Author Topic: Our first rental property - manage ourselves?  (Read 12843 times)

Michento

  • 5 O'Clock Shadow
  • *
  • Posts: 9
Our first rental property - manage ourselves?
« on: November 15, 2012, 12:38:09 PM »
Hello all. My husband and I just bought our first rental property. We're currently in the process of fixing it up and getting it ready to rent.

We both work full time jobs (my husband often has to work OT as well) and we're wondering if it's worth it to hire a management company to handle the rental versus managing it ourselves? We've found one company that looks promising on the outside (what they advertise/tell us). Does anyone have experience using such a company? I realize their fees would cut into our cashflow.

Part of me thinks we'd probably be better off doing it ourselves, but my husband thinks hiring management would make things easier.

Thoughts?

We are pretty excited about our first rental. Here is some additional info for anyone interested:

Location: Houston, TX
Purchase Price: 85k
Down: 21k
Mortgage per month: 295.00
Taxes/insurance per month: ~400.00
Comparable rentals in our area: ~1100-1200 a month

This was a HUD foreclosure. The house needs a fair bit of cosmetic work, but otherwise it's in great condition. Built in 2007 so we're hoping things like the roof, A/C, etc will hold up for a long time to come.

I'm doing a little blog about our experience so if you'd like to see some pictures check out http://newblord.blogspot.com/ (Fair warning: a few sparks of language on the blog)

Thanks, all. :)
« Last Edit: November 15, 2012, 12:41:27 PM by Michento »

arebelspy

  • Administrator
  • Senior Mustachian
  • *****
  • Posts: 27774
  • Age: -999
  • Location: Traveling the World
Re: Our first rental property - manage ourselves?
« Reply #1 on: November 15, 2012, 06:06:06 PM »
Congrats!

Not a bad deal at all, should net you 10-15% cash on cash return, plus the mortgage paydown, tax depreciation benefits, and any potential appreciation.

As far as landlording or getting a property management company, it'll totally depend on your time, inclanations, and temperament.

I manage my own properties, but I only have a few right now.  I'm thinking about handing it off when I get 10+.

It's basically a small side job, it's not part of my rental returns, I pay myself rather than a property management company.  It's so little work, it pays around $100 per hour (average month is an hour worth of work.. Median is 15 minutes, it's the turnover where you'll spend 6 hours or whatever that month).  I'd rather keep that $1200 per property per year and put in 12 hours over the course of the year.  YMMV.
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with two kids.
If you want to know more about me, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

Michento

  • 5 O'Clock Shadow
  • *
  • Posts: 9
Re: Our first rental property - manage ourselves?
« Reply #2 on: November 16, 2012, 07:16:11 AM »
Thanks, Arebelspy. :)

That's what I was thinking as well - not many hours of actual work for the price we'd pay a management company. I think since we're both new to this we're just unsure of how much hands on attention it would need as well as how best to find tenants, screen, and set a lease without doing something dumb that could get us into trouble later.

onemorebike

  • Bristles
  • ***
  • Posts: 319
Re: Our first rental property - manage ourselves?
« Reply #3 on: November 16, 2012, 07:26:26 AM »
I'm with Arebelsby. I've only got one but hoping to expand to more over time and have managed it the past two years. Like you I got a pretty good deal on a foreclosure, fixed it up and now rent it for a pretty decent monthly profit. I've had moments of annoyance but honestly the income to work ratio is weighted in a way that it would take a pretty serious renter nightmare for me to hire a company.

DoubleDown

  • Handlebar Stache
  • *****
  • Posts: 1989
Re: Our first rental property - manage ourselves?
« Reply #4 on: November 16, 2012, 12:03:27 PM »
Thanks, Arebelspy. :)

That's what I was thinking as well - not many hours of actual work for the price we'd pay a management company. I think since we're both new to this we're just unsure of how much hands on attention it would need as well as how best to find tenants, screen, and set a lease without doing something dumb that could get us into trouble later.

I agree with the others to do the property management yourself if at all possible. It takes little time to get the rent check out of the mail each month and deposit it, plus deal with the occasional issues that arise.

HOWEVER -- I note that your post just now referred more to aspects of locating and signing a good tenant, and less to what I would call "property management." You can hire a local real estate company to market your rental property (including showing it to prospective tenants), screen tenants, provide a standard lease agreement, run a credit check, and so on. Then, once they've identified a quality tenant for you, they're done and do not collect any further fees. Typically they'll charge one month's rent on a twelve-month lease to place a tenant for you, although this fee can be negotiated down (you could suggest one-half month's rent).

You might consider hiring a real estate agent to do this for you JUST ONCE, observe very carefully what they do, and then do it yourself the next time and every other time going forward, using a similar lease agreement that you will craft yourself.

new2this

  • 5 O'Clock Shadow
  • *
  • Posts: 34
Re: Our first rental property - manage ourselves?
« Reply #5 on: November 16, 2012, 12:40:17 PM »
I've had a nightmare experience with the property management company we used. We just fired them last month, and I will never hire another one again. I would much rather do it myself than feel like I have no control over what is going on.

Michento

  • 5 O'Clock Shadow
  • *
  • Posts: 9
Re: Our first rental property - manage ourselves?
« Reply #6 on: November 16, 2012, 12:49:12 PM »
DoubleDOwn - I hadn't considered that. That's a good idea. I'll bring that up with my husband. The monthly management stuff does not seem like a big issue for us. As you noticed, it's mainly the finding of a tenant and doing the lease.

Whitknie - Sorry to hear that. It definitely does seem like they control a lot if you use them.

arebelspy

  • Administrator
  • Senior Mustachian
  • *****
  • Posts: 27774
  • Age: -999
  • Location: Traveling the World
Re: Our first rental property - manage ourselves?
« Reply #7 on: November 16, 2012, 05:14:23 PM »
I have used a company to help me find and screen tenants, and I have done it on my own.  When I have a vacany now, I list it with that company, as well as list it myself on Craiglist and Section 8.

I think it is a good idea to use a company like that at least once to get copies of their lease, see how they do it, then you can develop your own methods.

Tenant screening is the single most important part of being a landlord.  Establish a firm business relationship with the tenant.

Maybe get some landlord books to read up in it.

Good luck!
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with two kids.
If you want to know more about me, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

Nords

  • Magnum Stache
  • ******
  • Posts: 3181
  • Age: 58
  • Location: Oahu
    • Military Retirement & Financial Independence blog
Re: Our first rental property - manage ourselves?
« Reply #8 on: November 16, 2012, 07:12:39 PM »
We both work full time jobs (my husband often has to work OT as well) and we're wondering if it's worth it to hire a management company to handle the rental versus managing it ourselves? We've found one company that looks promising on the outside (what they advertise/tell us). Does anyone have experience using such a company? I realize their fees would cut into our cashflow.
Part of me thinks we'd probably be better off doing it ourselves, but my husband thinks hiring management would make things easier.
Thoughts?
I think that turning one rental property over to a management company is the equivalent of hiring a financial advisor to "manage your investment portfolio"-- or walking into a car dealer, handing over your credit card, and asking how much car you can afford.  You'll get exactly what you ask for, and you'll certainly pay for peace of mind, but you won't learn much in the process.

Hiring a realtor or a property management company to find you a tenant is a good idea, but hopefully you find a realtor/company you can trust.  What you really want them to do is to teach you how to find a good tenant, not just spend the least possible amount of time finding someone who can pass a credit check.

You could search your local realtor websites for sample rental leases.  You could also search Houston's city website for a tenant-landlord code or manual that would help you cover all the requirements.  You'll probably find a readable lease that complies with all local requirements.  If you come up dry then I'd be happy to e-mail you a copy of our daughter's apartment lease near a Houston college, but it's a huge honkin' heap of boilerplate.

Two suggestions that have worked for us:
1.  Advertise as "pet friendly".  You can include a lease clause that the tenants will pay for pet damage (including carpet cleaning and repairing teeth/claw marks) when they (the tenants, not the pets) vacate.  Your alternative is to say "no pets" or to try to limit the situation, but that just motivates the tenants to hid their pet(s) from you.  The reality is that pet owners are so grateful to find a pet-friendly place that they'll try harder than the average tenant.
2.  If it's available in Houston, go for the military tenants by listing on AHRN.com.  Anyone can list as a landlord, but only military can search the listings.  This automatically screens out the Craigslist whackos. 

If you're going after the college student tenants, you'll probably want their parent(s) to guarantee the lease.  That seems to be the practice at the place my daughter is renting, although their property management office handles the usual revolving-door roommate dramas.

You're building an audience on your blog.  You could set up a page there as a tenant application, complete with a link to a credit-check agency.  Of course you might be posting about things on your blog that you don't want the tenants to know about, so this might not be a good option.

I enjoy Frank Gallinelli's real estate blog.  He doesn't focus on the single-property landlord, and I wouldn't spend money for his products for just one property, but his advice is still applicable:
http://realdata.com/blog/managing-for-value-%E2%80%93-a-guide-for-the-first-time-landlord/

Another Reader

  • Magnum Stache
  • ******
  • Posts: 4976
Re: Our first rental property - manage ourselves?
« Reply #9 on: November 16, 2012, 07:30:01 PM »
Thanks for the AHRN.com info.  With several properties near Luke AFB in Arizona, this will be helpful.  One of my best tenants ever was stationed at Luke.  He did two tours in the Middle East and kept the house through both of them.  When he was reassigned to Las Vegas after 6 years, he wanted to know if I had rentals there.  I have had other good military tenants from Luke as well.

You are absolutely right about pets.  Even if the tenant moves in without them, Spot and Fluffy will likely appear at some point.  Better to get them on the lease.

Hamster

  • Pencil Stache
  • ****
  • Posts: 623
Re: Our first rental property - manage ourselves?
« Reply #10 on: November 18, 2012, 09:10:58 PM »
We have four rental units (2 duplexes), and have been landlording for about 5 years. I'm not an expert, but we've been successful and learned a few things. I have some thoughts on your questions, and a few other bits of advice.

I'd recommend against using a management company if you live near your properties. It's too expensive, and most people I know who have used them have felt that they did not do a good job of screening tenants or making good decisions. And they are way too expensive for what they provide. I like having a good personal relationship with my tenants, as I believe it helps avoid problems if you all know each other. I would only use an agency for long-distance management or if I had a LOT of properties (at which time maybe I'd have that be my only job and do it myself anyway).

1) Tenant selection: We ask for an application/screening fee (In WA state, the fee cannot legally exceed the actual cost of the screening), or tell them we will waive it if they go to http://www.annualcredireport.com and print out a free credit report for us. We also call references, verify employment, etc. We haven't done criminal background checks... but we probably should... If people are willing to give you real references and print their credit report, you can weed out a fair number who may not work out.
Based on personal experience it's much better to have the property vacant and not cash flowing for a short period than rush into a tenant who will be a problem. Look for good tenants who plan to stay a long time. Less turnover means less hassle and steadier cashflow. Hamster's law: tenant drama decreases proportionally to length of time they've occupied the unit.

Probably obvious, but making your property look a little bit nicer/trendier than the competition (lots of PRETTY photos on the craigslist ad), helps attract better tenants. In our case, adding nearly new stainless appliances off craigslist (or the ding-n-dent section of the appliance store) make the kitchens look a lot nicer and allow us to charge a bit more and attract tenants who want a nicer looking place (and usually take better care of it). Many tenants have had landlords who don't care. Show them you do care and let them know you expect the same from your tenants.

2) Lease: There are various places online that you can pay a fairly small fee to download a generic lease agreement for your state (that you can modify and use forever). Many of them will also include other documents you can use: walk-through forms, pet agreements, late payment notifications, etc. You can also sometimes find PDF copies of leases or rental application forms that large agencies or apartment buildings use--you can scan them for phrasing/clauses that they use. Look at your state/local laws. Some require you to provide various disclosures along with the lease (e.g. info re: smoke detectors, etc).

3) Pets: I have a different take from others and lean away from allowing pets routinely. A problem pet can cause at least as much damage as a problem tenant. We've had to tear out carpets twice because of pet urine damage. We turned the problem into an opportunity by replacing the carpet with self-installed laminate "hardwood" floor (think Pergo). It's more durable, easier to install, trendier looking, and about the same price as carpet, and the damage deposit paid for it. Allowing pets gives you access to a bigger pool of tenants, but your cleaning and maintenance costs will go up. Even well-behaved pets will almost certainly mean more cleaning work, refinishing doorframes/windowsills, scratches in floors, dirtier walls/carpets, etc.  At the very least I'd get a larger security deposit and have a nonrefundable cleaning fee for the carpets in exchange for allowing pets. You may be able to ask an extra $50-100/month for taking on pets.

To deal with the issue of bringing in undisclosed pets: I explain the pet issue very clearly when reviewing the lease with the tenants at signing (pets require additional deposit, cleaning fees, etc). I tell them I love animals, but have had to deal with the cost of pet damage, and need to protect myself. If you really love the tenants, work with them. Everything is negotiable. If you manage the property yourself, you will have a few occasions to see the property each year (changing furnace filters, maintenance calls, etc). If you see evidence of pets that aren't on the lease, take a very hard line. They will either need to leave, or come to an agreement on an amended lease that addresses the pets.

4) Accounts: If you haven't already, set up a separate account for all the rental income/expenses. Ideally have a separate credit card that is only used for the rental account. It all makes your accounting easier in the long run.

5) Accounting: In most things, I'm a DIY-er. But, in this case, I would hire an accountant unless you thoroughly understand the nuances of how to handle rental income taxes now and how depreciation, and deductions may effect taxes when you sell: (e.g. depreciation is calculated over 27.5 years for the house--and not at all on the land; there are different depreciation periods for various types of purchases/improvements, how do you claim depreciation as a loss against rental income and against earned income, effect on how to calculate capital gains when you sell, etc...).  Be especially careful if you are claiming real estate losses against regular income. You must be a real estate professional (as defined by the IRS) to claim certain losses. Only by hiring an accountant did we realize the things we would have done incorrectly without him.

Sorry for the length. Hope it's helpful.
« Last Edit: November 18, 2012, 09:38:13 PM by Hamster »

PJ

  • Handlebar Stache
  • *****
  • Posts: 1381
  • Age: 48
  • Location: Toronto, Canada
Re: Our first rental property - manage ourselves?
« Reply #11 on: November 18, 2012, 11:05:59 PM »
Regarding pets, you'll want to check the legality of allowing/banning them.  Here in Ontario, people can't be prohibited from having pets in an apartment: 
 
(see #14)  http://www.ontariotenants.ca/law/act02.phtml 
 
And an interesting article re: the differences between apartments and condos on this issue: 

http://www.aaron.ca/columns/2003-11-01.htm

Another Reader

  • Magnum Stache
  • ******
  • Posts: 4976
Re: Our first rental property - manage ourselves?
« Reply #12 on: November 19, 2012, 06:27:42 AM »
+1 for Hamster's comments. 

I do use property management companies, because many of my properties are out of state.  I have never found a really good one, but they are a necessity at that distance.  Expect a lot of frictional costs with them - bad decisions on repair/replace, marginal vendors, failure to inspect, renewing bad tenants, add-on fees, etc.  You will hire and fire several if you are in it for the long haul.  If you use property managers, you will have to manage the managers and you should still go out there and drive by the properties twice a year.

If you manage yourself and are in the property several times a year, you will stay on top of damage issues.  Pets will cause a lot of damage, but in some markets everyone has pets.  Watch out for large aggressive dogs that could invalidate your liability insurance.  The dog goes or they go.

Do criminal checks.  The last thing you want is a child sexual predator living in your property.  And they will apply, even in nice, middle class neighborhoods.  Any history of domestic violence acts committed by a potential tenant should cause you to reject the tenant.   I have had two tenants with that problem in over 16 years, and both caused thousands in damage.  In one case, the tenant's mother applied to rent the place because her son would have been rejected.  That tenant was evicted and mom was on the hook, but you don't want to go there.  In both cases, I discovered the damage by driving by.   

I do not use Craigslist.  Nothing but flakes and con artists.  Some of the rental sites are better.   The most important thing is to screen your tenants.  I have several long term tenants, some over 10 years.  Turnover is costly, so I try to make those folks happy.

If you have the right personality, rental real estate is a great investment.  If you are a perfectionist and stress over every little thing, or if you have trouble dealing with people and saying no, it's not for you.

Michento

  • 5 O'Clock Shadow
  • *
  • Posts: 9
Re: Our first rental property - manage ourselves?
« Reply #13 on: November 19, 2012, 01:08:38 PM »
Wow! I was away for the weekend and came back to all of your awesome comments. Thank you!

Ok this post is really making me want to handle the property ourselves. I like that there's an option to get help with the initial leasing but then take over. Getting this first rental going will hopefully give us the experience to handle it all for the next one.

I will do some research to find more info about leases for Houston/Texas. As Hamster said, maybe I can find a generic lease to modify.

Also, I hadn't considered the accountant. Another thing to consider with the end of the year nearing.

Thanks again, all!

Flynlow

  • 5 O'Clock Shadow
  • *
  • Posts: 79
Re: Our first rental property - manage ourselves?
« Reply #14 on: November 20, 2012, 08:53:45 AM »
I do not use Craigslist.  Nothing but flakes and con artists.  Some of the rental sites are better.   The most important thing is to screen your tenants.  I have several long term tenants, some over 10 years.  Turnover is costly, so I try to make those folks happy.

Care to share some of the rental sites that have worked well for you?  Coming at this from the other side of the coin (I'm looking to rent a place), most of the rental sites I've found are like those little free guides you get in the grocery store: nothing but huge apartment complexes.  I've been trying to find a small home to rent from a private party, and have had a tough time sorting out all the spam from the big rental companies. 

DoubleDown

  • Handlebar Stache
  • *****
  • Posts: 1989
Re: Our first rental property - manage ourselves?
« Reply #15 on: November 20, 2012, 09:31:20 AM »
It's too bad that some folks have had such poor experiences with Craigslist. I've had tons of success there, I've found several great tenants on it. I even sold a house I advertised solely on Craigslist! Had an absolutely fantastic, rock solid buyer who paid all cash for my $250,000 house, smoothest transaction ever. Personally I wouldn't give up on it, I think there are lots of honest landlords and tenants there. And at least where I live (DC area), many realtors post there as well.

MoonPilgrim

  • 5 O'Clock Shadow
  • *
  • Posts: 78
Re: Our first rental property - manage ourselves?
« Reply #16 on: November 20, 2012, 09:56:27 AM »
I hired a property manager to help to handle my first rental--it was a case of me being short on experience and time.  Another factor was that I ended up with rental real estate by default, not exactly on purpose (found our dream house, waiting for the market to recover a little more before I sell the starter house), so the whole thing is a short-term experiment. 

I found the company based on a referral from a colleague who is in a similar situation.  The property manager helped me get the place rentable for time and materials at less than it would have cost me to do it myself, and also got more done in two weeks than I had been able to do in two months.

My colleague has since experienced her tenant failing to pay rent on time, and within a few months, the property manager had the tenant evicted and a new one in their place.  Maybe that doesn't bode well in terms of their selection criteria, but I was impressed at the communication and the speed with which the issue was resolved.

If I stay in the game and end up with enough flexibility in my schedule that I could promptly address tenant concerns/issues, I may consider doing it myself, but I have to say, I'm happy with the company I'm working with, and getting the financial statements in the mail each month is the right level of involvement for me, at this point. 

salmp01

  • Stubble
  • **
  • Posts: 120
  • Location: Minneapolis, MN
Re: Our first rental property - manage ourselves?
« Reply #17 on: November 20, 2012, 01:12:47 PM »
Quote
  I do not use Craigslist.  Nothing but flakes and con artists.  Some of the rental sites are better.   The most important thing is to screen your tenants.  I have several long term tenants, some over 10 years.  Turnover is costly, so I try to make those folks happy.

I own/manage nearly 20 condos and town homes and I use craigslist almost exclusively.  In the 4 years Iíve been doing this Iíve had no evictions and Iíve had 100% occupancy.  Hereís what I do for advertising.  I create an ad on postlets.com.  There used to be a charge but now itís free.  Once you activate your ad will be posted to Zillow.  Once you ad is created you can cut and paste the entire ad in craigslist (itís very easy to do) which will give you up to 18 pictures on your craigslist ad.  Itís very important to make sure that you renew this ad every 48 hours.  Prospective tenants will typically only look for new postings.  You can also use postlets to run a credit and criminal backup check for a reasonable cost

Advertising and meeting with prospective tenants is the most fun so don't pay someone to take your fun away!


Michento

  • 5 O'Clock Shadow
  • *
  • Posts: 9
Re: Our first rental property - manage ourselves?
« Reply #18 on: November 30, 2012, 01:04:18 PM »
Thanks for the tips, Salmp01. I'll check out that site. :)

thurston howell iv

  • Bristles
  • ***
  • Posts: 415
Re: Our first rental property - manage ourselves?
« Reply #19 on: December 06, 2012, 06:26:14 AM »
I've owned and managed a few SFH's for several years. I only advertise on CL and have not had any issues... I've rented to students, singles, families, and allowed pets. I do my own management and honestly have not had any major issues except for maybe the frat guys throwing beer bottles in the pool... I need to check out that postlets.com site... Sounds like another extra pool of people to reach.

totoro

  • Handlebar Stache
  • *****
  • Posts: 2098
Re: Our first rental property - manage ourselves?
« Reply #20 on: December 06, 2012, 11:10:55 AM »
Postlets.com seems great but it only works in the US - doesn't work in Canada.

JasonK

  • 5 O'Clock Shadow
  • *
  • Posts: 24
Re: Our first rental property - manage ourselves?
« Reply #21 on: December 11, 2012, 10:17:07 AM »
I recently rehabbed and rented out a house in Dallas (my first residential property) and went through a lot of the same questions.  After all, we've all heard the horrors of property management.  Ultimately I decided to rent it out myself, to gain experience, to save money, and because there were a lot of clauses in the property management contract that I didn't like (they kept all late fees for example).

I'm glad I went the 'self management' route.  Here's what I did

1) got my realtor to provide me all of the 'standard' Texas forms.  Lease, application, move in checklist, pet addendum, etc.  If you want I can provide

2) I listed the property online via three sites:  a) Craigslist (poor results, which surprised me), 2) Rent.com (decent results, ultimately got my renter this way), and 3) Rentbits.com.  Rentbits just pushes the ad out to like 70 sites, most notably Zillow and Trulia.  I got most of my activity from Rentbits.  No yard signs.  No local newspaper.  And I didn't have my realtor post on MLS (this just defeats the purpose of saving money by doing it yourself)

3) This next suggestion came to me from another investor, and I was hesitant about it at first...but it was GENIUS.  I installed a Kwikset Smartkey Keyless Entry Deadbolt (model 909).  Essentially this is a lock with a master key (that you retain yourself and NEVER give a copy to tenants), and a touch keypad that you program up to two codes for. 

This saves you time and money three ways

First, no locksmiths.  Tenants love it.  And you have a master key to get in any time you might need.  Tenants can provide the code to handymen, maids, guests, etc.  Changing the code is simple after move out.

Second, this allowed me to provide the code to plumbers, electricians, painters, etc during the rehab, without me having to meet them (I just made the code the address of the house, so it was easy to remember).   Occasionally I might change the code if I was a bit worried about anyone (maybe make it the address backwards the next time). 

Third, once it was time to show the property...guess what?  I never met anyone at the place.  I asked them to text me a photo of their drivers license, and once received I texted back the code and told them to explore the house at their leisure.  I changed the code every day during this 'showing period' (and told the prospects that the code was changed daily).  Prospects loved having time to look at the house without me hanging over their shoulder, I loved it because I could go about my day job, and it rented to the second person who looked at it.  Naysayers will point out the risks of doing this (damage to your property, theft), but come on...you have a copy of their DLand most people in this world are honest.  If they trust me with a copy of their DL, I can trust them to walk the house without me.  I also offered to meet them after hours and show the house if they were uncomfortable sending me the DL, but they all were fine with it.  Oh, and I left copies of the applications in the house for them to take if they were interested.

4) There are tons of online sites that you can pay $39 and have them run a background & credit check.  I used one, forget who it was, but there are plenty

5) I required a minimum two year lease.  This was another good suggestion from an investor.  My tenants actually asked if they could sign a three year lease to lock in the rate a bit longer.  If your place is freshly rehabbed and priced well, you can potentially avoid the higher-turnover tenants by requiring a two year lease up front.  My house rented in 4 days.

6) And finally, be a good landlord!  Treat the tenants with respect.  QUICKLY fix any problems.  There was one small leak under a sink once the tenants moved in, and I had a handyman repair it the next day.  Tenants respond well to good communication and quick action.  You can do this as well or better than any property management company.

Hope that helps!
Jason

Hamster

  • Pencil Stache
  • ****
  • Posts: 623
Re: Our first rental property - manage ourselves?
« Reply #22 on: December 11, 2012, 11:01:08 AM »
I required a minimum two year lease.  This was another good suggestion from an investor.  My tenants actually asked if they could sign a three year lease to lock in the rate a bit longer.  If your place is freshly rehabbed and priced well, you can potentially avoid the higher-turnover tenants by requiring a two year lease up front.
Two year residential leases may not be enforceable depending on where you live. In Washington State, the maximum lease term is one year in landlord/tenant law--according to at least one online source, you may be able to do 2 years if it is notarized (?). If you're not sure, it's worth checking State/Local statutes.
« Last Edit: December 11, 2012, 11:20:56 AM by Hamster »

arebelspy

  • Administrator
  • Senior Mustachian
  • *****
  • Posts: 27774
  • Age: -999
  • Location: Traveling the World
Re: Our first rental property - manage ourselves?
« Reply #23 on: December 11, 2012, 12:24:05 PM »
I installed a Kwikset Smartkey Keyless Entry Deadbolt (model 909).

I prefer this model: Schlage BE365 V CAM 609 Camelot Keypad Deadbolt
http://www.amazon.com/gp/product/B00486U3WW/

Supports 19 codes instead of just 2.   I tend to use regular locks, but do own two of those as well.
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with two kids.
If you want to know more about me, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

HawkeyeNFO

  • Bristles
  • ***
  • Posts: 290
  • Location: Moose Scrotum, Alberta
  • Retired at 44.....back to work at 45
Re: Our first rental property - manage ourselves?
« Reply #24 on: December 11, 2012, 01:28:47 PM »
Maryland requires that you offer a 2-year lease.  You don't necessarily need to sign one, but state law says landlords need to offer them.  Maryland also requires 3% simple interest on per year on security deposits. 

needmyfi

  • Stubble
  • **
  • Posts: 213
Re: Our first rental property - manage ourselves?
« Reply #25 on: December 20, 2012, 03:47:05 PM »
Just to add one more, do it yourself.  Bought 4 plex in 1986 when I was 29 and have been a landlord ever since.  Currently have only one totally paid off house with separate mother in law rented to one family that uses apt for home office.  There is nothing that beats meeting tenants face to face imho.  Used to advertize in Whole Foods Bb,  now use public library and small coffee house in rural Ga.  Also word of mouth.  Obviously this might not work for multiple properties. Had one tenant for 12 years who found most all my other tenants for me.  Good tenants are the key. 

Have always allowed pets, had a lab that scratched the front door to shreds, cost me 50 bucks to replace at salvage yard.  Had another cat pee repeatedly on carpet, did not shampoo out, so new carpet in one room, no big deal since tenant was there probably there 3 years.  Other than that no problems.