Bad tenants are almost universally a result of bad screening.

Going to look at some properties this weekend! Nervous but motivated. Still a ton of research and learning to do.

The more I research and run numbers though, the more I think I'm going to have to go outside my area.

Bingo.

I dint dare charge my tenants to let them in if they made an easy mistake of locking them selves out.
I like my tenants, I live 700 yards away, it’s easy for me.

BUT, I had an idiot lock himself IN his unit. What an idiot. He turned the handle, the nylon square inside the hands spun and the handle turned but nothing mechanical worked anymore. I had to scurry up the low balcony, have him let me in sliding door, from the inside you can see the backset. He got me a butter knife and I slide the lock mech into backset.

What a fuckin idiot, he was a pharmacist, has zero “handy” skills and he should never own anything himself ever.

Correction:

He made sure he received 10% from anyone who worked on the OWNER'S places.

I'd fire that guy immediately. He's dishonest and likely stealing money in other ways.

It's not uncommon for out of state apt managers to report having vacant units while collecting rent from people living in them.

Have been looking at properties the last couple weeks. Found one we are interested in and along the way I've had my insurance company price quoting each property to get an idea of what that is going to cost. The pricing seems very high and has a bunch of stipulations that are confusing considering what we are trying to do. Are there any insurance companies that specialize in multifamily rentals?

We use a property manager for our rental property and she is quite hardcore when it comes to screening, I do feel that's the most important part of the process. I'm also very happy to have gone with a property manager, well worth the money for that extra layer of protection and expertise, not to mention that she handles stuff when we're out of town (like once a broken front door lock) which gives us peace of mind. We've been very happy with our rental, hopefully we can get a second rental property in a few years.

insurance should be inline with your personal home (assuming you are doing a SFH rental)

Maybe $100 more annually

Yes

I have not had much success, but the process will be different for every county/taxing agency.

In short you will need to prove why your value is more accurate then what the assessor came up with.
If a recent purchase then use comps and good solid logic with you math.
They use a software that takes in account #Bed/Bath sqft, etc... there is a condition factor but they will shoot high IME.

If you are more than 10% high to comparables then it is worth fighting if you are holding the property for any amount of time.

Good luck

My situation - I'm a complete amateur. I have one condo that I used to live in. Instead of selling, I kept it and rented it. I've only ever had 2 renters in there over the last 11 years. The first 6 ended up being a couple - the guy I knew from High School. They paid on time, every time, like clockwork. When they were ready to move on, I had a friend & his family in need. Yes, I sense all you veteran's sirens going off - but I wanted to help. The friend needed to move, and wanted to come to this community for the schools, safety etc. I was happy I was able to help. It was good for a long time. I'm not sure I ever really received rent by the 1st of the month and usually a casual text got it sorted out. Well, somewhere along the line, nothing to do with renting, we're not friends anymore. I'm actually not sure why, I think it has something to do with coaching kids in sports somehow, but again, just guessing here. Anyway, he won't speak to me, I don't care about that. Unfortunately now rent is going past the usual 1 week-10 days after the 1st. Now it's more like 15-25th of the month. I've started writing them "late rent" letters with a $50 late fee. I'm looking forward and I don't know what to do. I don't want to make them move. They have no credit, probably no other real good options. They still have a Sophomore daughter (2 others graduated already) that will go through my High School soccer program. So, I really don't like the dad, who for whatever reason has decided to be disrespectful and create some problem. But the daughter didn't do anything, I actually like her. Have any of you not renewed leases due to late payments? Is this even grounds to do anything? I really just wish they'd either pay <close to> on time, or let me know there was a problem doing so. Any advice is welcome.

Tough situation. I’d rather have a vacant house than trying to chase rent every month cause technically it’s almost the same thing. You’re not getting rent when it’s empty, and you’re not getting rent when there’s wear and tear being put on the property also. What’s the lease situation? Is there a written lease? You should always always always have a signed lease agreement. Doesn’t matter if it’s friends or family. If lease is almost up, don’t renew and ride it out. If there’s a lot of time left then I would tell them that you will be drawing up eviction paperwork. This is a business. Always try to be civil though and talk with them to explain your situation. You don’t need them ruining your house especially if they don’t have money to get back thru the court for damages. Like I said this is a business for you. They wouldn’t like it if their work didn’t pay them their check on time. And then on top of it delaying more and more each month. This is no different.

Lease was originally 1 year, now we add 1 year extensions each May. So, current one expires in May. They are paying, just getting to the point it's almost a month late.

FYI I never charged them a security deposit - lease says no animals. Originally he agreed to that but then they "couldn't do anything with the dog" and have kept it there ever since.

Again, little things that aren't a big deal for friends who pay - but much bigger deal when they aren't friends who pay <on time> anymore.

I understand they are paying, but it’s getting later and later. Soon they will be a month behind like you said. It’s starting to get out of hand. You know the saying, give them an inch and they will take a foot. In this case it will turn into a mile before you know what hit you. You have to look at it as a business and have to be tough. They have no skin in the game at all. Especially since there was no security. They have nothing to lose by pushing the limits with you. Stop the bleeding now.

Exactly this.

They are going to bend you over. Serious. What better or worse, them “having” to find a place and someone even more doesn’t like you..... or you getting fucked over? Time for an ultimatum, rent over 15 days late (I’m my province) is eviction day. Screw the lease, they already broke it

I know the easy choice

This is business and unfortunately that means you need to remove the emotion.
I give everyone 1 chance. I sugest:
-Message them via email/text/ whatever your normal line of communication is.
-Let them know you would like to talk in person about upcoming lease renewals.
-Remove emotion and tell them plainly that you must have rent on time going forward. Rent is due by the 5th (or whatever date)
-Going forward if you do not get payment on time, then you get to learn about the eviction process quickly.
-They currently view you as a push over and for good cause (you have let it slip for a while now)

Sounds like a good place, good location, and possibly below market rate if they have been their for years. You will find new and better tenants with less headache.

I honestly have really only 3 rules
1. Pay rent on time everytime
2. Take care of the place
3. Let me know immediately if there is an issue (leaky pipe, broken lock, etc...) so I can fix immediately and prevent a bigger problem.

Follow those rules and you will only see me 1x every 6 months when I do a maintenance inspection.
Follow those rules and your rent stays the same for as long as you live there.

Deviate and you get 1 chance to remedy. Don't remedy and I will enforce the lease.
I have thus far not had to evict and hoping my screening process continues to uphold that trend.
I have had to talk with a few tenants but so far they have all dealt very positively with the business interaction and me treating them how I would want to be treated.

Big picture > screen better next time and remove the pity case from your decisions.

So I just received word that my offer on my first 4 plex has been accepted. I thought it was overpriced and offered quite a bit less than what they were asking. I didn't like their counter offer, so I was ready to walk away. My agent said, rather than just walk away just tell them you aren't going higher. I said that was fine, expecting it to be over. I was surprised to hear they accepted it.

Now for the freaking out about if I made the right decision or not.

The freaking out is also the exciting part. Congratulations. Is this your first rental property or first multi unit? There’s lots of good info in here if you haven’t read it all yet. I’d say good luck, but if you follow some of the advice here you won’t need luck.

First ever rental property. Yea, I've been reading here, and I've done a ton of reading/podcast watching from Biggerpockets etc.

congrats! I also find the reddit landlords (i think that is what it it called) good info. Not always accurate, but good to read others real experiences

So I could use some advice. My sister and her fiance recently purchased a new house and plan to rent out the old house rather than sell it. The agent they worked with on buying the new house has offered to manage the property free of charge because he wants to get some experience in the rental management area. He's listed the house for rent and has already found a renter. The rental checks will be sent to the agent, who in turn will deposit them in a bank account sister's fiance has set up. Is it me, or are there some major problems with this arrangement, or am I being overly skeptical here?

It seems insane to me. Why do they need a property manager? Are they far from the property to need an extra set of eyes? Are they just inexperienced enough that they can’t find and call a pro to fix something if they can’t fix themselves? These are reasons that a property manager is maybe needed, but still a waste of money in my opinion. I would never ever trust someone else with MY money. I get paid, then the manager gets paid. No questions asked. It’s your property. This deal is bad bad bad.

Well, yeah, they are basically terrible at fixing anything. I've been buying him tools or giving him my extras for years, but I've learned, he's just not a handy type of guy and it's easier, faster, and cheaper if I help out. My problem isn't so much with them having a property manager, because both are pushovers, it's the arrangement itself. Nothing in writing, the agent has no financial responsibility or benefit, so there's nothing holding him to the property. I'd like to avoid them finding themselves in a bad situation, as they now have a new 6 month old baby, but I think I'm going to lose this argument.

Exactly why I said that I never trust anyone with my money. This guy is nothing more than someone who will help them either A: find a renter and take their calls if something comes up, or B: someone who handles any problem that would arise. Here’s the thing with B. The manager would still have to tell them the issue and get approval to set up the fixit person. Plus he wouldn’t be paying the bill. He has no money out of his pocket either. It’s not his house. He’s not paying the taxes and carry the insurance etc. Yourfamily gets the rent, the manger gets paid. Period. Any other way is putting a gun to your head

I don’t agree with this. They can pay the manager to do whatever they want him to do, ie find renters, find professionals for repairs etc, but they should collect the rent and put into their own acct or whatever. This is their business and they use money however they want. There’s no need for the manager to collect the rent and then deposit himself. The owners can then pay him for his job. Plus if he screws up or doesn’t do what he’s supposed to be doing they can cut him off with no issues.

It is my understanding that quite often the management company collects the rent and they pays the property owner.

One reason it to help legally isolate the management from the physical asset. For example some one sues and they are suing the management but can’t get the property.

Other reason is obviously because the manager wants to secure their payment and also money in reserves for repairs as needed.

I can understand that, but these days it’s very simple to make money transactions. Therefore I see absolutely no reason to add another cog to the system. We have 15 single family rental homes including one that was in another state. It’s very easy to accept rent.

1. Mailed or hand delivered check
2. Direct deposit into an acct
3. Hand deliver cash.

It’s rare that I’ll take cash but if I do, it gets documented into a ledger book and is signed by us and the tenant, and tenant gets a receipt. Always have a paper trail of some sort in case. This is reason why I don’t need a agent to take my money. Also, what if agent doesn’t deposit check? What if agent says they never got check but tenant says they paid them? It’s just more bullshit I don’t need. That’s just my two cents. Take it with a grain of salt I guess.

Now going back to the rental in another state, we absolutely had a property manager to keep an eye on the property. If there was a problem they look at it and then relayed an opinion on options to rectify. I already knew the problem though because the tenant already informed me. So now the agent is earning the money I pay them to assist in the task of fixing the problem. If I didn’t agree with the agents opinion I still got on a plane and went there. It’s the cost of business because that’s what this is. This is a lot of your money that you’re dealing with.

Btw, I agree that a property manager can be good and accept rent or whatever if your dealing with multiple properties or multi units. Curiousgeorge originally asked about his sisters house so I thought it was unnecessary for a manager being paid to learn how to do this. They need to learn themselves also. Plus I wouldn’t trust someone’s opinion who hasn’t been around the block so to speak with my money. Just trying to look out for their interests

That's what my property manager does. She gets the rent check from the tenants, writes me a check for my cut and then drops it off usually same day at my place. She lives near me so no need to mail it. I do wish she would do it electronically as I do all my payments that way but she is old school on that and wants to give me a check I scan her check via phone app and deposit it same day that way.

We purchased two quadraplexes (8 units) 25 years ago. We manage them personally and do all the repairs (or supervise the repairs if it's major). We've never had any issues with anyone. One tenant we didn't renew the lease because they were being a little too loud for their neighbors. One tenant left without cleaning. The rest have been great and we have long-timers in most of the units now.

For us, the key to landlord happiness is keeping your tenants happy. Keeping a tenant long term is far more financially advantageous than the cost of a lost month of lost rent, repainting, and repairs during a turnover.

My advice:
List rents about 5%-10% under market rate to encourage a good pool of applicants. Pick the best and be picky, picky, picky when doing so.
Only raise rents between tenants or when absolutely required.
No lock-out fees or other naggy money grabs. People make honest mistakes... no biggie.
Doing little things like adding a new doorbell button or a planting a new shrub go a long way.
Be responsive to repair requests.
Keep a good eye on things that impact quality of life, like trash building up in the alley, or a super noisy AC compressor.
Treat your tenants with respect and they will reciprocate.

Edit: Oh, and Cozy.co allows you to set up automatic rent payments. Hassle free for your tenants. Regular, on time payments for you. Highly recommended.

I use Cozy to collect rents from all but one of my tenants and I couldn't be happier. Super easy setup for everyone involved and no fees involved.

On the contrary, you're only insuring the building, not the contents? My rental insurance is only about $475 a year on each house - ?

reality studio,do you have any info or advice on investing in condo/apt in the fresno/clovis,bakersfield area?

you should have a larger liability that will offset.
My similar sized rentals are possibly $100 less annual premium than my personal home.

(and likely you should have a separate umbrella)

My one word of advice is...
Screen your prospective tenant.
Do a background check up front and you will save yourself future grief.
All potential renters are nice as pie when you give them a tour and their references are always good cause it's friends and family, etc.

As far as location, when we bought the home I used for filming and renting out rooms to models I knew they would be young, female and likely have no car. So I picked a place catering to that which in this case was a place walking distance to everything important to that demographic. I can't speak to the locations you mention but point being I just catered it to my use case at the time.

When I decided to turn that home into a normal family rental I thought sure I could try and do it myself and save a few bucks but instead decided for peace of mind to have a professional handle it for me. I see it as insurance, another set of eyes and experience to make sure everything goes smoothly. The property manager I used was recommended to me by my handyman, a dude I've used for years and who handles many homes in the LA area. Once he connected me with her we clicked and got things rolling. Like others have said here, background checks are the most important part by far and she was very hardcore about it. The amount of detail she pulled up was staggering along with interviewing them to make sure stories match the data, that's what gives you the full picture on their legal history, financial history, and so on. What's good with a property manager is you can still be hands on if you like, so I also went over all the background checks as well and we both made the decisions that way. Side benefit is a property manager can handle things when we're out of town as well which is super convenient.

Having said all that, ultimately I'm not an expert at this sorta thing which is why I feel much better knowing one is involved. She handles it all for the most part so if you want more detail on how to go about doing this all yourself I'm probably not the right person to ask.

When I bought my first place (a 4 unit) I liked my complainers. The residents that didn’t complain worried me. When perspective residents ripped on stuff..I liked it. I knew they’d be good renters. I knew guys who couldn’t handle a duplex with one renter next door. They acted like it wasn’t a job. I always bent over for the complainers.
I have 800+ residents now, mostly from owners I work for, but it’s been all good.
15 years without an eviction!! That’s how you do it. 30 years in now..I have maybe..almost..seen it all

I see a couple people posting who manage their own things to post the rent under 5% to 10% what they should go for...at that point, shouldn't you just use a property manager (who charges 10% usually) and then not have to do anything at all? Save your time, put the work on someone else, and make the same money?

It's kind of like listing a house FSBO at a 6% discount to save yourself the 6% realtor fees...why not just charge the full amount and let the realtor do all the work?

Yup, plus property managers often have a large clientele base looking for rentals because they are also realtors like mine is, so they can rent it quick meaning less carrying costs and higher potential rent. I guess the main caveat is finding a good property manager, but if you feel you can vet renters then you can probably also vet a property manager and find a good one.

Property managers typically get 1 month rent commission plus 10% of monthly rent.
That is a very large cut for doing very little for me.

I also dont enter into situations where the motives of someone I am hiring are different than my motives.
Agents often want to get the unit filled, care little about proactive maintenance, and actually benefit from turnover (1 month commission each time)

As a personal landlord, I have had no problem finding tenants so see no value in having someone else make that decision for me.
I desire to have 2 year tenants become 5 year and 5 year become 10 year. I want to decrease turns as each time I do turn it is effort and money yo clean, paint, etc...

If an agent works for you, then by all means go for it. I like making sure I find the right people and if/when it goes wrong it is on me. What is the agent doing when 'oops I got you a crap tenant that trashed the place and did not pay rent' ?

I can totally see using an agent when you dont live near your place or they bring value for a skill you dont have.
In totality, I see little time or value in paying someone ~15-20% of my yearly take on a rental for the little effort they need to put in.

Again, if it works for you then great, but around here that is like paying 2500-3000 for someone to fill a likely sub-par tenant and then collect rent.

It’s 2020 and not like the old days when most people had a small workbench and/or a basic set of tools in the garage or basement.
I’ve built homes for customers who don’t even own a screwdriver!

Lots of people out there who are educated as far as whatever business they work in but can barely function above the mentality your average 5th grader.

I’ve had homebuyers call several years after they moved into their homes and say “ I just locked myself out of my house... you have a extra key on file at the office right?
WTF? Scary stupid...

Family business mainly industrial leasing with some residential -

We manage out own industrial properties but thinking of handing over to a management company as the laws and regulations keep increasing the work load.

Our residential properties are handled by real estate agents due to the difficulty in evicting tenants if you don't do everything by the book.

INDUSTRIAL PROS - Much better returns, generally less call outs, easy to evict
CONS - Sometimes hard to get new tenants, appreciation generally a lot less than residential.

RESIDENTIAL PROS - Easy to lease, good appreciation
CONS - Lots of callouts, lot of protection for renters, very low returns

Screening is very important and another tip is to rent at a lower price rather that have it vacant for weeks holding out for a higher amount.
Also make sure to maximise your tax benefits/claims

The property manager I use for my property is very good. The minimum length they will sign a lease for is 2 years, and they try to do 3 and always try to renew the lease when it ends so the house doesn't sit empty. The average length of tenants staying with them is I think close to 4 years. They are also proactive on maintenance (we had a tree that was going to cause a problem with the house and they contacted us for approval to cut it down). You can get property managers that will do the same thing as you if look a little bit.