
« Reply #1 on: February 04, 2015, 04:22:50 PM »
Well, I rent to friends. In exchange for less rent, they manage the property (replace air filters, keep up with yard, replace batteries in thermostat; they even pressure washed the driveway). We split any major repairs 50/50. In 1 1/2 years all we had to split was a $400 AC repair bill. I've been lucky so far.

Going forward with future rental properties, I would want to get a management company so I don't know that I would ever self-manage. I am only doing it this time because a) I know these people so we have an informal month to month agreement b) it's my former primary residence that I will eventually move back into so I would only rent to people I trust and wouldn't want a property mgmt company getting involved.

To me, these sorts of questions honestly is like asking "how annoying is it to get along with people?", because it's essentially the tenants who drive a majority of the factors. You might get more responses from the real estate investing thread also.

Northerly

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Re: Realistically, how annoying is it to manage your own rental property?
« Reply #2 on: February 04, 2015, 04:24:26 PM »
Individual condos are generally not great investments thanks to HOAs (hoa dues, special assessments), lower appreciation, and lack of control over curb appeal. Now if you can buy a whole building...

thedayisbrave

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Re: Realistically, how annoying is it to manage your own rental property?
« Reply #3 on: February 04, 2015, 04:25:08 PM »
I just bought my 2nd rental so I'm up to 2 condos now.  I prefer condos because they are low maintenance and that's what fits me best right now.  I don't have to keep up with the yard, roof, etc.  So far my one has been a breeze to manage - ironically, it was the most trouble when I had a property manager who put horrible tenants in there and didn't get a deposit for them.  I took over in 2012 and besides replacing/repairing the appliances (which were getting old anyway) and maintaining the HVAC system, it's been smooth sailing.  I lived in the unit myself, but there were periods of me moving home (and renting my room when I wanted the extra money) and traveling out of the country for months on end (with family at home to help) with still no issues.

Now I'm snowballing the method a bit, by repeating the process in my 2nd unit and renting the first one out completely. 

They're really not that annoying, but I'm only about 4 years into it.  I don't mind because it's part of my business strategy as my income fluctuates, so it's nice to have a more reliable stream of income.

Lmoot

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Re: Realistically, how annoying is it to manage your own rental property?
« Reply #4 on: February 04, 2015, 04:37:23 PM »
I used to think the same thing about condos, but I'm considering that for my next rental property because it's the only way I can afford to buy a property in the near future with cash. Also, you gotta choose your HOA's wisely; with condos a lot of things could be included like water/trash, internet and cable, even property taxes sometimes. I will be looking for condos in student areas (since I will be living in it initially as a student for 2 years), and am specifically looking for places that do not have a lot, if any "extras" like pools, clubhouses, gym, tennis courts, etc.

Setters-r-Better

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Re: Realistically, how annoying is it to manage your own rental property?
« Reply #5 on: February 04, 2015, 04:54:02 PM »
Just depends. Some people find property management fun. Some property managers are terrible.

Another Reader

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Re: Realistically, how annoying is it to manage your own rental property?
« Reply #6 on: February 04, 2015, 04:57:01 PM »
Ah, Hallcraft Villas East.  The siren song of income property.  This is the third time I have watched the real estate cycle here.  When the market tanks, investors swoop in and pick these up for $10-$20k.  Fast forward three to five years, and they are back on the market at much higher prices.  Will they go higher?  Who knows?

Tenant quality is awful, the places have not been maintained because the HOA is a mess, and the common area improvements need a lot of work.  This particular unit is one unit away from I-10.  Since October 1, several of this model have rented for $600 to $650.  There's a 2/1 available at $715, been on the market for 50 days.  Here's a quote from the listing:

 Although we run credit/criminal background check, rental history and income are two biggest factors we consider for approval. Move in special requirements are: 3 times the rent in monthly income, excellent rental history

So if you want felons as your tenant's neighbors, the overall condition of the project is not important, and you can tolerate bad tenants, go for it!


JLee

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Re: Realistically, how annoying is it to manage your own rental property?
« Reply #7 on: February 04, 2015, 05:00:44 PM »
Ah, Hallcraft Villas East.  The siren song of income property.  This is the third time I have watched the real estate cycle here.  When the market tanks, investors swoop in and pick these up for $10-$20k.  Fast forward three to five years, and they are back on the market at much higher prices.  Will they go higher?  Who knows?

Tenant quality is awful, the places have not been maintained because the HOA is a mess, and the common area improvements need a lot of work.  This particular unit is one unit away from I-10.  Since October 1, several of this model have rented for $600 to $650.  There's a 2/1 available at $715, been on the market for 50 days.  Here's a quote from the listing:

 Although we run credit/criminal background check, rental history and income are two biggest factors we consider for approval. Move in special requirements are: 3 times the rent in monthly income, excellent rental history

So if you want felons as your tenant's neighbors, the overall condition of the project is not important, and you can tolerate bad tenants, go for it!

Haha, yeah..I just got the report from my realtor.

Terrestrial

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Re: Realistically, how annoying is it to manage your own rental property?
« Reply #8 on: February 04, 2015, 05:36:38 PM »
I've had a range of experiences so far.  Some times I go months on end without any problems...nothing breaks, rent's on time, it's fine.   Other months something always breaks at the LEAST convenient time (when i'm out of town on vacation), or I have to call because the rent hasn't hit my account, or I drove by and the weeds are a bit high.  All in all it's not my favorite job but it's not enough effort that i'd rather pay someone instead of myself to do it.   The key is getting as good a renter as possible...thorough screening helps prevent alot of headaches.

dunhamjr

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Re: Realistically, how annoying is it to manage your own rental property?
« Reply #9 on: February 04, 2015, 10:39:22 PM »
Had my rental for about 7 years. Pretty much only have to deal with anything once a year if the tenant is leaving.

Have a handy man on call for the occasional repair.

I have been pretty lucky.
« Last Edit: February 10, 2015, 08:05:23 AM by dunhamjr »

arebelspy

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Re: Realistically, how annoying is it to manage your own rental property?
« Reply #10 on: February 05, 2015, 12:28:02 PM »
It's pretty easy for me, and well worth it dollar-wise.

My previous answer from about a year ago:
Quote
Land lording, for me, averages about 1 hour per month per property.

It lumps up though - most months you have 5 minutes of work (checking to make sure rent was deposited into the account... it was.  Maybe 5 minutes calling the occasional plumber or whatever.).  Then when someone moves out (say, once/year or so), you'll have 10 hours of work getting the property ready and showing it to new potential tenants.  Then back to very little time needed.

So it "averages" to one hour/month, but it's really more like a median of 5 minutes per month or less, and a rare spike of 10 hours in a weekend.  This is, of course, assuming you have a property in a decent area and screen properly so you get good tenants (no drama, evictions rare) and do a good job with upkeep of the property (so repairs are rare).

And, of course, you can outsource it to a property manager that you will have to manage, but now you're looking at much less time.  You can even outsource the repairs (via calling repairmen) or make it even MORE hands off and get a home warranty so the tenants call that number directly for repairs.

Of course this doesn't touch on the time needed to find good properties.  But people worrying about being a landlord and it taking a bunch of time is an overblown and, frankly, false fear, IMO.  If you have the constitution for it, it's not bad at all.

http://forum.mrmoneymustache.com/real-estate-and-landlording/time-needed-to-run-a-rental/
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sol

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Re: Realistically, how annoying is it to manage your own rental property?
« Reply #11 on: February 05, 2015, 03:07:43 PM »
We only manage two properties, but it's been super easy so far.  Maybe we're lucky?

Most months it's effectively nothing.  About once a year something needs our attention at one of them, we go over and have a look, and then either spend an afternoon fixing it or call the appropriate tradesperson to fix it for us.

Every single repair we've dealt with over the past three years:

1.  Broken gas fireplace valve.  Called repairman, stood around for 30 minutes while he fixed it.
2.  Broken sprinkler system manifold.  Fixed it in about two hours, three months later it broke again so we called someone to fix it for us.
3.  Broken built-in microwave.  Went over and measured the hole, ordered a new one, installed it ourselves in about an hour.
4.  Broken tree branch.  Drove over with ladder and a saw, hacked it off, took it to dump.
5.  Tenants ignored yard.  Spent like three hours one weekend weeding and trimming.  Totally optional.

Adding up all the time spent on those, I think we spend more time prepping the places for rent (cleaning and painting and fixing stuff) and then finding and screening tenants than we do on actual property maintenance.

arebelspy

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Re: Realistically, how annoying is it to manage your own rental property?
« Reply #12 on: February 05, 2015, 05:30:43 PM »
Adding up all the time spent on those, I think we spend more time prepping the places for rent (cleaning and painting and fixing stuff) and then finding and screening tenants than we do on actual property maintenance.

Absolutely.
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JLee

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Re: Realistically, how annoying is it to manage your own rental property?
« Reply #13 on: February 05, 2015, 05:52:21 PM »
Hmm. Seems to be quite a positive general trend..

I may have to keep an eye on the Phoenix market and when the 'stache is a little bigger, think about picking something up. I don't have a great feeling about the one I listed, due to the neighborhood...it's really super cheap, though. If I was in a financial position to buy it right now, it'd be a tough decision.

scrubbyfish

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Re: Realistically, how annoying is it to manage your own rental property?
« Reply #14 on: February 05, 2015, 08:52:56 PM »
It was zero annoyance -an absolute pleasure, in fact- to manage the rentals while excellent tenants were in them. I loved advertising, doing the forms, knowing I was providing lovely housing for people, responding to the rare need, being legal and beyond fair.

It was an extremely high annoyance to manage rentals where applicants or tenants were awful. I hated facing damage to the property I'd cared for, having to call police, having to remind people to pick up poo or to do it myself, etc.

I had extremes: excellent tenants, awful tenants. Same screening process for each: live interviews, reference checks, criminal record checks. If they had a pet, I required them to bring it to the interview too. All around the same ages, many students, all studying or employed.

Excellent tenants?
Quiet, took care of their spaces, paid rent on time no problem, gave legal (or at least reasonable) notice.

Awful tenants?
One was awesome, until she got drunk, which turned out to be at least several times per week. Then she would abandon her toddler, bring other people into the house, leave them there and go out. Shrieking music, someone arrested, someone left behind screaming for some hours until she passed out. Etc. Another was awesome until she got into a car accident and was in too much pain to care for her very large dog, which became a problem of poo everywhere. A third one found someone living on the street, so moved him into the shed and charged him rent while he damaged the place, then she moved out without paying rent to me and leaving him behind with a key to the house, which meant I couldn't necessarily move him out without process.

Challenges?
In BC, the (legal) eviction process is pokey and slow, and the landlord and property are at risk in the interim.
Some people give out friends' cell phone numbers as work and character references, and the friend pretends to be the employer.
A landlord having trouble with your applicant may encourage you to take them so that they can get rid of them.
Tenancy laws here also dictate many other aspects: can't charge more than half a month's rent for security, so managers may feel a need to scramble when someone flees with no notice, etc.

On my side?
Besides the good tenants that started out as strangers to me, I had friends to rent to for long stretches.
A low vacancy rate, plus relatively low rents, plus willingness to accept children and (some) pets meant I had larger pools of applicants.
I had neighbours that paid attention and called me when things were weird, so I could act on things quickly.
I worked within tenancy laws to successfully negotiate for some to leave on mutual terms, no permanent damage.

The managers in BC that I knew to do well were willing to break laws (circumvent tenancy laws, threaten tenants). I wasn't willing to do those, and was going to be further away, so I got out of the business.

scrubbyfish

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Re: Realistically, how annoying is it to manage your own rental property?
« Reply #15 on: February 05, 2015, 08:57:12 PM »
I'd say it can depend on things like local vacancy rates, whether you're offering higher-end places for professionals or something else, and the tenancy laws in your area. These dictate how many applicants you get to choose from, the likelihood of stability in the tenant's life, and how fussy or easygoing the process is required to be, legally speaking.

I'd like to hear more about what makes managing work for those of you who do it.
Do your region's laws support landlords as much as they do tenants?
Are you tough such that tenants sense not to jerk you around?
Do you have a vacancy rate that allows you to choose from a large pool of applicants?
Are your tenancies separated geographically?
Do you feel able to simply trust that your space will come out unharmed, regardless of antics during a tenancy?
What is this 'constitution' of which you speak? ;)