Author Topic: Questions for you Seasoned Landlords?  (Read 3659 times)

surfhb

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Questions for you Seasoned Landlords?
« on: June 14, 2015, 09:17:39 AM »
1.   Assuming one has read tons of books, listened to podcasts, asks questions to mentors, ect.....what part of being a property owner took you by surprise once you pulled the trigger?

2.  Being an out of state landlord, are you happy with your PM?    What kind of due diligence did you complete to find them?   

3.  How do you stay in touch and have a good relationship with a contractor or handyman in the area when things need repair?

4.  Could you give examples of your horror stories?    Ever think of just getting out?  Why? 

5.  What was your biggest mistake?

MillenialMustache

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Re: Questions for you Seasoned Landlords?
« Reply #1 on: June 17, 2015, 09:39:46 AM »
I am not a seasoned Landlord, but we have had one tenant and are currently looking for another, so at least I have a little experience, I guess. I see no one else has replied, so hopefully I am of some help to you.

What took me by surprise is the number of people who call to make appointments to see the house and seem so interested over the phone, but never show up. We have about 50% turnout rate, so we have moved to an open house format only. We are at the house two hours per week and then have people stop by. If 10 people said they were going to stop by, only 5 will, every time. There were not a lot of surprises with the actual rental part - we really shouldn't have rented to our first tenants, but we were excited to have someone interested and thought it would be ok (well...my husband thought it would be ok. I said not to rent to them. Possibly one of his biggest regrets...I digress). Regardless of the tension between us and our tenants, it still went more or less how I expected it would. They paid us rent, we fixed stuff when it broke.

I was not an  out-of-state landlord and my husband did all of the repairs, so I do not have a direct answer to #2 and #3. However, what is your reason for wanting to be an out-of-state landlord? It seems to me it would be much easier for your first time landlording to be local to you.

Our biggest mistake was renting to our last tenants, and it was really my husband's mistake. When they got argumentative during the application process, the plug should have been pulled on them like I wanted. It would have been easy, since we said we didn't allow pets but were going to allow one for them.

jnc

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Re: Questions for you Seasoned Landlords?
« Reply #2 on: June 18, 2015, 07:21:33 AM »
1.   Assuming one has read tons of books, listened to podcasts, asks questions to mentors, ect.....what part of being a property owner took you by surprise once you pulled the trigger?

Can't think of anything really

2.  Being an out of state landlord, are you happy with your PM?    What kind of due diligence did you complete to find them?   

Most of my property management companies come from the turnkey property companies who sold me the houses. However I did find one myself. There are some good scripts on the web about questions to ask a potential PM.

3.  How do you stay in touch and have a good relationship with a contractor or handyman in the area when things need repair?

I rely exclusively on my PMs. If it is a small expense, they will send out their handyman. If it is a more expensive one (and non-urgent), they will get me several quotes from contractors they have used and I will pick.

4.  Could you give examples of your horror stories?    Ever think of just getting out?  Why? 

I've had a tenant file for bankruptcy, a tree fall on one of my houses, and a water heater break.

5.  What was your biggest mistake?

No big mistakes so far but I did get a bit greedy once and bought a house that was a bit too big / expensive and it took longer to find a tenant. Thankfully, the turnkey company I bought it from did guarantee the rent for the first year so they shouldered the rent for the first 2 months.

david51

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Re: Questions for you Seasoned Landlords?
« Reply #3 on: June 20, 2015, 12:24:14 AM »
     1) How easy being a landlord is.
     2) Don't be an out of state landlord. You'll be sorry.
     3) By buying rentals where I live. Easier in all respects.
     4) Had a homicide/ double attempted homicide at one property.  Was actually only a       
         minor inconvenience for me.
     5) Not buying more houses.


rachael talcott

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Re: Questions for you Seasoned Landlords?
« Reply #4 on: June 21, 2015, 06:56:44 PM »
Quote
1.   Assuming one has read tons of books, listened to podcasts, asks questions to mentors, ect.....what part of being a property owner took you by surprise once you pulled the trigger?

2.  Being an out of state landlord, are you happy with your PM?    What kind of due diligence did you complete to find them?   

3.  How do you stay in touch and have a good relationship with a contractor or handyman in the area when things need repair?

4.  Could you give examples of your horror stories?    Ever think of just getting out?  Why?

5.  What was your biggest mistake?

1. Nothing
2. All of the properties that I bought as rentals are in the town where I live and I manage them myself.  I own a condo that was once my home in a distant state.  I'm not thrilled with my PM, but nobody is going to care as much as I do. 
3. I do most of the repairs myself, and have a network of good people here.  In the other state the PM does all that.
4.  One of my tenants cut down two ornamental trees without asking and I was seriously pissed.  I once had some tenants that were a few days late paying every month.  That's as big as my annoyances have gotten.  I do not think of getting out.  Getting into rental property was the best decision I've ever made. 
5. Click-together vinyl flooring in my first rental.  It is only a few years old and looks bad. I should have used laminate. 

NoNonsenseLandlord

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Re: Questions for you Seasoned Landlords?
« Reply #5 on: June 21, 2015, 08:23:32 PM »
1.   Assuming one has read tons of books, listened to podcasts, asks questions to mentors, ect.....what part of being a property owner took you by surprise once you pulled the trigger?
2.  Being an out of state landlord, are you happy with your PM?    What kind of due diligence did you complete to find them?   
3.  How do you stay in touch and have a good relationship with a contractor or handyman in the area when things need repair?
4.  Could you give examples of your horror stories?    Ever think of just getting out?  Why? 
5.  What was your biggest mistake?

1. The amount of damage a single tenant can do, and how expensive it can be to get back to where you were.
2. N/A
3. You can use the phone to call a regular professional service.  There are many that do the job.
4. Horror Stories
http://www.nononsenselandlord.com/2014/05/renter-horror-story-bernard-strangler/
http://www.nononsenselandlord.com/2014/04/renter-horror-story-mike-murderer/
http://www.nononsenselandlord.com/2014/03/my-fourth-and-fifth-investment-property/
http://www.nononsenselandlord.com/2014/02/renter-horror-story-one/
http://www.nononsenselandlord.com/2014/12/landlording-stories/
http://www.nononsenselandlord.com/2014/08/section-8-tenant-leave/
http://www.nononsenselandlord.com/2014/06/bedbugs-in-an-apartment/

5. Biggest mistake.  never underestimate the ability of a tenant to make your life miserable and expensive.  Avoid a bad tenant at all costs.  Understand tenant screening to a fault.  NEVER take a sob story.
« Last Edit: June 22, 2015, 08:21:45 AM by NoNonsenseLandlord »

sammybiker

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Re: Questions for you Seasoned Landlords?
« Reply #6 on: June 22, 2015, 03:23:57 AM »
1.   Assuming one has read tons of books, listened to podcasts, asks questions to mentors, ect.....what part of being a property owner took you by surprise once you pulled the trigger?  Dammit, this really isn't that hard...I wish I would have jumped in earlier

2.  Being an out of state landlord, are you happy with your PM?    What kind of due diligence did you complete to find them?   As an exclusive out of state (actually out of country) LL, I screened pretty hard for my PM and am reasonably satisfied with them.  I checked their references and spoke with various members of their team.  Went on ride-alongs to check out other properties they manage.  Spent time hanging out in their back office.  Popped in unannounced.

3.  How do you stay in touch and have a good relationship with a contractor or handyman in the area when things need repair?  I keep a couple of project managers/GC guys on call and it's their job to manage the contractors/handymen.  My PM also has an in-house maintenance arm.  Depending on the scope of what needs to be done, I shop around the job to the best party for the job.  As far as staying in touch, I figure out what they respond to best and just build that relationship...sometimes it's an e-mail once every couple weeks, others it's a text message, etc.

4.  Could you give examples of your horror stories?    Ever think of just getting out?  Why?  Nothing serious.  Scope growth during renovations, busting budgets, contractor suffering injuries on renovations...Guess I'm not that seasoned after all.

5.  What was your biggest mistake?  Not starting sooner.  Having a BMW and four motorcycles at age 23 instead of investment properties.
« Last Edit: June 22, 2015, 03:38:02 AM by sammybiker »

Another Reader

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Re: Questions for you Seasoned Landlords?
« Reply #7 on: June 22, 2015, 06:01:23 AM »
Nah, the BMW and the motorcycles were fun.  Ooops, I mean conscious expenditures that made you happy.

1.  I did not read a lot of books.  I had been in the industry many years when I wrote my first check.

2.  I have had several property managers in Phoenix, and they range from trying hard to do a good job to absolute nightmares.  Hands down, finding a good property manager is the most important thing to your success after buying the right properties at the right price if you are buying out of state.

3.  I have had some decent handy people that I have used over the years.  Most of them decided after a few years to find another line of work or retire.  The good agents usually have a list of people they use to get work done so deals can close.  My current property manager has some people that can get the job done. 

4.  The horror stories are too many to count.  Even thorough screening can't prevent Grandma from applying to rent the property and moving in her daughter and abusive son in law instead.  Son in law rammed his SUV into the garage wall and door in a fit of rage.  Fortunately, I knew one of the neighbors who called me after it happened.  The property manager was oblivious, because they never checked to see who moved in.  Tenant got a 3-day notice, and Grandma intervened and got them out.  That company no longer manages my properties.

5.  Buying a couple of properties that did not meet the 1 percent rule by any stretch of the imagination to finish assembling the portfolio.  Too focused on ER, too dependent on the California real estate cycle model without really realizing I was justifying purchases on that.  Those properties are still a cash flow drag on my portfolio and I did not get to buy as many as I wanted to in 2009-2012.  Also, not starting a lot sooner and buying in the San Jose area when it made more sense and not keeping the first house as a rental.  Mind you, almost nothing in the Bay Area has met the 1 percent rule for many decades. 

I am going to trim the portfolio as appreciation and tax considerations make it feasible to do so.  Exit strategy is the thing that most long term investors fail to consider. 

zephyr911

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Re: Questions for you Seasoned Landlords?
« Reply #8 on: June 22, 2015, 11:50:51 AM »
1.   Assuming one has read tons of books, listened to podcasts, asks questions to mentors, ect.....what part of being a property owner took you by surprise once you pulled the trigger?
The propensity for tenants to leave piles of crap behind that the landlord has to deal with.
Quote
2.  Being an out of state landlord, are you happy with your PM?    What kind of due diligence did you complete to find them?   
3.  How do you stay in touch and have a good relationship with a contractor or handyman in the area when things need repair?
Never had a long-distance PM or service contractors - I was only out of state once and I tried to do it without them. DON'T. :D

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4.  Could you give examples of your horror stories?    Ever think of just getting out?  Why? 
First try as a landlord: bought a shitty old house in Chickasaw, AL, fixed it up and lived there on savings after getting out of USAF. I couldn't find work in the Mobile area so I moved 350 miles north to Huntsville soon after. Our friends next door got evicted because their landlord wasn't paying his mortgage, so it seemed like a win-win to have them rent our house.

WRONG.

A few months later when they moved on to something nicer, they left the place a disgusting mess. I was newly divorced, cash-poor, and working two jobs, living a day's drive away, so I came up with the bright idea of offering a couple months free to whoever would clean it and fix things up for me. I will never know everything that happened, but the guy  turned out to be a major druggie (probably the reason why he was dropping out of college and leaving the dorms). He had a lot of friends living there with him. They had underage girls over. They stole shit around the neighborhood. They melted insulation off wires on the back porch (so much for my outdoor carpet). They got caught breaking into the public pool to bathe because the water was turned off at the house. I didn't know all of this yet, but when I asked him (via email) to start paying or leave, they totally trashed the house - knocked out drywall, broke fixtures, etc.

Soon after, I made the same deal with a family that had roots in the neighborhood, and they did OK with repairs, but he got laid off and they had to leave after only a couple of months of actual payments. The next tenant also did some decent work but blew me off every time I tried to ask when we'd get to paying rent. The worst part was, he kept answering my emails for months after apparently moving out (the only part I truly resent... that lying asshole). While the house sat empty without my knowlege, all the pipes (which I paid $8000 to install) were stolen. So was all of the wiring.

I eventually did a deed in lieu of foreclosure when facing major pay cut, and walked away from the whole disaster. All in all, I paid that damn $354 mortgage for almost five years, lived there about 3 months and collected rent for 6 or so.
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Ever think of just getting out?  Why? 
No, because I know it all works out in the long run. By the time the clusterfuck described above had played out, I had made a lot of progress renting out rooms in my house, and had learned a lot about what not to do. I knew it could be done right and I wanted the passive income and the tax bennies. I'll never go back.
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5.  What was your biggest mistake?
See above... lol

To my answers above, I will add: always write a lease, keep all your receipts, log all your mileage, and get familiar with the tax code. Never assume you know everything and always keep learning more!
« Last Edit: June 22, 2015, 12:26:16 PM by zephyr911 »

powskier

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Re: Questions for you Seasoned Landlords?
« Reply #9 on: July 09, 2015, 09:03:49 PM »
1. -Being exposed to different types of people that I would have never met or even thought about.
    - that some people will just lie to you.
2. I live 20 minutes away, it would be tough to manage from elsewhere or to trust a PM based on what I have seen.
3. Lucked out, old friend started a handyman business, lives 3 minutes from my 7 plex.
4. Mom and kid , great tenants for 8 months, Mom got arrested on 18 year old warrant, kid started doing drugs, took more than 5 months of no rent and court and state troopers to get him kicked out. Appartment had been destroyed and needed full remodel, then 6 months later the guys drug "friends" came looking for him and kicked down the door and beat up the new tenant who had no idea who the guy was....real nightmare. All the rest of my tenants are old, quiet folks.
5. Not buying more places sooner. 95% of the time everything is groovy, then when it comes time for remodels, roof replacements or freak experiences like above it is crazy and you want to sell. Hard to get this kind of cash flow anywhere else though.........