Residential rental property managers- anybody use one? - Page 1

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[ARCHIVED THREAD] - Residential rental property managers- anybody use one?

Posted: 8/16/2016 9:07:52 PM EDT

My wife and I have been toying with the idea of buying an inexpensive house to rent out, just to get our feet wet.

We are good with home repairs and such, but would just as soon not have to deal with finding and weeding out tenants, dealing with phone calls at all hours of the day, etc etc. Basically everything that makes having rentals distasteful

There are a couple outfits in town that advertise they are property managers. They are either realtors who are go getters, or younger entrepreneur types.

Is it worth our time to talk to one? Any idea of what one would charge?

Posted: 8/16/2016 9:13:21 PM EDT

[#1]

Yes we use one to manage our properties. They take 7% monthly and 60% of first month's rent. 40% on a contract renewal.

For that they take care of any and all issues on the property.

I am not a handy guy and I have two jobs - I definitely don't have time to be getting up at 2 in the morning to go fix a water heater. For me it is more than worth the cost. I just sit back and collect checks...

Posted: 8/16/2016 9:15:24 PM EDT

[#2]

Quoted:
My wife and I have been toying with the idea of buying an inexpensive house to rent out, just to get our feet wet.

We are good with home repairs and such, but would just as soon not have to deal with finding and weeding out tenants, dealing with phone calls at all hours of the day, etc etc. Basically everything that makes having rentals distasteful

There are a couple outfits in town that advertise they are property managers. They are either realtors who are go getters, or younger entrepreneur types.

Is it worth our time to talk to one? Any idea of what one would charge?

View Quote

around here, 8-10% a month is normal for fees. some advertise a flat fee of $100/property. for listing a new property, i think it's 75% of 1 month's rent.

there are websites/services you can use that you pay and will screen tenants for you.

basically know that they are renting b/c they can't buy so bad credit will be common. that doesn't necessarily mean they'll be a bad tenant.

most important thing i look for are paystubs and w2s. rent should be no more than 60% of their total net income.

also do ask for previous landlord references and call and make sure they paid on time, etc...

ask about evictions too.

with 1 property and assuming you get decent tenants, you shouldn't get that many calls.

Posted: 8/17/2016 2:39:02 PM EDT

[#3]

Here it's 8% plus the first months rent.

I use one for half of my properties because of time constraints. I'm a better manager than they are but they do pretty good. I keep a close eye on them because any time they need electrical, plumbing, etc done on my units, my company is the one that does it so I know they can't get a kickback from contractors. That helps me stay in the loop.

For 1 property, figure 1 hour of your time per month to manage it. That trends down to .5 hour as you scale.

That does not count doing the work yourself, that is coordinating someone else to do it. Example, call a plumber to unclog a drain.

Posted: 8/17/2016 5:40:13 PM EDT

[#4]

Quote History

Quoted:
Here it's 8% plus the first months rent.

I use one for half of my properties because of time constraints. I'm a better manager than they are but they do pretty good. I keep a close eye on them because any time they need electrical, plumbing, etc done on my units, my company is the one that does it so I know they can't get a kickback from contractors. That helps me stay in the loop.

For 1 property, figure 1 hour of your time per month to manage it. That trends down to .5 hour as you scale.

That does not count doing the work yourself, that is coordinating someone else to do it. Example, call a plumber to unclog a drain.

View Quote

that sounds about right averaged out over a year. most of the time you won't get any calls but sometimes you'll get a call for the a/c, dishwasher or microwave. my quiet properties involve me logging into my account to ensure the deposit was made. if they are late, i spend some time texting them and chasing them down.

+1 to you being a better manager than a company. a friend move out of state and used a property mgmt company. tenants kept reporting leaks and prop mgmt kept sending out plumbers and sending them the bill. it was finally determined that it was the a/c drain line that was clogged and leaking. prop mgmt never bothered to read the plumbers report and kept calling them out and the landlord had to pay all those bills that didn't fix anything.

Posted: 8/17/2016 8:41:19 PM EDT

[#5]

Thanks for the input.

My next question is:
Will we have a hard time finding someone who will give us a loan on a rental?
There are a ton of 25k-40k properties that people snatch up and rent for 350-500 per month.

We can put 20% down, but would take years before we can pay cash and I'd like to get into the game sooner rather than later.

Posted: 8/17/2016 9:28:13 PM EDT

[#6]

Quote History

Quoted:
Thanks for the input.

My next question is:
Will we have a hard time finding someone who will give us a loan on a rental?
There are a ton of 25k-40k properties that people snatch up and rent for 350-500 per month.

We can put 20% down, but would take years before we can pay cash and I'd like to get into the game sooner rather than later.

View Quote

Shouldnt be an issue. People have been borrowing for rentals since the dinosaur times. Not every bank will but they are definitely out there. I put my house up for my first rentals bc i didnt have cash.

Posted: 8/17/2016 9:35:41 PM EDT

[#7]

Quote History

Quoted:

that sounds about right averaged out over a year. most of the time you won't get any calls but sometimes you'll get a call for the a/c, dishwasher or microwave. my quiet properties involve me logging into my account to ensure the deposit was made. if they are late, i spend some time texting them and chasing them down.

+1 to you being a better manager than a company. a friend move out of state and used a property mgmt company. tenants kept reporting leaks and prop mgmt kept sending out plumbers and sending them the bill. it was finally determined that it was the a/c drain line that was clogged and leaking. prop mgmt never bothered to read the plumbers report and kept calling them out and the landlord had to pay all those bills that didn't fix anything.

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Quoted:

Quoted:
Here it's 8% plus the first months rent.

I use one for half of my properties because of time constraints. I'm a better manager than they are but they do pretty good. I keep a close eye on them because any time they need electrical, plumbing, etc done on my units, my company is the one that does it so I know they can't get a kickback from contractors. That helps me stay in the loop.

For 1 property, figure 1 hour of your time per month to manage it. That trends down to .5 hour as you scale.

That does not count doing the work yourself, that is coordinating someone else to do it. Example, call a plumber to unclog a drain.

that sounds about right averaged out over a year. most of the time you won't get any calls but sometimes you'll get a call for the a/c, dishwasher or microwave. my quiet properties involve me logging into my account to ensure the deposit was made. if they are late, i spend some time texting them and chasing them down.

+1 to you being a better manager than a company. a friend move out of state and used a property mgmt company. tenants kept reporting leaks and prop mgmt kept sending out plumbers and sending them the bill. it was finally determined that it was the a/c drain line that was clogged and leaking. prop mgmt never bothered to read the plumbers report and kept calling them out and the landlord had to pay all those bills that didn't fix anything.

It always irritates me when someone says "hire a pro to do it, collect a check, they will do a better job than you ever will". Thats ignorant and dangerous. I dont have a problem using a manager but you can bet you ass i know what every margin should be and where they can squeeze me and whittle away at my finances. If i choose to manage a property i will do better than some flunky realtor or pm guy ever thought about. I plan to have a manager do all of mine in the next year or two but i will never just sit back and collect a check. You end up with crap like that situation you describe.

If i got two bills for plumbing within 90 days id be calling you wanting a detailed explanation of why the second call wasnt warranty and a very persuasive argument as to why im going to pay the second bill rather than the pm guy who fucked up, the plumber who didnt fix it the first time, or the tenant who is lobbing cantaloupes and other assorted melons down the toilet.

Ive been in the trades a long time so i see the difference in what customers pay vs how they manage their service companies (us). The difference is staggering. The guys that let their manager play fast and loose with service calls can easily spend around 1.5 to 2.5 times more per month. That can be 20 to 40k a month for some of our customers.

I have one customer who is great at it, doesnt spend much to begin with and is so diligent about notes that he gets around 10% off of his bill every month when it isnt much to start with. He wont even pay until i meet his manager and go over the bills then my boss and him meet and go over them. Every month.

I have another customer that has never questioned anything on his bill in 8 years. Never.

Posted: 8/18/2016 4:01:56 AM EDT

[#8]

Quote History

Quoted:

It always irritates me when someone says "hire a pro to do it, collect a check, they will do a better job than you ever will". Thats ignorant and dangerous. I dont have a problem using a manager but you can bet you ass i know what every margin should be and where they can squeeze me and whittle away at my finances. If i choose to manage a property i will do better than some flunky realtor or pm guy ever thought about. I plan to have a manager do all of mine in the next year or two but i will never just sit back and collect a check. You end up with crap like that situation you describe.

If i got two bills for plumbing within 90 days id be calling you wanting a detailed explanation of why the second call wasnt warranty and a very persuasive argument as to why im going to pay the second bill rather than the pm guy who fucked up, the plumber who didnt fix it the first time, or the tenant who is lobbing cantaloupes and other assorted melons down the toilet.

Ive been in the trades a long time so i see the difference in what customers pay vs how they manage their service companies (us). The difference is staggering. The guys that let their manager play fast and loose with service calls can easily spend around 1.5 to 2.5 times more per month. That can be 20 to 40k a month for some of our customers.

I have one customer who is great at it, doesnt spend much to begin with and is so diligent about notes that he gets around 10% off of his bill every month when it isnt much to start with. He wont even pay until i meet his manager and go over the bills then my boss and him meet and go over them. Every month.

I have another customer that has never questioned anything on his bill in 8 years. Never.

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Quote History

Quoted:

Quoted:
Here it's 8% plus the first months rent.

I use one for half of my properties because of time constraints. I'm a better manager than they are but they do pretty good. I keep a close eye on them because any time they need electrical, plumbing, etc done on my units, my company is the one that does it so I know they can't get a kickback from contractors. That helps me stay in the loop.

For 1 property, figure 1 hour of your time per month to manage it. That trends down to .5 hour as you scale.

That does not count doing the work yourself, that is coordinating someone else to do it. Example, call a plumber to unclog a drain.

that sounds about right averaged out over a year. most of the time you won't get any calls but sometimes you'll get a call for the a/c, dishwasher or microwave. my quiet properties involve me logging into my account to ensure the deposit was made. if they are late, i spend some time texting them and chasing them down.

+1 to you being a better manager than a company. a friend move out of state and used a property mgmt company. tenants kept reporting leaks and prop mgmt kept sending out plumbers and sending them the bill. it was finally determined that it was the a/c drain line that was clogged and leaking. prop mgmt never bothered to read the plumbers report and kept calling them out and the landlord had to pay all those bills that didn't fix anything.

It always irritates me when someone says "hire a pro to do it, collect a check, they will do a better job than you ever will". Thats ignorant and dangerous. I dont have a problem using a manager but you can bet you ass i know what every margin should be and where they can squeeze me and whittle away at my finances. If i choose to manage a property i will do better than some flunky realtor or pm guy ever thought about. I plan to have a manager do all of mine in the next year or two but i will never just sit back and collect a check. You end up with crap like that situation you describe.

If i got two bills for plumbing within 90 days id be calling you wanting a detailed explanation of why the second call wasnt warranty and a very persuasive argument as to why im going to pay the second bill rather than the pm guy who fucked up, the plumber who didnt fix it the first time, or the tenant who is lobbing cantaloupes and other assorted melons down the toilet.

Ive been in the trades a long time so i see the difference in what customers pay vs how they manage their service companies (us). The difference is staggering. The guys that let their manager play fast and loose with service calls can easily spend around 1.5 to 2.5 times more per month. That can be 20 to 40k a month for some of our customers.

I have one customer who is great at it, doesnt spend much to begin with and is so diligent about notes that he gets around 10% off of his bill every month when it isnt much to start with. He wont even pay until i meet his manager and go over the bills then my boss and him meet and go over them. Every month.

I have another customer that has never questioned anything on his bill in 8 years. Never.

yep many folks think since they are paying someone, that they are going to look out for their best interest. that's the reason i won't invest in any properties i can't lay eyes on myself. if my tenants call with a problem, i go and verify it. sometimes i can fix it, other times i'll go and make sure it's not something obvious before i call someone to fix it. a property mgmt company isn't going to do that.

Posted: 8/18/2016 4:03:45 AM EDT

[#9]

Quote History

Quoted:
Thanks for the input.

My next question is:
Will we have a hard time finding someone who will give us a loan on a rental?
There are a ton of 25k-40k properties that people snatch up and rent for 350-500 per month.

We can put 20% down, but would take years before we can pay cash and I'd like to get into the game sooner rather than later.

View Quote

you can get loans for rentals but the interest rate will be higher than your typical home loan. i think they loan 70-80% of value as well so bringing 20% to the table may be enough. talk to banks and credit unions.

i've taken out a home equity loan on my homestead to buy a property before.

Posted: 8/18/2016 10:33:07 PM EDT

[#10]

Quote History

Quoted:
Thanks for the input.

My next question is:
Will we have a hard time finding someone who will give us a loan on a rental?
There are a ton of 25k-40k properties that people snatch up and rent for 350-500 per month.

We can put 20% down, but would take years before we can pay cash and I'd like to get into the game sooner rather than later.

View Quote

You'll have no issues getting a loan. Until you apply, and they find out your wife has a $40k CC bill with Nordtroms.

Posted: 8/18/2016 11:07:36 PM EDT

[#11]

Learn how to really analyze rental deals. Most newbies vastly overestimate what they'll take in (assuming 100% occupancy, optimistic appreciation speculation, etc...) and underestimate what they'll be paying (taxes, insurance, landscaping, closing costs, repairs, painting and cleaning between tenants, capital repairs (roof, HVAC, appliances, etc...))

As for management companies, I don't use one. But my cheapest unit is $1800/mo. Most of my tenants are techies and professionals. If I had to deal with low-rent tenants, I might consider it just so I don't have to deal with the slack-jawed yokels.

Posted: 8/19/2016 1:26:17 PM EDT

[#12]

Quote History

Quoted:
Learn how to really analyze rental deals. Most newbies vastly overestimate what they'll take in (assuming 100% occupancy, optimistic appreciation speculation, etc...) and underestimate what they'll be paying (taxes, insurance, landscaping, closing costs, repairs, painting and cleaning between tenants, capital repairs (roof, HVAC, appliances, etc...))

As for management companies, I don't use one. But my cheapest unit is $1800/mo. Most of my tenants are techies and professionals. If I had to deal with low-rent tenants, I might consider it just so I don't have to deal with the slack-jawed yokels.

View Quote

I cant count how many times ive seen people here claim that if the rent is 1000 and the mortgage is 300, you'll make atleast 600 if not 650 a month profit. Easy.

Supposedly theyve done it for years.

Posted: 8/22/2016 11:25:16 PM EDT

[#13]

Quote History

Quoted:

I cant count how many times ive seen people here claim that if the rent is 1000 and the mortgage is 300, you'll make atleast 600 if not 650 a month profit. Easy.

Supposedly theyve done it for years.

View Quote View All Quotes

View All Quotes

Quote History

Quoted:

Quoted:
Learn how to really analyze rental deals. Most newbies vastly overestimate what they'll take in (assuming 100% occupancy, optimistic appreciation speculation, etc...) and underestimate what they'll be paying (taxes, insurance, landscaping, closing costs, repairs, painting and cleaning between tenants, capital repairs (roof, HVAC, appliances, etc...))

As for management companies, I don't use one. But my cheapest unit is $1800/mo. Most of my tenants are techies and professionals. If I had to deal with low-rent tenants, I might consider it just so I don't have to deal with the slack-jawed yokels.

I cant count how many times ive seen people here claim that if the rent is 1000 and the mortgage is 300, you'll make atleast 600 if not 650 a month profit. Easy.

Supposedly theyve done it for years.

We budget about 10% for taxes, 10% for insurance, 15% for repairs, 5% for vacancies, leaving 60% of gross rents left for debt service, then whatever is left is profit.

Starting to own enough to feel comfortable with not changing the #s much at all going forward.

Quoted:
Thanks for the input.

My next question is:
Will we have a hard time finding someone who will give us a loan on a rental?
There are a ton of 25k-40k properties that people snatch up and rent for 350-500 per month.

We can put 20% down, but would take years before we can pay cash and I'd like to get into the game sooner rather than later.

Depends on your W2 income. I buy mostly $40k or less properties and have hard a hard-ish time getting funding because rentals are the only thing I do. I know quite a few with W2 income sources and they don't have an issue at all.

Posted: 8/23/2016 12:02:13 AM EDT

[#14]

Quote History

Quoted:
Depends on your W2 income. I buy mostly $40k or less properties and have hard a hard-ish time getting funding because rentals are the only thing I do. I know quite a few with W2 income sources and they don't have an issue at all.

View Quote

if you have paid off properties, you can leverage your equity to get home equity lines of credit. most banks and credit unions will only loan on your homestead but you can find banks to loan on investment properties.

my last application asked for a schedule of properties including rental income, mortgage payment, hoa, insurance, taxes...

if you can show positive cash flow on your 1040, it'll go a long way. the bank couldn't value my properties outside what i paid until i could show a years worth of rental history. prior to a year, they would only loan on what i paid for it.

Posted: 8/23/2016 6:46:30 PM EDT

[#15]

Quote History

Quoted:

We budget about 10% for taxes, 10% for insurance, 15% for repairs, 5% for vacancies, leaving 60% of gross rents left for debt service, then whatever is left is profit.

Starting to own enough to feel comfortable with not changing the #s much at all going forward.

Depends on your W2 income. I buy mostly $40k or less properties and have hard a hard-ish time getting funding because rentals are the only thing I do. I know quite a few with W2 income sources and they don't have an issue at all.

View Quote View All Quotes

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Quote History

Quoted:

Quoted:
Learn how to really analyze rental deals. Most newbies vastly overestimate what they'll take in (assuming 100% occupancy, optimistic appreciation speculation, etc...) and underestimate what they'll be paying (taxes, insurance, landscaping, closing costs, repairs, painting and cleaning between tenants, capital repairs (roof, HVAC, appliances, etc...))

As for management companies, I don't use one. But my cheapest unit is $1800/mo. Most of my tenants are techies and professionals. If I had to deal with low-rent tenants, I might consider it just so I don't have to deal with the slack-jawed yokels.

I cant count how many times ive seen people here claim that if the rent is 1000 and the mortgage is 300, you'll make atleast 600 if not 650 a month profit. Easy.

Supposedly theyve done it for years.

We budget about 10% for taxes, 10% for insurance, 15% for repairs, 5% for vacancies, leaving 60% of gross rents left for debt service, then whatever is left is profit.

Starting to own enough to feel comfortable with not changing the #s much at all going forward.

Quoted:
Thanks for the input.

My next question is:
Will we have a hard time finding someone who will give us a loan on a rental?
There are a ton of 25k-40k properties that people snatch up and rent for 350-500 per month.

We can put 20% down, but would take years before we can pay cash and I'd like to get into the game sooner rather than later.

Depends on your W2 income. I buy mostly $40k or less properties and have hard a hard-ish time getting funding because rentals are the only thing I do. I know quite a few with W2 income sources and they don't have an issue at all.

Thats the same as my numbers, except take 10 percent from the mortgage and add it to maintenance but that maintenance category includes long term capital expenditures like a new roof or hvac system.

Posted: 8/24/2016 7:42:21 PM EDT

[#16]

I really appreciate all the input, gentlemen.

We just sat down with one of the property managers in town:
For properties under $100K, she charges a flat $75/month, and she handles everything. (we are looking at starting with one of the myriad $30k-$40K houses for sale in our town)

The more we consider this, the more I like the idea of using this as a vehicle for investment diversification.
Obviously, with the properties we are considering, it wont be enough "income" to make much of a difference.
I like the idea of being able to hold property for 40 years, then sell 'em when we want to retire.

Posted: 9/3/2016 6:35:17 PM EDT

[#17]

Quote History

Quoted:

if you have paid off properties, you can leverage your equity to get home equity lines of credit. most banks and credit unions will only loan on your homestead but you can find banks to loan on investment properties.

my last application asked for a schedule of properties including rental income, mortgage payment, hoa, insurance, taxes...

if you can show positive cash flow on your 1040, it'll go a long way. the bank couldn't value my properties outside what i paid until i could show a years worth of rental history. prior to a year, they would only loan on what i paid for it.

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Quote History

Quoted:

Quoted:
Depends on your W2 income. I buy mostly $40k or less properties and have hard a hard-ish time getting funding because rentals are the only thing I do. I know quite a few with W2 income sources and they don't have an issue at all.

if you have paid off properties, you can leverage your equity to get home equity lines of credit. most banks and credit unions will only loan on your homestead but you can find banks to loan on investment properties.

my last application asked for a schedule of properties including rental income, mortgage payment, hoa, insurance, taxes...

if you can show positive cash flow on your 1040, it'll go a long way. the bank couldn't value my properties outside what i paid until i could show a years worth of rental history. prior to a year, they would only loan on what i paid for it.

We showed a pretty solid profit on our 1040 for 2015, even after depreciation. The bank still took out money for 'living expenses' , and also counted 100% of expenses from a rental my brother and i own jointly, while not taking into account any income off it.

Posted: 9/3/2016 6:54:42 PM EDT

[#18]

Quote History

Quoted:

We showed a pretty solid profit on our 1040 for 2015, even after depreciation. The bank still took out money for 'living expenses' , and also counted 100% of expenses from a rental my brother and i own jointly, while not taking into account any income off it.

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Quoted:

Quoted:
Depends on your W2 income. I buy mostly $40k or less properties and have hard a hard-ish time getting funding because rentals are the only thing I do. I know quite a few with W2 income sources and they don't have an issue at all.

if you have paid off properties, you can leverage your equity to get home equity lines of credit. most banks and credit unions will only loan on your homestead but you can find banks to loan on investment properties.

my last application asked for a schedule of properties including rental income, mortgage payment, hoa, insurance, taxes...

if you can show positive cash flow on your 1040, it'll go a long way. the bank couldn't value my properties outside what i paid until i could show a years worth of rental history. prior to a year, they would only loan on what i paid for it.

We showed a pretty solid profit on our 1040 for 2015, even after depreciation. The bank still took out money for 'living expenses' , and also counted 100% of expenses from a rental my brother and i own jointly, while not taking into account any income off it.

sounds like you need a new bank.

Posted: 9/3/2016 8:03:04 PM EDT

[#19]

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Quoted:

sounds like you need a new bank.

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Quoted:

Quoted:
Depends on your W2 income. I buy mostly $40k or less properties and have hard a hard-ish time getting funding because rentals are the only thing I do. I know quite a few with W2 income sources and they don't have an issue at all.

if you have paid off properties, you can leverage your equity to get home equity lines of credit. most banks and credit unions will only loan on your homestead but you can find banks to loan on investment properties.

my last application asked for a schedule of properties including rental income, mortgage payment, hoa, insurance, taxes...

if you can show positive cash flow on your 1040, it'll go a long way. the bank couldn't value my properties outside what i paid until i could show a years worth of rental history. prior to a year, they would only loan on what i paid for it.

We showed a pretty solid profit on our 1040 for 2015, even after depreciation. The bank still took out money for 'living expenses' , and also counted 100% of expenses from a rental my brother and i own jointly, while not taking into account any income off it.

sounds like you need a new bank.

This.

Its pretty obvious they either are trying to cut back on how much money is out on the street or they specifically dont want your business.

Or you are dealing with a flunky. The flunky loan officers make peanuts at most banks and arent of any particular skill or value. That's why they are flunkies.

Ive had banks do stupid shit like that and i call my friends and they said the same thing. Ive had the same bank lend me operating money without even having me sign paperwork until months later bc they want to get money on the street asap.

Posted: 9/3/2016 8:25:55 PM EDT

[#20]

Quote History

Quoted:
Thanks for the input.

My next question is:
Will we have a hard time finding someone who will give us a loan on a rental?
There are a ton of 25k-40k properties that people snatch up and rent for 350-500 per month.

We can put 20% down, but would take years before we can pay cash and I'd like to get into the game sooner rather than later.

View Quote

Visio capital does no question asked loans if you put 25% down and it appraises. Ill think there is a 50k minimum.

I have 4'rental units that I have a Property manager take care of. Cost 10%.

Posted: 9/3/2016 8:29:41 PM EDT

[#21]

My property manager is amazing. I've known several and know we kicked out with her. We pay 10% of the rent to her and I don't have to deal with the shitty tenants. Worth every penny.

Our long term goal is to have quite a few both commercial and residential property rentals. She will remain the property manager until her check is so large that I find it worth it to deal with tenants. I don't see this happening for a while.

As others have said. I am called for all the repairs. I'm a general contractor so I have that going for me. But she hasn't called with anything that wasn't up to snuff.

Posted: 9/3/2016 8:48:47 PM EDT

[#22]

Quote History

Quoted:
My property manager is amazing. I've known several and know we kicked out with her. We pay 10% of the rent to her and I don't have to deal with the shitty tenants. Worth every penny.

Our long term goal is to have quite a few both commercial and residential property rentals. She will remain the property manager until her check is so large that I find it worth it to deal with tenants. I don't see this happening for a while.

As others have said. I am called for all the repairs. I'm a general contractor so I have that going for me. But she hasn't called with anything that wasn't up to snuff.

View Quote

if you're already being called for all the repairs which is what most folks don't want, is the 10% you're paying them just to collect rent and screen tenants?

i know folks that don't want to be bothered at all so they allow the property management company to fix things under $250 without calling them and to call if the repairs are going to be more than that.

Posted: 9/3/2016 9:42:04 PM EDT

[#23]

Quote History

Quoted:

if you're already being called for all the repairs which is what most folks don't want, is the 10% you're paying them just to collect rent and screen tenants?

i know folks that don't want to be bothered at all so they allow the property management company to fix things under $250 without calling them and to call if the repairs are going to be more than that.

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Quote History

Quoted:

Quoted:
My property manager is amazing. I've known several and know we kicked out with her. We pay 10% of the rent to her and I don't have to deal with the shitty tenants. Worth every penny.

Our long term goal is to have quite a few both commercial and residential property rentals. She will remain the property manager until her check is so large that I find it worth it to deal with tenants. I don't see this happening for a while.

As others have said. I am called for all the repairs. I'm a general contractor so I have that going for me. But she hasn't called with anything that wasn't up to snuff.

if you're already being called for all the repairs which is what most folks don't want, is the 10% you're paying them just to collect rent and screen tenants?

i know folks that don't want to be bothered at all so they allow the property management company to fix things under $250 without calling them and to call if the repairs are going to be more than that.

I can't speak for him but for me, all of the calls go through our company like a regular call out so it just makes sense. Why would I ask them to call my competition and pay obscene markup for parts when my company can do it for near cost on parts?

I let mine fix small things, any big stuff (major plumbing, electrical, hvac, structural) has to be done using the company I work for as a day job. $250 is a good ballpark, their guys can do that stuff cheaper than mine, fix a door lock or whatever. It still requires management though. If you let a lot of that stuff slip though they will start billing you for random little shit all the time. Any human you deal with in life requires management. I have some friends that pay for little 40 and 70 dollar repairs constantly, shit never stops. Because they let it happen.

It's a catch 22. I get calls every hour for repairs (my customers). I sure as hell don't want to take those calls but until I get my rentals paid off, I have to take those calls to be able to buy food.

One day I plan to never field a service call again.

Posted: 9/3/2016 9:48:16 PM EDT

[#24]

Quote History

Quoted:

Visio capital does no question asked loans if you put 25% down and it appraises. Ill think there is a 50k minimum.

I have 4'rental units that I have a Property manager take care of. Cost 10%.

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Quoted:

Quoted:
Thanks for the input.

My next question is:
Will we have a hard time finding someone who will give us a loan on a rental?
There are a ton of 25k-40k properties that people snatch up and rent for 350-500 per month.

We can put 20% down, but would take years before we can pay cash and I'd like to get into the game sooner rather than later.

Visio capital does no question asked loans if you put 25% down and it appraises. Ill think there is a 50k minimum.

I have 4'rental units that I have a Property manager take care of. Cost 10%.

Do they require the properties be in a single-purpose LLC to hold the properties for quick foreclosure?

Posted: 9/3/2016 9:54:32 PM EDT

[#25]

Quote History

Quoted:

Do they require the properties be in a single-purpose LLC to hold the properties for quick foreclosure?

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Quoted:

Quoted:
Thanks for the input.

My next question is:
Will we have a hard time finding someone who will give us a loan on a rental?
There are a ton of 25k-40k properties that people snatch up and rent for 350-500 per month.

We can put 20% down, but would take years before we can pay cash and I'd like to get into the game sooner rather than later.

Visio capital does no question asked loans if you put 25% down and it appraises. Ill think there is a 50k minimum.

I have 4'rental units that I have a Property manager take care of. Cost 10%.

Do they require the properties be in a single-purpose LLC to hold the properties for quick foreclosure?

Im not sure here is there site

http://www.visiolending.com/

Posted: 9/3/2016 10:08:00 PM EDT

[#26]

Quote History

Quoted:

I can't speak for him but for me, all of the calls go through our company like a regular call out so it just makes sense. Why would I ask them to call my competition and pay obscene markup for parts when my company can do it for near cost on parts?

I let mine fix small things, any big stuff (major plumbing, electrical, hvac, structural) has to be done using the company I work for as a day job. $250 is a good ballpark, their guys can do that stuff cheaper than mine, fix a door lock or whatever. It still requires management though. If you let a lot of that stuff slip though they will start billing you for random little shit all the time. Any human you deal with in life requires management. I have some friends that pay for little 40 and 70 dollar repairs constantly, shit never stops. Because they let it happen.

It's a catch 22. I get calls every hour for repairs (my customers). I sure as hell don't want to take those calls but until I get my rentals paid off, I have to take those calls to be able to buy food.

One day I plan to never field a service call again.

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Quote History

Quoted:

Quoted:
My property manager is amazing. I've known several and know we kicked out with her. We pay 10% of the rent to her and I don't have to deal with the shitty tenants. Worth every penny.

Our long term goal is to have quite a few both commercial and residential property rentals. She will remain the property manager until her check is so large that I find it worth it to deal with tenants. I don't see this happening for a while.

As others have said. I am called for all the repairs. I'm a general contractor so I have that going for me. But she hasn't called with anything that wasn't up to snuff.

if you're already being called for all the repairs which is what most folks don't want, is the 10% you're paying them just to collect rent and screen tenants?

i know folks that don't want to be bothered at all so they allow the property management company to fix things under $250 without calling them and to call if the repairs are going to be more than that.

I can't speak for him but for me, all of the calls go through our company like a regular call out so it just makes sense. Why would I ask them to call my competition and pay obscene markup for parts when my company can do it for near cost on parts?

I let mine fix small things, any big stuff (major plumbing, electrical, hvac, structural) has to be done using the company I work for as a day job. $250 is a good ballpark, their guys can do that stuff cheaper than mine, fix a door lock or whatever. It still requires management though. If you let a lot of that stuff slip though they will start billing you for random little shit all the time. Any human you deal with in life requires management. I have some friends that pay for little 40 and 70 dollar repairs constantly, shit never stops. Because they let it happen.

It's a catch 22. I get calls every hour for repairs (my customers). I sure as hell don't want to take those calls but until I get my rentals paid off, I have to take those calls to be able to buy food.

One day I plan to never field a service call again.

Sure you can. I don't want to be bothered by the tenants. Since I build stuff and fix it for a living I like to see what it is that needs to be done and make sure I'm not being fleeced. From what i've seen a lot of management companies spend your money, like its yours and not theirs. I want to prevent that, although with my current property manager this isn't an issue. Anything over $250 I'm called for. My office is close to the rentals so I get to stand by and watch them from afar.

And like fella said, she has cheaper dudes than I do to fix some of the minuscule stuff. But anything large, or structural, or potentially complicated I want to inspect and possibly fix depending on what it is.

Also she does my quarterly's and a bunch of other paperwork I don't have the time or the want to do. To me its a hell of a deal, if we ever hit the point where using her is a pain I will reconsider, but I don't forsee that happening for a while.

ETA: also opwhen I get to check on repairs I get to see my investment without the tenant knowing I'm the owner or that I'm really looking to make sure I don't need to have them evicted. Same way we require new tenants to have the air filter replaced monthly until we know them better.

Posted: 9/4/2016 10:39:41 PM EDT

[#27]

Quote History

Quoted:

We budget about 10% for taxes, 10% for insurance, 15% for repairs, 5% for vacancies, leaving 60% of gross rents left for debt service, then whatever is left is profit.

Starting to own enough to feel comfortable with not changing the #s much at all going forward.

Depends on your W2 income. I buy mostly $40k or less properties and have hard a hard-ish time getting funding because rentals are the only thing I do. I know quite a few with W2 income sources and they don't have an issue at all.

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Quoted:

Quoted:
Learn how to really analyze rental deals. Most newbies vastly overestimate what they'll take in (assuming 100% occupancy, optimistic appreciation speculation, etc...) and underestimate what they'll be paying (taxes, insurance, landscaping, closing costs, repairs, painting and cleaning between tenants, capital repairs (roof, HVAC, appliances, etc...))

As for management companies, I don't use one. But my cheapest unit is $1800/mo. Most of my tenants are techies and professionals. If I had to deal with low-rent tenants, I might consider it just so I don't have to deal with the slack-jawed yokels.

I cant count how many times ive seen people here claim that if the rent is 1000 and the mortgage is 300, you'll make atleast 600 if not 650 a month profit. Easy.

Supposedly theyve done it for years.

We budget about 10% for taxes, 10% for insurance, 15% for repairs, 5% for vacancies, leaving 60% of gross rents left for debt service, then whatever is left is profit.

Starting to own enough to feel comfortable with not changing the #s much at all going forward.

Quoted:
Thanks for the input.

My next question is:
Will we have a hard time finding someone who will give us a loan on a rental?
There are a ton of 25k-40k properties that people snatch up and rent for 350-500 per month.

We can put 20% down, but would take years before we can pay cash and I'd like to get into the game sooner rather than later.

Depends on your W2 income. I buy mostly $40k or less properties and have hard a hard-ish time getting funding because rentals are the only thing I do. I know quite a few with W2 income sources and they don't have an issue at all.

Do you use 10% of rent for taxes or 10% of yearly income?

Posted: 9/4/2016 10:46:07 PM EDT

[#28]

I've been looking at a property that's is about 70k.
after 20% down that's 55.8K @ ~4.5%
850 - rent
85 - 10% vacancy
85 - 10% repairs
85 - 10% Income Tax
58 - 1% property tax
90 - Insurance
282 - Mortgage
0 - Management Fee

Monthly Cash Flow = ~164$ for 14k down. That's a YOC of 14%

Am I missing something here?

Posted: 9/4/2016 11:06:11 PM EDT

[#29]

Quote History

Quoted:

Do you use 10% of rent for taxes or 10% of yearly income?

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Quote History

Quoted:

Quoted:
Learn how to really analyze rental deals. Most newbies vastly overestimate what they'll take in (assuming 100% occupancy, optimistic appreciation speculation, etc...) and underestimate what they'll be paying (taxes, insurance, landscaping, closing costs, repairs, painting and cleaning between tenants, capital repairs (roof, HVAC, appliances, etc...))

As for management companies, I don't use one. But my cheapest unit is $1800/mo. Most of my tenants are techies and professionals. If I had to deal with low-rent tenants, I might consider it just so I don't have to deal with the slack-jawed yokels.

I cant count how many times ive seen people here claim that if the rent is 1000 and the mortgage is 300, you'll make atleast 600 if not 650 a month profit. Easy.

Supposedly theyve done it for years.

We budget about 10% for taxes, 10% for insurance, 15% for repairs, 5% for vacancies, leaving 60% of gross rents left for debt service, then whatever is left is profit.

Starting to own enough to feel comfortable with not changing the #s much at all going forward.

Quoted:
Thanks for the input.

My next question is:
Will we have a hard time finding someone who will give us a loan on a rental?
There are a ton of 25k-40k properties that people snatch up and rent for 350-500 per month.

We can put 20% down, but would take years before we can pay cash and I'd like to get into the game sooner rather than later.

Depends on your W2 income. I buy mostly $40k or less properties and have hard a hard-ish time getting funding because rentals are the only thing I do. I know quite a few with W2 income sources and they don't have an issue at all.

Do you use 10% of rent for taxes or 10% of yearly income?

10% of overall yearly income for taxes. Between taxes, insurance, vacancy, repairs and the like we initially budgeted 40% of gross income, with leftovers for debt service and profit. Overall it isn't bad at all, some run 30% , some run 35%, so the 40% figure helps us save a little back for rainy days.

Posted: 9/4/2016 11:07:34 PM EDT

[#30]

Quote History

Quoted:
I've been looking at a property that's is about 70k.
after 20% down that's 55.8K @ ~4.5%
850 - rent
85 - 10% vacancy
85 - 10% repairs
85 - 10% Income Tax
58 - 1% property tax
90 - Insurance
282 - Mortgage
0 - Management Fee

Monthly Cash Flow = ~164$ for 14k down. That's a YOC of 14%

Am I missing something here?

View Quote

Are you really taxed on gross income in AZ? Federal rentals are very, very tax advantages because you take total acquisition costs split over 27 years which allows you to recoup something like 3.7%/yr in tax deductions due to the depreciation.

Posted: 9/4/2016 11:19:49 PM EDT

[#31]

I used Century 21 for years.

10% of the rent, repairs under three hundred were deducted from rent, anything over three I was contacted.

Once upon a time we managed our own properties.

Middle of the night calls got old.

Posted: 9/4/2016 11:23:33 PM EDT

[#32]

Quote History

Quoted:

Are you really taxed on gross income in AZ? Federal rentals are very, very tax advantages because you take total acquisition costs split over 27 years which allows you to recoup something like 3.7%/yr in tax deductions due to the depreciation.

View Quote View All Quotes

View All Quotes

Quote History

Quoted:

Quoted:
I've been looking at a property that's is about 70k.
after 20% down that's 55.8K @ ~4.5%
850 - rent
85 - 10% vacancy
85 - 10% repairs
85 - 10% Income Tax
58 - 1% property tax
90 - Insurance
282 - Mortgage
0 - Management Fee

Monthly Cash Flow = ~164$ for 14k down. That's a YOC of 14%

Am I missing something here?

Are you really taxed on gross income in AZ? Federal rentals are very, very tax advantages because you take total acquisition costs split over 27 years which allows you to recoup something like 3.7%/yr in tax deductions due to the depreciation.

I used 10% of cash flow for income tax. However, if I use 10% of yearly income it comes down to ~27$ and bumps my monthly income up to ~$215.

As far as state income tax in Az, im not sure how it works on rentals. Im just starting to do my research.

Posted: 9/5/2016 2:07:35 AM EDT

[#33]

Quote History

Quoted:

I used 10% of cash flow for income tax. However, if I use 10% of yearly income it comes down to ~27$ and bumps my monthly income up to ~$215.

As far as state income tax in Az, im not sure how it works on rentals. Im just starting to do my research.

View Quote View All Quotes

View All Quotes

Quote History

Quoted:

Quoted:
I've been looking at a property that's is about 70k.
after 20% down that's 55.8K @ ~4.5%
850 - rent
85 - 10% vacancy
85 - 10% repairs
85 - 10% Income Tax
58 - 1% property tax
90 - Insurance
282 - Mortgage
0 - Management Fee

Monthly Cash Flow = ~164$ for 14k down. That's a YOC of 14%

Am I missing something here?

Are you really taxed on gross income in AZ? Federal rentals are very, very tax advantages because you take total acquisition costs split over 27 years which allows you to recoup something like 3.7%/yr in tax deductions due to the depreciation.

I used 10% of cash flow for income tax. However, if I use 10% of yearly income it comes down to ~27$ and bumps my monthly income up to ~$215.

As far as state income tax in Az, im not sure how it works on rentals. Im just starting to do my research.

My calculations worked out similarly to yours- albeit about half the size of everything.

The property manager we spoke with did mention the favorable tax treatment, but I haven't done any further research.

Posted: 9/7/2016 3:01:13 AM EDT

[#34]

Where are you findinf this 40K properties???

Posted: 9/7/2016 4:25:38 PM EDT

[#35]

Quote History

Quoted:
Where are you findinf this 40K properties???

View Quote

http://www.zillow.com/homes/for_sale/Casa-Grande-AZ/house_type/10727_rid/50000-75000_price/174-261_mp/globalrelevanceex_sort/33.088378,-111.491661,32.618268,-111.931114_rect/10_zm/0_mmm/

Posted: 9/7/2016 5:24:24 PM EDT

[#36]

Quote History

Quoted:

http://www.zillow.com/homes/for_sale/Casa-Grande-AZ/house_type/10727_rid/50000-75000_price/174-261_mp/globalrelevanceex_sort/33.088378,-111.491661,32.618268,-111.931114_rect/10_zm/0_mmm/

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Quoted:

Quoted:
Where are you findinf this 40K properties???

http://www.zillow.com/homes/for_sale/Casa-Grande-AZ/house_type/10727_rid/50000-75000_price/174-261_mp/globalrelevanceex_sort/33.088378,-111.491661,32.618268,-111.931114_rect/10_zm/0_mmm/

Wow I think Arizona is going to be my new home.

Posted: 9/8/2016 3:47:18 PM EDT

[#37]

Quote History

Quoted:

Wow I think Arizona is going to be my new home.

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Quoted:

Quoted:
Where are you findinf this 40K properties???

http://www.zillow.com/homes/for_sale/Casa-Grande-AZ/house_type/10727_rid/50000-75000_price/174-261_mp/globalrelevanceex_sort/33.088378,-111.491661,32.618268,-111.931114_rect/10_zm/0_mmm/

Wow I think Arizona is going to be my new home.

That area is kind of far away from everything, but urban sprawl is happening. But..... There will most likely be no urban sprawl north to connect it and the next city because there is Indian Reservation in the way.

Posted: 9/11/2016 10:22:20 PM EDT

[#38]

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Quoted:
Where are you findinf this 40K properties???

View Quote

There's a dozen within 5 miles of me.
There's always several. They usually are in rough shape- but there are always a couple diamonds in the rough.

Housing isn't great in my area so there are tons of of people who will rent these types of houses.

It's a goldmine and I'd like to be involved.

Posted: 9/30/2016 12:03:20 AM EDT

[#39]

Quote History

Quoted:

Wow I think Arizona is going to be my new home.

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Quoted:

Quoted:
Where are you findinf this 40K properties???

http://www.zillow.com/homes/for_sale/Casa-Grande-AZ/house_type/10727_rid/50000-75000_price/174-261_mp/globalrelevanceex_sort/33.088378,-111.491661,32.618268,-111.931114_rect/10_zm/0_mmm/

Wow I think Arizona is going to be my new home.

I've managed to get 30+ rentals at $40k or less, that's most of what I buy.

It's more of a 'business' than investment. There's extra management concerns, but you can still make plenty of money renting out a $30,000 house for $600-$700 a month.

[ARCHIVED THREAD] - Residential rental property managers- anybody use one?

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