First time DIY Property Management

[TeCKis300]

All,

I’m on the cusp of soon purchasing an investment property. It’s a 1bed/1bath turnkey renovated condo.

I’ve engaged several property managers, but I’m also keen on possibly tackling this myself. I’m very handy, and have good people/management skills. This would be easy for me, unless I decide it’s not worth my time and effort, and turn it over to a pro.

And this is where I turn to you.

Does anyone have any good pointers or links to DIY renting resources as well as guidance? Rental applications, credit check sites, lease agreements, auto-deposit strategies?

Also, some basic questions as:
1) What is a typical asking security deposit? 2 mths rent?
2) 6 month or 12 month lease? Do you offer a slight discount for longer?
3) Any additional sage advise would be appreciated!

[spdrun]

(1) 1 month deposit
(2) 12 month lease by default, can negotiate the rate for a shorter lease. If the tenant chooses to break the lease and gives a few weeks’ notice, let ’em. No reason to keep an unhappy tenant in place.

[no_such_reality]

As said, one month and twelve months.

As for mangement firm, no way unless remote, like two plus hours away.

The work is two fold, screening and selecting a tenant and operations grunt work.

The grunt work boils down to cashing the check, scheduling preventative stuff like AC/Hvac service twice a year and handling the hopefully odd as in (annual) call for something flaking out. Plus the annual visit to view the rental for wear concerns. Granted, a condo for a single something in a party zone may have completely different ops requirements.

The screening work is the critical part. Review the credit situation, talk and LISTEN to the tenant and pick.

When the tenant moves out, you schedule cleanup, listing and refurb if needed. Repeat screening process. Done right, no reason to not have a tenant that stays long term.

A PM firm will churn your tenants as most have clauses where they get tenant placement and listing fees.

[spdrun]

TBH, for a condo, you don’t need management parasites even if you live much further away. Just…
(1) Go through the place with a fine-tooth comb before renting it. Replace anything that may break.
(2) Have the numbers of tradesmen on hand (electrician, plumber, handyman).
(3) Rent to tenants who need you more than you need them.

[Hatfield]

Buy the NOLO California Landlord’s book. I promise you it will be the best $30 you’ll spend on your rental unit. Comes with rental agreements, and very clear instructions on how to screen tenants and manage your property in accordance with the law: http://www.amazon.com/California-Landlords-Lawbook-Rights-Responsibilities/dp/1413320864/ref=sr_1_1?s=books&ie=UTF8&qid=1458174668&sr=1-1&keywords=california+landlord

And yes, have a list of plumbers, electricians, etc, so that if something happens you can get it fixed in a timely fashion. Stuff always seems to happen at the worst time. I had a tenant’s sink back up while they were cooking thanksgiving dinner for family.

My advise would be to charge on the high side, be very picky about choosing tenants, and never raise the rent on a good tenant. You do not make money on turnover.

[FlyerInHi]

It depends on your personality.
Try it yourself first. And you can decide what you want later. If anything,’it is a good learning experience. I personally like being a landlord. I’m not afraid dealing with people directly. But I know some people hate it.

[TeCKis300]

Knew I could count on you guys. Great nuggets in there! Will definitely pickup that book.

I’m a professional cat herder at work, so managing this doesn’t worry me.

So what’s the general strategy for picking up rents? Do you all prefer paper checks? It’s only like 20 minutes away from home so some face time and regular visual of the place is probably not a bad thing.

I heard some mention of auto-deposits. For those that use it, what are you using? Direct wire, paypal, etc?… you know, in case I get lazy.

[plm]

First renter mailed checks to me. Second renter deposited directly to my checking account at the bank which makes it much easier for me.

I’m one of the ones who hate being a landlord but that’s my problem, not liking to deal with people. Inadvertent landlord renting out my old place when I’ve bought a new home. Money made from renting doesn’t seem worth it but the appreciation is good/great. Want to get out but I don’t think there is a good exit strategy without being hit hard on taxes. It’s not too bad as long as the rent gets paid. Otherwise it sucks.

Good luck being a landlord. I think the key is finding a good tenant and making sure they never leave.

[no_such_reality]

Direct Deposit is nice.

Paper check mailed has been fine. (hint, if you’re worried the check is going to be claimed lost in the mail, you’ve picked the wrong tenant.)

When I was a tenant, a landlord picking up the check was always a PIA and factored in me moving.

[TeCKis300]

Agreed, regular visits would be irritating to tenants. More so that they are likely millennials, who don’t like writing paper checks as it is.

[TeCKis300]

Any recommendations on resources to do credit checks?

[spdrun]

There’s a third option. If the tenant doesn’t want to set up DD and you have an account at a nearby bank, train them to deposit the check. Give them 12 pre-printed deposit tickets to do so.

Worked for one tenant for about two years. If she missed a deposit, she got an email, and the problem was corrected within a day or so.

Credit check? What’s that? Never done one. Never had a particularly problematic tenant either, other than one that brought roaches to the party.

Check references, Google, and public social media. Almost better than a credit check in amount of data that can be gleaned. Especially call the references and talk a bit. It’s hard to get 3-4 people to lie in unison.

[SDNative2]

FWIW, (am not a lawyer, don’t give legal advice, different areas attract different tenant types), consider this recent SFR tenant story in a “good rental area of the City”:
1. Personal tenant screening is important. Really important.
2. Property management companies get paid once they put a tenant in your rental.
3. IF you absolutely believe that you must use a PM company to screen your tenant pool, be sure to take the time to personally repeat the exact same screening that you just paid your PM to do.
4. In this pro-tenant state, professional tenants are on speed-dial to the tenants’ rights centers and know how to abuse the gray areas of CA tenant/landlord law and break legitimate lease agreements.
5. Don’t do a 12-month lease in California; it’s security for the bad tenant you’re eventually going to get one day…
6. Do a month-to-month lease: it’s security for you…what tenant wants to move after a month?
7. If you can’t stomach the insecurity of a monthly lease, do a 3-month trial period, then go month-to-month.
8. A tenant can sign/initial, line-by-line, a CAR lease agreement and then break it the next day without repercussion.
9. As long as a tenant pays their rent on time and isn’t doing any known criminally illegal act on your property, a judge may not care that a tenant is breaking ANY other tenet of your lease.
10. Consider joining San Diego County Apartment Owner’s Association and take advantage of their free/low-cost legal presentations. You just may learn the same thing attending those seminars that the excellent but expensive SD landlord lawyer(s) will tell you…

[Coronita]

[quote=TeCKis300]Any recommendations on resources to do credit checks?[/quote]

This one is easy… Experian Connect.

http://www.experian.com/connect/

Basically, you sign up for a free account. From your Experian account, you send an email requesting the tenant prospect to register and sign up and to “share” his/their credit file with you. They pay $20 or so, and then they can share the credit file with you through Experian. Experian sends you an email, you log in and view their credit file. They don’t see your SSN, and you don’t see their SSN. I use this for all my tenants. I don’t accept “hand copies” of credit files they email or fax me (because they can be doctored).

As far as employment verification, I just get them to send me the phone number for to their HR department, and have them sign a consent for employment verification screening. Then I contact the HR dept for employment verification WITH income verification. If it costs money, I tell them to pay for it.

I don’t do normally do background checks if the employees work at reputable company. I assume the reputable company already did a background check prior to hiring them.

If you need a property manager, I can recommend one in South County. He probably does north county too… PM me.

[Coronita]

[quote=TeCKis300]Knew I could count on you guys. Great nuggets in there! Will definitely pickup that book.

I’m a professional cat herder at work, so managing this doesn’t worry me.

So what’s the general strategy for picking up rents? Do you all prefer paper checks? It’s only like 20 minutes away from home so some face time and regular visual of the place is probably not a bad thing.

I heard some mention of auto-deposits. For those that use it, what are you using? Direct wire, paypal, etc?… you know, in case I get lazy.[/quote]

As far as how to collect the rent check…. The first month check and deposit I always require a bank check and require it to clear before they move in. So I require it at least 1 week before move in date. Subsequent rent, I just tell them to send it to me at a PO Box at least 1.5 weeks prior to the first on the month, and I would hold it until the first of the month. A lot of tenants use bill pay and just have the bank mail me a check to my PO Box.

I offer a 3 day grace period, with a 4-5% penalty for being late. But you should note: technically late fee penalties may/may not be enforceable and some cases that challenge whether they are legal or not. The way I explain it to tenants is, make everyone’s life easier and just don’t be late. However, in the rare occasion that my tenant was late (probably due to the delay in the mail), I never collected a late fee.

If you need a property manager, I can recommend one in South County. He probably does north county too… PM me.

[Author]

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