Speaker 1: Welcome to How the Money. I'm Joel and I am Matt.
Speaker 1: Today we're discussing managing rental properties effectively. That's right, Joel,
Speaker 1: we're going to talk about rental properties. I've got maybe
Speaker 1: about seven years worth of experience. Now you've been managing
Speaker 1: your properties for about that same length of time, right,
Speaker 1: I think it's almost nine years at this point. Yeah,
Speaker 1: we've learned a couple extra years on me, sometimes learned
Speaker 1: the hard way managing rental properties. But yeah, there's a
Speaker 1: lot to share because I think that is one of
Speaker 1: the reasons people avoid getting into rental properties is the
Speaker 1: managing game. They're like, oh, it's gonna be it's gonna
Speaker 1: be a big pain and tenant nightmare, tenant horror stories.
Speaker 1: Those are the kind of things that make people say
Speaker 1: that that's not for me. And so I think that
Speaker 1: being able to manage a property effectively is so key.
Speaker 1: It's so clutch to making it actually not a breeze necessarily,
Speaker 1: but very very manageable, very very much more yeah, much
Speaker 1: more approachable and a lot easier than people think it is.
Speaker 1: And our goal is that with this episode, a lot
Speaker 1: of individuals might consider real estate and even managing it
Speaker 1: themselves based on what we have to say today. So
Speaker 1: on that real estate and housing kind of conversation, let's
Speaker 1: talk about neighbor dot com. Oh yeah, so this recently.
Speaker 1: I don't know where it's been hiding or how I
Speaker 1: haven't seen it before, but it's this really interesting website
Speaker 1: where people can rent out a space in their home
Speaker 1: or like a driveway or a garage or a shed anything. Um,
Speaker 1: you can rent out just a portion of your home
Speaker 1: for storage, not like Airbnb for someone to come and
Speaker 1: like sleep there, but for someone to store their possessions
Speaker 1: or a car or something like that. Right. Yeah, well
Speaker 1: you said Airbnb. It really is like Airbnb, except for
Speaker 1: for self storage, not for individuals looking for a little
Speaker 1: getaway for the weekend. Right. Yeah, you don't want to
Speaker 1: stay in my shed for the weekend, but you might
Speaker 1: want to pack your stuff there. It just depends on
Speaker 1: how nice your shed is. Man. I had a nice
Speaker 1: shed after college when I was living up in North Carolina,
Speaker 1: when I was living in the woods chopping my own
Speaker 1: wood for heat, We had this little shed and we
Speaker 1: got a couple of couches from the local good Will
Speaker 1: put them in there, and we would sit out there
Speaker 1: and smoke our pipes and cigars. It was a very
Speaker 1: rustic and of the earth period of time for me.
Speaker 1: I feel like when I saw this about neighbor dot com,
Speaker 1: I was like a man for for our our audience.
Speaker 1: There's like a twofold potential benefit. One is if you
Speaker 1: have an extra room or spacing your attic or spacing
Speaker 1: your shed whatever whatever that may be, or like your
Speaker 1: basement or your driveway. Yeah, like I saw that you
Speaker 1: could just run out space on your driveway. So if
Speaker 1: you have an extra large driveway where and maybe you've
Speaker 1: downsized cars recently, somebody can pay you to park their
Speaker 1: own car in your drive or something, yeah, which is crazy. Yeah.
Speaker 1: So so like there's that potential to make some money
Speaker 1: off of extra space you have hanging out in your life. Um,
Speaker 1: and then also there's the potential for storing own stuff
Speaker 1: in a much cheaper way than then you would be
Speaker 1: able to with like a self storage unit, by going
Speaker 1: directly to to a neighbor, to someone around the corner
Speaker 1: and using their space for for a fraction of the price.
Speaker 1: So yeah, it could be a win win either way
Speaker 1: you're looking at it. Yeah, this is another one of
Speaker 1: those kind of fun gig economy ways that you can
Speaker 1: make money. I mean, that's the end of it. That
Speaker 1: I like is the the idea of individuals out there thinking, Okay,
Speaker 1: what spaces can I right out? Like you can also
Speaker 1: list a unpaved lot, which is basically like your backyard.
Speaker 1: So I'm like, man, folks are going to get on
Speaker 1: there and think through, like what am I not using?
Speaker 1: What do I already have? You know, folks have resources
Speaker 1: that they have at their disposal that aren't necessarily making money.
Speaker 1: And that's one of the cool things about all these
Speaker 1: apps and technologies is that they're able to shut down
Speaker 1: these inefficiencies that exist. Why not use these resources that
Speaker 1: you have and put them to work. I love that. Yeah,
Speaker 1: you can make an extra fifty two hundred bucks a
Speaker 1: month by running out something that you're you're not even
Speaker 1: really using. So obviously on the on the home page,
Speaker 1: there's like a lady and she's like, I make over
Speaker 1: ten thousand dollars every single year. Maybe in her case,
Speaker 1: she has like acres of parking lot. Maybe we're folks
Speaker 1: gonna just rent that out from her forty two atticts
Speaker 1: like a right, lady, good job. Yeah, So that's You're
Speaker 1: probably not gonna get that rich doing it, but it
Speaker 1: is a potential way to make some extra extra money. Yeah,
Speaker 1: super cool, and we will link to that in our
Speaker 1: show notes for folks who are interested. All right, Matt,
Speaker 1: let's get to the beer we're having on this episode.
Speaker 1: We're drinking today, we're drinking beer called pog Basement i
Speaker 1: p A by scoff Law Brewing. They're just around the
Speaker 1: corner from us in Atlanta. I love the name. I've
Speaker 1: always loved that name, Scofflaw. They don't care exactly about anything.
Speaker 1: They're gonna do whatever it is that they want to do,
Speaker 1: including brewing a delicious I PA like this. So yeah,
Speaker 1: looking forward to having this one on the show. Yeah,
Speaker 1: it was actually super I looked at our our beer
Speaker 1: backlog and all surprised to see we've never had a
Speaker 1: scoff Law beer on the show. So it's time. It's
Speaker 1: it is time. We're overdue, man. Yeah, alright, So we'll
Speaker 1: give our thoughts on that one at the end of
Speaker 1: the episode, but but for now, let's get onto the
Speaker 1: topic at hand. We're talking about managing rental properties effectively.
Speaker 1: And Matt, we have talked about rental properties a decent bit.
Speaker 1: On this podcast, we've answered listener questions about buying rental properties.
Speaker 1: We've talked about how to find the right rental property,
Speaker 1: how to screen tenants, how to invest in real estate
Speaker 1: when you don't want to physically own a single family
Speaker 1: or multifamily home where you live, and more like we
Speaker 1: we've earned the gam it in a lot of ways.
Speaker 1: But what we haven't talked about, uh, is the day
Speaker 1: to day of rental property management. So we're gonna tackle
Speaker 1: that scintillating topic on today's episode. Everybody's been waiting, like
Speaker 1: with bated breath for this episode, I think. But like
Speaker 1: we said, if you are somebody who's thought they will
Speaker 1: never own rental properties because they sound like too much work,
Speaker 1: listen to this episode. There's a reasonable chance at least
Speaker 1: it will change your mind. I can't promise you that
Speaker 1: it will. But and then for other people, for current landlords,
Speaker 1: I think there are a lot of ways that you
Speaker 1: can change the way you're managing something, make it a
Speaker 1: little bit of a lighter load and a little more
Speaker 1: enjoyable at the same time. Yeah, and another reason too
Speaker 1: that we want to pull our listeners into this conversation,
Speaker 1: man is that, like you and I, we have seen
Speaker 1: the impact of smart real estate investing in our own lives,
Speaker 1: right in our own ability to have a little bit
Speaker 1: more freedom when it comes to, you know, our our
Speaker 1: day jobs and being able to earn a little bit
Speaker 1: of passive income quote unquote, passive income is not truly passive,
Speaker 1: but it's a big deal in our lives. So we
Speaker 1: want our listeners to to at least hear us talk
Speaker 1: about this a little bit because it's something that they
Speaker 1: can implement in their own lives. And managing specifically is
Speaker 1: the thing that people push back on, right it seems
Speaker 1: like something that they don't want to do. I think
Speaker 1: most people avoid rental properties in large part because they've
Speaker 1: heard tenant horror stories, and that's something that most people
Speaker 1: don't want to put up with. Right. I totally get it.
Speaker 1: I understand that aversion, but it doesn't have to be
Speaker 1: like that. There are systems that that you can put
Speaker 1: in place to make it far more likely that you'll
Speaker 1: have a positive experience with your tenants while simultaneously making
Speaker 1: money every single month and building wealth. So we'll talk
Speaker 1: about property managers, and you know, even when hiring one
Speaker 1: might make sense for you, you don't even necessarily have
Speaker 1: to manage our rental property yourself, even though that's going
Speaker 1: to be the direction that we're gonna steer folks towards. Uh.
Speaker 1: And we'll get to those reasons why later in this episode. Yeah,
Speaker 1: so before we get to kind of managing a rental property,
Speaker 1: map that there are a few things that change the
Speaker 1: dynamics of managing and rental property. And and the biggest
Speaker 1: one is getting good at finding great tenants. That's half
Speaker 1: the battle. Really, when it kept one great tenants exactly,
Speaker 1: that that's going to solve almost all of your problems. Exactly.
Speaker 1: It really, it really is huge. And you know, we
Speaker 1: we covered that a while back in episode forty four.
Speaker 1: Let's quickly discussed again, because getting stellar tenants into your
Speaker 1: property will make all the difference when it comes to
Speaker 1: managing that property. Uh. Let's talk about listings and showings.
Speaker 1: That's a huge part of whether people are or are
Speaker 1: going to respond or not. I mean, just like if
Speaker 1: you list a used item for sale on Facebook, Marketplace
Speaker 1: or Craigslist, good pictures in a decent listing go a
Speaker 1: long way towards whether people are actually going to reach
Speaker 1: out to you or not. Uh, and be interested in
Speaker 1: what you're selling and whether or not they're gonna be
Speaker 1: willing to pay full price. I recently discussed the difference
Speaker 1: between listing on Facebook Marketplace, which is free, and then
Speaker 1: listing on Zillo, which costs ten dollars a week. And
Speaker 1: I had plenty of times was like, all, I'm gonna
Speaker 1: try this the free out and and go with Facebook.
Speaker 1: But Zillo kicked its butt, Like I got zero replies
Speaker 1: from Facebook and I got like thirty replies from Zillo
Speaker 1: within a week. And so yeah, Facebook Marketplace is great
Speaker 1: for unloading a fridge for a hundred bucks, right right,
Speaker 1: Maybe not the best place to uh list rental. Yeah,
Speaker 1: so yeah, put a sign in your your yard listed everywhere,
Speaker 1: take good picks, give solid info about the property, and
Speaker 1: make it professional and friendly while selling the features of
Speaker 1: the home in the neighborhood. I think sometimes if you
Speaker 1: skip that step or you you're like, oh yeah, to
Speaker 1: one available next week, you have to like sell the
Speaker 1: neighborhood a little bit, sell the home and and let
Speaker 1: people know what a great place it is to live. Yeah,
Speaker 1: you're talking about the neighborhood. Essentially, you want to paint
Speaker 1: a picture of what it's like to live there. Uh.
Speaker 1: In both of our cases, we've had properties that we've
Speaker 1: moved out of that we then listed, and it's really
Speaker 1: easy to get behind that property right because there's reasons
Speaker 1: that you bought it in the first place. And so
Speaker 1: explaining how close it is to say, like restaurants, you know,
Speaker 1: like I mean, I've got a property nearby that's about
Speaker 1: five blocks from some really great restaurants in Atlanta. That's
Speaker 1: something that you want to include in the listing. So
Speaker 1: it takes a little bit of creativity to to help
Speaker 1: folks to understand what it's gonna be like and how
Speaker 1: wonderful it truly is gonna be to to live in
Speaker 1: a property like that. And another important step to finding
Speaker 1: a great tenant is is making sure that you properly
Speaker 1: run a background check. You want to check their credit
Speaker 1: and their criminal history. My smart move dot com or
Speaker 1: cozy dot ceo cozy co Uh, these are the websites
Speaker 1: that we think are best for screening a potential tenant,
Speaker 1: and that part of the process is crucial. You know,
Speaker 1: it's really hard to to get to know someone in
Speaker 1: five minutes when they swing by and take a look
Speaker 1: at the place and they say, hey, I want to
Speaker 1: apply for the place, right, and so make sure you
Speaker 1: can find out more about them based on their background check.
Speaker 1: And you also want to to call previous landlords and
Speaker 1: verify their their income and their employment. You know, I
Speaker 1: even call a couple of personal contacts as well. Uh,
Speaker 1: if they include those, or better yet, if they include
Speaker 1: like a little letter of recommendation maybe from the previous
Speaker 1: landlord that always tells yeah, but always call. I feel
Speaker 1: like this is an easy step that a lot of
Speaker 1: individuals can overlook because, like, you meet somebody who starts talking,
Speaker 1: even these days, even wearing a mask, it can be awkward,
Speaker 1: but you start talking to him and you think, oh, man,
Speaker 1: this is they seem so great. They're really friendly. They
Speaker 1: mentioned the company where they work. It sounds like they
Speaker 1: make enough and they qualify. However, just because they're friendly
Speaker 1: do a good job socially doesn't mean they do a
Speaker 1: good job financially, right, So you want to make sure
Speaker 1: that you thoroughly vet your applicants. Yeah, really, it doesn't
Speaker 1: take that much time, you know, running running these histories
Speaker 1: and then making four or five phone calls. Um, It's
Speaker 1: there's not a whole lot involved, and yet what it
Speaker 1: can save you from the pain on the back end
Speaker 1: of having someone who who doesn't pay rent on time
Speaker 1: or or gets months behind. Even like those are the
Speaker 1: kind of things that are gonna make you wish you
Speaker 1: never took on managing our rental property in the first place.
Speaker 1: And so we have we want to make sure you
Speaker 1: don't get into that spot. So do the easy stuff
Speaker 1: on the front end that takes a little bit of
Speaker 1: time in order to ensure that you're getting a great tenant.
Speaker 1: And also another important thing to consider is the lease agreement.
Speaker 1: Getting a thorough lease agreement is incredibly important. You can
Speaker 1: look to get one from a fellow real estate investor.
Speaker 1: That's actually what I did when I got started out.
Speaker 1: A friend across the street who had a few rental
Speaker 1: properties was like, all right, hey, you know I've been
Speaker 1: talking to you about this. Let me give you my lease.
Speaker 1: And I looked it over and it was great. But
Speaker 1: I would say for most people it makes sense to
Speaker 1: actually pay for one that you can use over and over.
Speaker 1: That works for the ways that the laws are set
Speaker 1: up in your state, because sometimes you might get a
Speaker 1: lease from a friend and you don't realize that it's
Speaker 1: missing some important components that you need to have in
Speaker 1: their bigger pockets. Sell state specific leases for nine no
Speaker 1: low allows you to make unlimited leases for thirty nine
Speaker 1: dollars a year. You can also check out other online
Speaker 1: legal sites like legal Zoom. Be wary of going for
Speaker 1: the freeforms though. You don't want to cheap out on
Speaker 1: the lease because, like I said, you want to make
Speaker 1: sure it's a state specific, thorough legal document and and
Speaker 1: that's just really important also on the front end, and
Speaker 1: it's worth that extra money in order to make sure
Speaker 1: that your your legal obligations are are taken care of. Yeah,
Speaker 1: this is definitely an instance where you'd want to be frugal,
Speaker 1: but but not cheap because it can come back to
Speaker 1: bite you. Man. This makes me think too of like,
Speaker 1: have you had any horror stories when it's come to
Speaker 1: your different properties As you're talking about Lisa's, I was
Speaker 1: kind of thinking through maybe I wasn't listening to you,
Speaker 1: and I was thinking through different instances, different occasions that
Speaker 1: have arisen, and I can honestly say, man, we've I've
Speaker 1: never really had a full on horror story where something
Speaker 1: terrible has happened at a property like where I needed
Speaker 1: to get up in the middle of the night. You know,
Speaker 1: you hear these different stories neither Yeah, really so so
Speaker 1: the worst thing I can think of, maybe as you
Speaker 1: think of something to share, but at one of our properties,
Speaker 1: we had a giant tree branch fall in. It landed
Speaker 1: on the cartlanted on the tenant's car, but like, this
Speaker 1: was a healthy tree and this was back I forget
Speaker 1: what hurricane it was, but a few years ago. It
Speaker 1: was a big hurricane in the fall. But it rocks
Speaker 1: you know, the Atlanta area and a lot of trees
Speaker 1: went down. And luckily our our tenants had comprehensive coverage.
Speaker 1: You know, it covered those acts of god, uh, you know,
Speaker 1: weather things that you can't really plan for. But you know,
Speaker 1: that was something where I was just like, oh no,
Speaker 1: what's gonna happen. But it's like, know, that's something that
Speaker 1: that their insurance completely covers and it's not something that
Speaker 1: that I need to worry about, you know. Um, but yeah,
Speaker 1: that's the closest I feel like that we came to
Speaker 1: kind of freaking out thinking. You know, when they send
Speaker 1: us that picture of the tree like smashed into their car,
Speaker 1: I was like, oh no, we're done. Or sunk. That's
Speaker 1: how your emotions can kind of get the best of
Speaker 1: you in the moment. Yeah, yeah, yeah, No, I've never
Speaker 1: When I look back over nine years of managing properties
Speaker 1: that I own and and you know, having tenants, I
Speaker 1: don't have any major horror stories. I do remember, like
Speaker 1: there's this one time where a couple wanted to get
Speaker 1: out of at lease early and I remember them, and
Speaker 1: you know, I'm typically completely willing to talk about that,
Speaker 1: and I don't want to be punitive when when someone
Speaker 1: wants to to leave and and and move somewhere else,
Speaker 1: and the way they went about it was just was
Speaker 1: just really difficult, uh. And it was a little combative,
Speaker 1: um and and that's not my personality at all, to
Speaker 1: to get combative. And so that was hard emotionally for me.
Speaker 1: And I think, um, sometimes that can be at least
Speaker 1: for my personality, and that that's like the hardest part
Speaker 1: is just like the yeah, the interpersonal side of you
Speaker 1: is really struggling in the moment. But you're totally fine,
Speaker 1: yeah exactly, legally, you're totally good. But it was the
Speaker 1: and there was a different expectation of what, uh, the
Speaker 1: laws should look like. They were international and so where
Speaker 1: they came from, UH, tenants had a whole lot more
Speaker 1: leeway to essentially break leases whenever they wanted and and
Speaker 1: here in the state that we live and that's just
Speaker 1: not the case. So they just assumed some things that
Speaker 1: weren't quite accurate. Right. Yeah, Well that's a great segue, man,
Speaker 1: because after the break, we're gonna talk about UH state
Speaker 1: specific laws and how important it is to know those
Speaker 1: as well as other steps that we need to take
Speaker 1: when it comes to managing rental properties effectively. And so
Speaker 1: we'll get to all of that right after the break.
Speaker 1: Art we're back from the break, We're talking about managing
Speaker 1: rental properties, and there is a whole lot that goes
Speaker 1: into managing a rental property. Well, sometimes you gotta like
Speaker 1: step up your emotional fortitude game, like I had to
Speaker 1: back in the day, and I just had to like,
Speaker 1: all right, no, I'm sticking to my guns, and and
Speaker 1: you know, I'm I'm I'm not going to be rude
Speaker 1: or unkind, but I'm gonna have to be okay with
Speaker 1: these people being mad at me, not liking me. And
Speaker 1: that was hard, man, that was hard. I don't like him,
Speaker 1: people don't like me. But another really important thing though,
Speaker 1: when you're listening your property and you're talking to tenants
Speaker 1: is that you need to make sure you're in compliance
Speaker 1: with the law. So let's talk about that. In particular,
Speaker 1: you need to make sure you're obeying the Fair Housing
Speaker 1: Administrations rules. Don't ask questions that will get you into
Speaker 1: potential legal trouble. Specifically, under the Act, landlords cannot discriminate
Speaker 1: against tenants or potential tenants on the basis of race, gender, religion,
Speaker 1: familial status, disability, or ethnicity. So no, this you've got
Speaker 1: to obey the law, and violating these rules could could
Speaker 1: get too in big, big trouble. Yeah, not only do
Speaker 1: you not want to ask those questions when maybe either
Speaker 1: ahead of time when you're kind of communicating with them,
Speaker 1: but where you've met with them, or or even after
Speaker 1: you've met them, right, but you want to not uh
Speaker 1: listen any of those protected classes in the listing for
Speaker 1: the property. Right can't be like nobody is allowed. Yeah, yeah, well,
Speaker 1: in particular familiar status. I feel like that's one of
Speaker 1: the more honest ones, one of the more honest mistakes
Speaker 1: that we can make, because it's not good if you
Speaker 1: put in your listing this is a property that's great
Speaker 1: for families, or this property is is perfect for you know,
Speaker 1: a single professional, like that kind of thing. You have
Speaker 1: to stay away from family status because that's that's a
Speaker 1: protected class. Things like race and religion or are obvious, right,
Speaker 1: Like you're not gonna say, hey, this is a great
Speaker 1: property for a Roman Catholic or the or this is
Speaker 1: a great Muslim neighborhood, Like no, you can't, that's obvious.
Speaker 1: You can't do those sort of things. But you gotta
Speaker 1: watch out too when it comes to you know, what
Speaker 1: you know. Earlier we talked about painting a picture for
Speaker 1: what it might look like for someone to live in
Speaker 1: your house. But you do want to make sure you
Speaker 1: avoid language that that makes it seem like you're trying
Speaker 1: to steer the listing towards or away from one of
Speaker 1: those protected classes. For sure. Yeah, yeah, totally. And so Matt.
Speaker 1: On the note of knowing your state's laws and rules,
Speaker 1: I mean, they're they're obviously federal rules too, all right,
Speaker 1: it's important to familiarize yourself with the nuances of your
Speaker 1: state's landlord tenant laws. There are all sorts of little
Speaker 1: things that can trip you up, but it really depends
Speaker 1: on what state you live in, so you know whichever
Speaker 1: of the fifty states you live in. It's going to determine, um,
Speaker 1: some of the ways that you handle that rental property.
Speaker 1: And there are third party sites like landlord ology dot com.
Speaker 1: Will put a link to that in our show notes,
Speaker 1: but they've got comprehensive guides for every state that can
Speaker 1: be really helpful so that you can know the laws
Speaker 1: and some of the specifics that need to be in
Speaker 1: your lease and some of the specific things that you
Speaker 1: need to communicate to tenants. And at the same time,
Speaker 1: a lot of states have put together a landlord Tenant handbook,
Speaker 1: like our state of Georgia has a great one, is
Speaker 1: like eighty pages long or something like that. I've read
Speaker 1: the whole thing because there's just so much you need
Speaker 1: to know as you're getting up to speed, um, and
Speaker 1: then I like go back to it as like some
Speaker 1: light toilet reading write exactly, Yeah, just to brush up
Speaker 1: every once in a while, like pull it up up
Speaker 1: and while I'm going number two Chicken Suit for the
Speaker 1: Soul and Georgia Landlordian Book exactly. They're both just true
Speaker 1: joys to read. But yeah, I mean they're really that
Speaker 1: that's something that you do need to bone up on,
Speaker 1: and it's something that's important to read because it is
Speaker 1: going to help you be a good landlord. You're gonna
Speaker 1: know some of the rules that you have to abide by, um,
Speaker 1: and you want to make sure you're doing everything by
Speaker 1: the letter of the law. In addition to to your
Speaker 1: own standards of wanting to manage and run a great
Speaker 1: rental property, you want to also make sure you're in
Speaker 1: compliance with the law to right. Yeah, so that's those
Speaker 1: are the kind of like the first steps for managing well, right,
Speaker 1: making sure that you're in compliance with the law of
Speaker 1: whether it be federal or state. Let's kind of dive
Speaker 1: into what it looks like, you know, more on the
Speaker 1: day to day basis and and do like the best
Speaker 1: thing that I feel like that we can say when
Speaker 1: it comes to managing well is just to treat managing
Speaker 1: these properties or you know, your property like a business,
Speaker 1: you know, not a hobby. You definitely want to make
Speaker 1: sure that you're you're being professional. That doesn't mean you
Speaker 1: have to wear a suit and tie. You know, you
Speaker 1: don't have to dress up or anything but tuxedo personally,
Speaker 1: but if you did that, it probably weird people out
Speaker 1: what is going on. But I think there are certain
Speaker 1: expectations that tenants do want to see, you know, like
Speaker 1: communicating clearly and effectively, and so make sure that you
Speaker 1: are doing those kind of things. And one of the
Speaker 1: other things that's important as well as having like a
Speaker 1: schedule of maintenance for the house, right we feel it's
Speaker 1: important for you personally to check in on that property
Speaker 1: at least once every single quarter. You know. Uh, this
Speaker 1: is why, like early on, why insisted on mowing my
Speaker 1: own lawns my rental properties. Uh, it was just a
Speaker 1: default way for me to have eyes on what was
Speaker 1: going on there. Obviously I was cutting the grass more
Speaker 1: than once a quarter. But uh, you know, this is
Speaker 1: why having some of these properties close by is also
Speaker 1: really helpful. Those you know, part of my strategy, as
Speaker 1: part of your strategy as well, Jill. I know it's
Speaker 1: not out of my way, you know to drive by
Speaker 1: and see how things are looking. But either way, you know,
Speaker 1: have at least four days a year that you schedule
Speaker 1: for you know, maintenance, you know, filter changes, checking out
Speaker 1: the interior, things like that. And on that note too,
Speaker 1: it's good to maybe compile a list of contractors professional
Speaker 1: contractors right who can do some work for you when
Speaker 1: there there's a need that comes up that's something maybe
Speaker 1: beyond you know, tightening a little pipe under the sink
Speaker 1: or changing a light bulb, like things that I can do.
Speaker 1: Uh So having that list even before you need it
Speaker 1: is so helpful because when you find yourself in a
Speaker 1: situation where something needs to be fixed quickly, a lot
Speaker 1: of times it's easy to cut corners and you just
Speaker 1: kind of take the first number that someoney gives you,
Speaker 1: or the first number maybe even find online. But if
Speaker 1: you know that like, oh, I've heard so and so
Speaker 1: has used this guy before, or oh, I've heard that
Speaker 1: this H Fact lady is just amazing by the way
Speaker 1: you and I both use the same H Fact lady
Speaker 1: and she is amazing. But having these names and numbers
Speaker 1: and what they do on your phone and easily accessible
Speaker 1: is is so important as well. Yeah, and Matt two,
Speaker 1: to your point, it's important to have friends or at
Speaker 1: least have you know, contacts in the space who also
Speaker 1: managed properties so that you can share that kind of information. Oh,
Speaker 1: you've got a great handy person, I've got a great
Speaker 1: H Fact lady, and you can swap contacts and um,
Speaker 1: you know it's not always full proof, but it's really
Speaker 1: helpful to know people who know people and to have
Speaker 1: that ability to share, especially when you need somebody last
Speaker 1: minute and your person is busy and you gotta find
Speaker 1: somebody else on the fly. Yeah, you don't have to
Speaker 1: start from scratch, right, you don't have to reinvent the wheel.
Speaker 1: It's just I can quickly check in with you and say, Hey,
Speaker 1: who's that yard guy that you've used before. I've heard
Speaker 1: you talk about before. I need to finally get his
Speaker 1: name in my phone and give him a call. Yes,
Speaker 1: it makes it so easy, it does, all right. Another
Speaker 1: really important thing when you're treating your your rental properties
Speaker 1: like a business is that you you have to have
Speaker 1: a system, a clear system for tenant communication, and you
Speaker 1: have to set clear guidelines as to how your tenants
Speaker 1: should notify you of any problems with the property. Matt,
Speaker 1: I made this mistake a big mistake early on when
Speaker 1: I was managing rental properties. I gave them my my
Speaker 1: cell phone number, uh, my email address. It was like,
Speaker 1: just they can contact me anyway they wanted, whenever they wanted,
Speaker 1: and it wasn't clear how I preferred to be contacted,
Speaker 1: and I would respond almost at any point in time
Speaker 1: if they texted me, like nine o'clock at night, Hey, Joel,
Speaker 1: can you take a look at this really minor problem
Speaker 1: sometime in the next couple of weeks. And I'm responding
Speaker 1: and like, I'm about to go to bed, Man, I
Speaker 1: don't want that. I'm placing you out if on your
Speaker 1: mind you're dreaming about it exactly exactly, and that wasn't good,
Speaker 1: So I would suggest picking one Personally. I'm email only
Speaker 1: at this point. It sucks to get that text message
Speaker 1: that something's broken in the evening, but I don't mind
Speaker 1: it nearly as much when it comes across an email form.
Speaker 1: I feel like I can dismiss that for twenty four
Speaker 1: hours if need be, and create that system and stick
Speaker 1: to it in order to avoid having to respond in
Speaker 1: ways that you don't love or that do stress you out.
Speaker 1: I think at the same time, it's just helpful for
Speaker 1: your tenants to know, all right, this is the method
Speaker 1: how I contact my landlord when something arises. If there's
Speaker 1: a few different methods, it can get confusing. Yeah, And
Speaker 1: over the years, Man, I found that what's been really
Speaker 1: helpful for me is I've set up separate email addresses
Speaker 1: per property, and I've got this Google Voice number as
Speaker 1: well that I typically field those initial showings and you
Speaker 1: know when when those listings are alive. And that's because
Speaker 1: I found that, just like that showing in listing time period, right,
Speaker 1: that it can be so overwhelming because people, I mean
Speaker 1: they're emailing you and calling and you know, trying to
Speaker 1: call you in text, like I've turned off call forwarding,
Speaker 1: you know, from the Google Voice number. I'm I'm like
Speaker 1: only text, but folks are going to reach out to
Speaker 1: you at all hours of the day and night to
Speaker 1: to try to make sure that they're able to see
Speaker 1: that property asap we want to move in, and then
Speaker 1: you never hear from those people. And so having some
Speaker 1: of those those barriers between you, uh and getting in
Speaker 1: a good night's sleep is important in particular during those
Speaker 1: kind of higher stress periods where you're doing a lot
Speaker 1: of communicating, you're fielding a lot of inquiries. Um. But
Speaker 1: you know what I found though, for me personally, is
Speaker 1: that after that, like once I actually get a tenant
Speaker 1: in there, I'm very comfortable giving them my you know,
Speaker 1: my cell number for them to have my personal email address.
Speaker 1: And again, in the past seven years, I've never had
Speaker 1: a call or a text in the middle of the
Speaker 1: night where something you know, where something was wrong. And
Speaker 1: that's because I too, have also commune dedicated to them
Speaker 1: how I prefer to be contacted about things that are
Speaker 1: non emergencies. Uh. But you know, granted, if there's something
Speaker 1: going on that's an emergency, I want them to call me.
Speaker 1: But that being said, knock on the wood, that's not
Speaker 1: something that, uh, that I've had to deal with, and
Speaker 1: it sounds like you haven't either. Yeah, yeah, I mean
Speaker 1: I think those those stories are are overblown. And usually
Speaker 1: if you have a lot of tenant horror stories in particular,
Speaker 1: like everybody's bound to get something here, they're right, for sure.
Speaker 1: But but oftentimes that is because there wasn't enough due
Speaker 1: diligence done on the front end. I think that's almost
Speaker 1: always where people make the mistake and then they pay
Speaker 1: for it later on. Yeah, and real quick too. You know,
Speaker 1: while we're talking about communication here, I think it's really
Speaker 1: important to communicate about how rent is to be collected
Speaker 1: and when it's to be collected. Right, And obviously this
Speaker 1: is you talked about the least earlier. This is something
Speaker 1: that should be very clearly spelled up in the lease.
Speaker 1: But if your tennants know how it is that they're
Speaker 1: supposed to pay rents, I feel like that's another one
Speaker 1: of those points of tension that that folks are like, Oh,
Speaker 1: I've heard horror stories about you know, having to collect
Speaker 1: rent and what happens if you don't. But again, if
Speaker 1: that's something that you've clearly communicated with them and that's
Speaker 1: spilled out in the least, that's that's a headache that
Speaker 1: you can avoid. Yeah, and make it easy on them,
Speaker 1: don't don't make them drop a check in your mailbox.
Speaker 1: How about make it easy for us for yourself, the
Speaker 1: easiest thing to do is really the easiest thing for
Speaker 1: both parties. We all have smartphones and venomouh cash app.
Speaker 1: It is so easy and it's so easy to set
Speaker 1: calendar reminders. Can you even set up automatic payments with
Speaker 1: venmo or or cash app? Not that I know of,
Speaker 1: but I don't know if you can either. But it's
Speaker 1: so easy to set up a recurring calendar reminder and
Speaker 1: just with a few clicks, few slipes with the thumb
Speaker 1: and man, you've got that rent paid. It's true. Well
Speaker 1: on the note of getting paid, we need to talk
Speaker 1: about assessing your property performance every year. Are you making
Speaker 1: money right? And and that is an important question to
Speaker 1: ask if you're managing a rental property. You know, if
Speaker 1: you had to replace a roof or an h VAC
Speaker 1: unit this year, maybe your cash flow is down, but
Speaker 1: hopefully you're sending aside money every month for maintenance anyways, Right,
Speaker 1: if you're regularly going over your budge it did maintenance amount,
Speaker 1: then it might be time to be a little more
Speaker 1: realistic with how much you're you're truly gonna make with
Speaker 1: that property. And there is a chance that if you
Speaker 1: keep overshooting on maintenance by a good bit that the
Speaker 1: the actual property just has too many issues and it's
Speaker 1: not going to be a money maker for you. And
Speaker 1: if that's the case, then it might mean it's time
Speaker 1: to sell. But there is something about being able to
Speaker 1: assess every single year, like how is this property doing
Speaker 1: for me? And you know, Emily and I we get
Speaker 1: jazzed at the end of the year to talk about, well,
Speaker 1: how well have these properties performed, how are they doing
Speaker 1: for their for our family? Are they still worth the
Speaker 1: time and energy that we're putting into them? For what
Speaker 1: we're getting out of them, um and and so that
Speaker 1: that's always a good discussion. Having that performance assessment is
Speaker 1: crucial I think to managing properties well and it gets
Speaker 1: me excited to continue managing knowing that they are actually
Speaker 1: doing what I I've set out for them to achieve,
Speaker 1: like that they're actually helping our family build wealth and
Speaker 1: create an alternate income stream exactly. Yeah, that's the primary goal, right,
Speaker 1: But also let's let's talk about software and some of
Speaker 1: these different platforms out there. You can use these to
Speaker 1: help you just to stay organized and communicate well if
Speaker 1: you feel that you need to kind of operate within
Speaker 1: a system, you know, if if those boundaries around communication,
Speaker 1: you know, if you found that those are harder to set, uh,
Speaker 1: then it might be worth checking out Cozy dot c
Speaker 1: O cozy co We We mentioned them earlier, but they
Speaker 1: are the like the best all in one software that
Speaker 1: we know of. It is free for landlords and tenants,
Speaker 1: but they make their money in other ways, you know,
Speaker 1: like if the tenant chooses to pay rent via credit card,
Speaker 1: they can do that, but it also charges them a
Speaker 1: small fee. And they also make their money to on
Speaker 1: screenings that you would perform through that platform, but you know,
Speaker 1: they offer an awesome platform to help you to manage
Speaker 1: those properties and to communicate with your tenants, um, you know,
Speaker 1: take maintenance request organized forms just overall stay organized. And
Speaker 1: rent Ready is another platform that's worth looking at. It's
Speaker 1: that one costs actually nine dollars a month if you
Speaker 1: pay a year at a time, and I feel like
Speaker 1: that was a little more set up for if you
Speaker 1: have just a whole massive portfolio of properties. I saw.
Speaker 1: One of the cool things that outrun ready is that
Speaker 1: tenants can upload videos to it, you know, and so
Speaker 1: there's a maintenance request, they can accompany that request with
Speaker 1: a video. But again, if you're more of a mom
Speaker 1: and pop landlord like Joel and I are, and you
Speaker 1: just have a handful of properties, and you've communicated well
Speaker 1: with your tendants and they understand you and you understand them, uh,
Speaker 1: sometimes you can kind of sidestep some of those larger
Speaker 1: platforms and software as long as you have set those
Speaker 1: clear communication boundaries with your tenants. Yeah, and I love
Speaker 1: that these that these platforms can offer just like a
Speaker 1: whole range of help. Right like your your tenant can
Speaker 1: not only just pay digitally there, which makes it easy
Speaker 1: for you and for them. They can also submit a
Speaker 1: maintenance request. You guys, communicate solely through that platform, if
Speaker 1: that's what you want. It's just kind of nice. You
Speaker 1: just log into the site and like everything that you
Speaker 1: need to do in order to deal with me and
Speaker 1: issues with the home is right here, right, And so yeah,
Speaker 1: I think it's it's nice to be able to to
Speaker 1: have that as a system. Really to help you create
Speaker 1: that system, it's important to be firm but fair with
Speaker 1: your tenants, right, stick to the stuff you've put in
Speaker 1: the least. Being fair general is a good rule to
Speaker 1: a bye bye in life, right, Yeah, totally. I think
Speaker 1: like that is one thing though, Matt, that that tripped
Speaker 1: me up early on, is if something is in the least,
Speaker 1: you need to stick to it, and when it comes
Speaker 1: to like a late payment or something like that. In
Speaker 1: the beginning, I was like, I was pretty mushy about those.
Speaker 1: You want to be cool about it. You're like, oh,
Speaker 1: don't worry about it, you know you want to be
Speaker 1: you want to be likable, right exactly. And then I
Speaker 1: found out that that that just kind of led to
Speaker 1: more issues down the road. And so yeah, that being
Speaker 1: firm upfront is important. Obviously, COVID has made interactions with tenants.
Speaker 1: Tenants um really different these days, right, late fees are
Speaker 1: way less rigid right now, considering the circumstances. Uh, We've
Speaker 1: talked about that on the show. How I've changed the
Speaker 1: way that I'm interacting with with my tenants, the concessions
Speaker 1: that we've made to try to to help them out
Speaker 1: and keep them um in in the place that they've
Speaker 1: been for quite a long time, and help keep some
Speaker 1: stability for them at the same time. But in typical times,
Speaker 1: sticking to what has been written in your lease is
Speaker 1: is crucial. I think for a la lord, and the
Speaker 1: more you deviate away from what you've have in writing
Speaker 1: and you've both acknowledged um and and signed your name to,
Speaker 1: the more likely you are to run into other issues. Yeah.
Speaker 1: I mean it's just not fair to your tenants as well,
Speaker 1: Right Like if if one month you're like, oh no,
Speaker 1: don't worry about the late fee, but then the next month,
Speaker 1: the very next day after when rent was due, you're
Speaker 1: you're kind of hounding them saying, hey, where's rent. I mean,
Speaker 1: that's not fair, that's not what you're looking for out
Speaker 1: of the landlord, right like you, As a lay lord,
Speaker 1: I want to make sure that my tenants feel like
Speaker 1: they have somebody who they can count on to provide
Speaker 1: them safe and clean housing, you know that at a
Speaker 1: price that we've agreed to. And so communicating and sticking
Speaker 1: with those terms, I think is is really important. I
Speaker 1: like what you said, how how those terms are not
Speaker 1: only for the tenant, but they're also for us as well,
Speaker 1: to make sure that, like, well, even though we don't
Speaker 1: want to abide by these things and everybody in the
Speaker 1: short term would might benefit a little bit by kind
Speaker 1: of fudging it, it's it is really important to kind
Speaker 1: of stick with it because having those clear expectations is
Speaker 1: pretty vital. Yeah, I agree, And Matt, we've talked a
Speaker 1: lot about finding the right tenant. We've talked a lot
Speaker 1: about it stabbor good systems to manage a rental property effectively.
Speaker 1: But when is it time to hire a property manager
Speaker 1: to do a lot of that managing for you? Well,
Speaker 1: we'll answer that question right after this break. All right, man,
Speaker 1: we are back from the break, and we just spent
Speaker 1: a chunk of time talking about managing properties ourselves. So
Speaker 1: let's talk. You know, you hinted at this but let's
Speaker 1: talk about when it makes sense to hire a manager,
Speaker 1: and that is never just kidding. Um. We believe that
Speaker 1: you should at least try to self manage before you
Speaker 1: look to hire someone to manage them for you. Like
Speaker 1: we feel it's just such a good learning experience that
Speaker 1: is worth having. Uh. And it will also help you
Speaker 1: to learn what questions to ask if you are looking
Speaker 1: at a potential property manager as well. Yeah, if you've
Speaker 1: never managed a property, you're going in the dark when
Speaker 1: you're interviewing property managers. You don't really know what to
Speaker 1: ask them, and and so it's just much harder to
Speaker 1: assess whether you're hiring someone who's going to do a
Speaker 1: good um or not. Yeah, exactly. I kind of liken
Speaker 1: this to at least being willing to like pick up
Speaker 1: a paint brush, like when you first buy a property.
Speaker 1: You know, Uh, if you're willing to maybe put in
Speaker 1: a little bit of elbow grease at the beginning, then
Speaker 1: maybe rental property ownership and management, you know, it may
Speaker 1: not be for you. Matt. So, my mom, she really
Speaker 1: likes h G TV. I've heard and I remember watching
Speaker 1: this one episode one time with her, uh, and it
Speaker 1: was like this this this couple who who wanted to
Speaker 1: flip a home. Um, and there was like this expert
Speaker 1: who was helping them along the way, but they didn't
Speaker 1: want to get their hands dirty at all. They didn't
Speaker 1: even want to go down in the basement they and
Speaker 1: see some of the issues that existed with the property.
Speaker 1: They just showed up with a bunch of money. Basically, yeah, exactly,
Speaker 1: let's be on this show like you're just gonna do
Speaker 1: it for us, right, and we're gonna make money in
Speaker 1: the end. That's just a terrible approach when it comes
Speaker 1: to buying a rental property, Like you you have to
Speaker 1: be willing to one look at the whole house, but
Speaker 1: then yeah, I get your get your hands dirty, um.
Speaker 1: And I think the same is true when it comes
Speaker 1: to managing. You have to at least be willing to
Speaker 1: try it, and you'll learn a lot in those first
Speaker 1: six months. You'll you'll maybe learned that you really want
Speaker 1: a property manager, or you might learn that it's actually
Speaker 1: easier than you thought it was. Um. But how do
Speaker 1: you know when you are ready to get a pro
Speaker 1: and what they normally charge. Well, if you just don't
Speaker 1: want managing to be a part of your life, you're
Speaker 1: one of those people who says, I like real estate,
Speaker 1: but I don't want to manage it. I think that's
Speaker 1: an okay way to approach it. But just know that
Speaker 1: you're not going to find anyone else who will care
Speaker 1: for your property as much as you do. The little
Speaker 1: things that I see that I can improve on the
Speaker 1: properties that I own. Well, somebody who's managing the property,
Speaker 1: someone who's just getting paid to to essentially fix things
Speaker 1: when they break, isn't necessarily looking for those cool, inexpensive
Speaker 1: improvements that you can do along the way that will
Speaker 1: make tenants happier or potentially even be able to get
Speaker 1: you more rent. That's what I mean by by you
Speaker 1: essentially being the one who's going to care about that
Speaker 1: property the most. But if you are one of those
Speaker 1: people who knows you want to invest in real estate,
Speaker 1: but you also want to have a property manager, make
Speaker 1: sure to factor in those costs when running the numbers
Speaker 1: on a property. Matt and I were fans of people
Speaker 1: factoring in the potential costs of a property manager into
Speaker 1: the numbers just in case, no matter what. But if
Speaker 1: it's a non negotiable, then then you have to have
Speaker 1: it in there and and it will cost you eat
Speaker 1: into some of those profits by you paying someone else
Speaker 1: to take on the role of managing the property. It's
Speaker 1: it's gonna cost you money. Yeah, and you know costs.
Speaker 1: It truly is like the biggest consideration. Uh. And that's
Speaker 1: something that we're gonna we will get to but we'll
Speaker 1: get to that here in a little bit. Joe. I'm
Speaker 1: thinking through how even though I've purposely purchased properties you know,
Speaker 1: nearby and created systems that make them easier to manage, like,
Speaker 1: I've still considered hiring a property manager recently, life and
Speaker 1: having a bunch of kids, like, life gets busy, and
Speaker 1: so I want to continue to own these homes. But
Speaker 1: I you know, I get less excited by the management aspects,
Speaker 1: you know, over time. I think that's a large part
Speaker 1: of why I haven't necessarily looked to expanding the number
Speaker 1: of properties I have, because I'm like, you know what,
Speaker 1: like the ones I have right now are manageable, and
Speaker 1: I like the level of my involvement. But I know
Speaker 1: that like man if I'm if I'm gonna get a
Speaker 1: bunch of more properties, I don't want to say it's
Speaker 1: a full time job, but it's going to certainly require
Speaker 1: a lot more of your time, and that's something I'm
Speaker 1: kind of short on at the moment. And I'm also
Speaker 1: stuck in this hard place there too because I'm also
Speaker 1: not quite yet willing to pay for someone to management properties.
Speaker 1: And so that's why at the moment, Yeah, I'm not
Speaker 1: looking to expand that real estate portfolio. Yeah I understand. Yeah,
Speaker 1: if I got a couple more, I definitely gotta find
Speaker 1: find somehow I can't do it myself anymore. But I
Speaker 1: think another another reason that people turn to property managers
Speaker 1: that makes sense is if they're considering long distance ownership
Speaker 1: of a property, Because managing a physical property from hundreds
Speaker 1: and hundreds or thousands of miles away just it makes
Speaker 1: it incredibly hard. So if you're moving but you still
Speaker 1: want to own that property that you that you own
Speaker 1: that's nearby, hiring a manager makes a whole lot of
Speaker 1: sense unless the person renting your property is someone you
Speaker 1: know closely. Having a local property manager I think becomes
Speaker 1: essential when you're not living close by um in order
Speaker 1: to be able to manage personally. And even if it
Speaker 1: is some when you know, you still have to manage
Speaker 1: it and that's just hard. To do from from far
Speaker 1: away right. I mean, I'm thinking too of maybe another
Speaker 1: reason why I might be going to have a manager.
Speaker 1: I'm thinking I think it was five Am Joel, remember
Speaker 1: our interview with him, uh, and I think it was him.
Speaker 1: He shared the story about how he had gone in
Speaker 1: to talk you know, with his tenants that he has
Speaker 1: had about you know, the next year, and he kind
Speaker 1: of like showed up with the lease and how you know,
Speaker 1: and Rent was also going to be going up, but
Speaker 1: he left that conversation with a signed lease, but Rent
Speaker 1: went down, and he readily admitted that you know what,
Speaker 1: I am a terrible landlord. This is yeah, this isn't
Speaker 1: something that I'm good at. And so I think it's
Speaker 1: important too to know your strengths. If you know that
Speaker 1: even though you know the least spells out these certain things,
Speaker 1: it still comes down to you as an individual to
Speaker 1: enforce it. And if you know that that's not something
Speaker 1: that you want to spend your time doing, or maybe
Speaker 1: it's something that you're not that great at, I think
Speaker 1: having a manager to kind of you know, be your
Speaker 1: go between and to enforce those policies and those rules
Speaker 1: for you, that might be something that's worth the money
Speaker 1: as well. Yeah, or if managing that property is going
Speaker 1: to get you emotionally tied up into knots consistently every
Speaker 1: time a problem comes up, which is something that I
Speaker 1: struggle with, to be honest, um, and it's something that
Speaker 1: I've gotten better with over time. Uh, but for me,
Speaker 1: that would be one of the reasons to potentially consider
Speaker 1: a property manager as supposed to doing it myself. But
Speaker 1: that's also what makes you a decent human being jeweled. Yeah,
Speaker 1: maybe so, some might, some might disagree. Not everybody can
Speaker 1: be cold hearted robots like I. All right, well, let's
Speaker 1: talk about how to find a decent human being rental
Speaker 1: profit for for a rental property manager, and like, if
Speaker 1: you do want to hire a service to manage those
Speaker 1: properties for you, there's a good way to go about it,
Speaker 1: and the best way, I think are one of the
Speaker 1: best ways is to hire a company that investor friends
Speaker 1: have had positive experiences with over the years. Again, it's
Speaker 1: another reason why it's crucial to have a network of
Speaker 1: investor friends right at. Joining a local real estate group
Speaker 1: in your community can help connect you to lots of
Speaker 1: people that can help you in your investing endeavors, including
Speaker 1: potential property managers. Matt one of my investor friends. He
Speaker 1: also manages properly, who's not you? And I know him
Speaker 1: incredibly well now and I understand how he manages his properties.
Speaker 1: So if I do get to the point, um, and
Speaker 1: you know, I get closer and closer every year where
Speaker 1: I want to hire someone to manage the properties for me,
Speaker 1: He's going to be the first place I've turned because
Speaker 1: you know, I know him well, I know how he
Speaker 1: manages his properties, and I feel comfortable. I would feel
Speaker 1: totally comfortable having him manage mine. Um. But those are
Speaker 1: the kind of things you learn through a network of
Speaker 1: people over over time. Right. Yeah, But if you happen
Speaker 1: to to not know somebody who is, you know, also
Speaker 1: a property manager, you can definitely check online and read reviews,
Speaker 1: just like we do for anything else we do it
Speaker 1: in our life. Right. You can go to All Property Managements.
Speaker 1: That's a great site to find local property managers, uh,
Speaker 1: and you can request a quote for their services online.
Speaker 1: It's super easy. But then beyond that, make sure that
Speaker 1: you actually interview a few different property managers to get
Speaker 1: a feel for for you know, what it is they
Speaker 1: offered and how they differentiate themselves from any old standard
Speaker 1: property manager. Like we're saying earlier, you want to be firm,
Speaker 1: but at the same time you do want to be fair,
Speaker 1: and that's kind of the it's it can be a
Speaker 1: difficult balance to to strike as individuals. It's something that
Speaker 1: we can do ourselves, but finding someone else who can
Speaker 1: do a good job taking care of your tenants like that,
Speaker 1: it can be a little more difficult. So make sure
Speaker 1: that you don't just go with the first quote that
Speaker 1: you receive back in your inbox, you know, yeah, yeah,
Speaker 1: And then ask the right questions right of the companies
Speaker 1: that you're talking to, Uh, interview three or four potential
Speaker 1: property management companies. Ask questions like where do you advertise
Speaker 1: for potential tenants? If they say, oh, just Craigslist or
Speaker 1: just a sign in the yard, I mean that might
Speaker 1: have been cool, worst, but it doesn't. That doesn't cut
Speaker 1: in anymore. Also ask stuff like what your overall vacancy rate.
Speaker 1: You'll you'll realize too that that's an important question because
Speaker 1: if they're not keeping tenants happy, tenants are gonna move
Speaker 1: out a whole lot more quickly. Or if they're not
Speaker 1: doing a good job filling a vacant apartment, their their
Speaker 1: vacancy rates are going to be higher. That means they're
Speaker 1: not doing a good job listing the property and finding
Speaker 1: qualified people to live in it. And you can even
Speaker 1: ask to speak to tenants that they manage and ask
Speaker 1: that tenant about how they respond to maintenance requests and
Speaker 1: what their communications style is like. Those are the kind
Speaker 1: of things they're going to help you determine whether or
Speaker 1: not a rental property manager is going to be a
Speaker 1: good fit for you or not. And then lastly, as
Speaker 1: you are searching for a manager, make sure that you
Speaker 1: read through whatever agreement that they send your way, that
Speaker 1: you read through that pretty thoroughly. You know, you want
Speaker 1: to make sure that you know the scope of the
Speaker 1: services that they're gonna provide you. You don't want to
Speaker 1: just focus on on going with the lowest price. You
Speaker 1: get what you pay for. And so, Joel, while we're
Speaker 1: talking about price and cost, right, let's talk about what
Speaker 1: most property managers charge and what they typically do is
Speaker 1: they charge half or a full first month's rent when
Speaker 1: a new tenant moves in, and then in addition to that,
Speaker 1: typically they will charge anywhere between seven and twelve percent
Speaker 1: of the monthly rent you know, they might even charge
Speaker 1: a setup fee upfront. Some property managers opt for a
Speaker 1: flat fee instead of a percentage of the rent. So
Speaker 1: often times though these fees are they're not set in stone. Uh,
Speaker 1: these are things that you can negotiate some Yeah, I
Speaker 1: think those are some good ballpark numbers, and those are
Speaker 1: the kind of things. Yeah, you can push back on
Speaker 1: and say, well, your competitor charges this, Well, why why
Speaker 1: do you charge this much? And they might say, our
Speaker 1: services are better. Here's what we're doing. Um, here's additionally
Speaker 1: what you're getting if you hire us instead of the
Speaker 1: other guy. This is a place though, where when we're
Speaker 1: talking about frugal or cheap, Matt, you don't want to
Speaker 1: go cheap when you're talking about someone who's taken care of,
Speaker 1: in all likelihood one of the biggest investments that you've
Speaker 1: ever made in your life having a rental property. You
Speaker 1: want someone who is going to care for it the
Speaker 1: way you do. And if that means an extra one
Speaker 1: or two percent of the rent every single month is
Speaker 1: going towards someone who is going to do just a
Speaker 1: fantastic job and manage your place the way you would,
Speaker 1: then I think it's worth it. Don't cheap out when
Speaker 1: you're hiring a rental property manager and kind of know
Speaker 1: the ballpark, know when you can push back and no
Speaker 1: one you can negotiate. But ultimately you want to find
Speaker 1: someone who is going to do a killer job, not
Speaker 1: someone who's just gonna do like an average job, right, right.
Speaker 1: But here here's the thing though, in the end, the
Speaker 1: cost of property managers, like that is what is keeping
Speaker 1: you and I from you know, jumping on the property
Speaker 1: manager train, you know, Like, I mean that's for you,
Speaker 1: I'm guessing that's probably your biggest consideration. Like, that's the
Speaker 1: biggest thing that you have issue with? Is that so free?
Speaker 1: I do it tomorrow? Yeah? Why not? Exactly if you
Speaker 1: had somebody who's gonna do a great job for you
Speaker 1: and it's going to be completely free pro bono, why not.
Speaker 1: But when it costs you ten percent of your rents,
Speaker 1: that could easily be of your profit. Right, So, say
Speaker 1: you know you've got a mortgage that's a thousand bucks
Speaker 1: and it's a property that you can rent out for
Speaker 1: maybe two thousand dollars if they're collecting two dollars every
Speaker 1: single month and in your profits are one tho dollars
Speaker 1: and you're only left with eight hundred bucks I mean,
Speaker 1: is a huge stinking fee, you know, and often the
Speaker 1: numbers are are worse than that for most Yeah, and
Speaker 1: that's that's the generous picture I just painted. It could
Speaker 1: of the profits um are getting it eaten into by
Speaker 1: by hiring someone to manage for you. So you have
Speaker 1: to know here's what the typical costs are. I agree.
Speaker 1: And then also, well is it worth it or not?
Speaker 1: Because it completely changes the dynamics of how profitable that
Speaker 1: rental property is. Yeah, And here's the other thing too.
Speaker 1: I think a lot of times folks will think that
Speaker 1: if I have a property manager, it alleviates some of
Speaker 1: the stress of when things are coming out prepares that
Speaker 1: need to be made, But you're still on the hook
Speaker 1: for those repairs, right. You're just not necessarily the one
Speaker 1: who's choosing the maybe even the best vendor that you know,
Speaker 1: the best company to do the job. Instead, you're just
Speaker 1: told that this is how much it costs. And so
Speaker 1: I know, at least for me personally, I could see
Speaker 1: myself getting frustrated because I'm like, well, did they go
Speaker 1: with like someone who's doing really good work or somebody
Speaker 1: who just advertises a lot in their name is around town.
Speaker 1: I think this is an instance where maybe being a
Speaker 1: slightly more proactive landlord, how that can eliminate a lot
Speaker 1: of headaches, right if you're kind of leaning into problems
Speaker 1: before they even become problems, right, instead of just ignoring
Speaker 1: them and sweeping them under the rug, because you know what,
Speaker 1: eventually you're going to have to deal with those issues.
Speaker 1: You're going to have to deal with as maintenance requests.
Speaker 1: You're going to have to make those repairs, and it's
Speaker 1: good to handle those right away. And don't think that
Speaker 1: just having a property manager takes you off the hook,
Speaker 1: because guess what, you are still responsible for those repairs.
Speaker 1: It's just that now there's a lot of other things
Speaker 1: that aren't in your control. Yeah, man, Matt. Another factor
Speaker 1: when you're talking about whether a property manager is worth
Speaker 1: the cost or not. The most recent rental property that
Speaker 1: I purchased a couple of years back, well, the rent
Speaker 1: that the property management agency was asking was was way
Speaker 1: under the market value, and so they didn't think the
Speaker 1: home was worth as much as it was. I got
Speaker 1: a pretty decent deal and ultimately, over the years have
Speaker 1: been able to raise the rent to market rate. And
Speaker 1: if I had a property manager who was like, no,
Speaker 1: we're only going to ask this much for your place
Speaker 1: and they're undervaluing it. That's that's how our vacancy rates
Speaker 1: so low, because our rents are exactly because that's another
Speaker 1: thing you have to watch out for us that there
Speaker 1: are all these little things that can eat into the profits. Um.
Speaker 1: And again not denigrating property managers. There are some great
Speaker 1: ones out there, and at some point I might go
Speaker 1: with in that direction. Um, But for the diligent landlord
Speaker 1: who is managing rental properties effectively, we think most of
Speaker 1: the time they don't need a property manager. They're gonna
Speaker 1: be more profitable, their home is going to be kept
Speaker 1: in an even better condition. Um. And it really won't
Speaker 1: be all that draining being a landlord if you're managing
Speaker 1: the properties you own effectively. That's right, man. Yeah, I
Speaker 1: could not agree anymore. Let's go ahead, No, get back
Speaker 1: to the beer this episode and I were drinking uh
Speaker 1: basement Pog I p a. This is by a scoff
Speaker 1: Law brewing company here in Atlanta. Actually, we recently had
Speaker 1: a pog beer on the episode where it's an I
Speaker 1: p A with passion fruit orange and guava. Oh yeah, man,
Speaker 1: what were your thoughts on this beer? Again? Do this
Speaker 1: is a tropical punch beer? Man? This had all of
Speaker 1: this like Island caribbeans sort of uh fruit flavor going on,
Speaker 1: and it was like abrasive in the best way. I
Speaker 1: thought it was like a West Coast style pog. I
Speaker 1: thought it had like some of the bitterness from the
Speaker 1: hops along with the juiciness from from the fruits that
Speaker 1: were that were in the beer. Yeah, I felt this
Speaker 1: one was pretty heavy on the po and less on
Speaker 1: the g I felt like it had a little bit
Speaker 1: less of that guava, but I felt like I was
Speaker 1: tasting a lot of the passion fruit, a lot of
Speaker 1: the orange, lot of orange. I felt like it almost
Speaker 1: seemed like there was a layer of like orange essential
Speaker 1: oils like floating on the top of the beer, like
Speaker 1: as you were to kind of sip it back. But yeah, man,
Speaker 1: I am glad that you and I got to enjoy
Speaker 1: this one. This is kind of nice too, for a
Speaker 1: nice fall day like today. It's been a while since
Speaker 1: I've had a scofflaw beer, but I'm glad they're back
Speaker 1: on my radar now. And it's maybe a brewery that. Yeah,
Speaker 1: you and I need to hit up soon, dude. Well cool, buddy,
Speaker 1: that's gonna be it for this episode. Listeners can find
Speaker 1: our show notes up on our website at how to
Speaker 1: money dot com. We'll be sure to link to any
Speaker 1: of the different resources for you if you do happen
Speaker 1: to start managing property yourself, which we would encourage you
Speaker 1: to do. Yeah, yeah, we think for for so many people,
Speaker 1: investing in a rental property can be just a fantastic
Speaker 1: vehicle to long term wealth building. And also, Matt, I
Speaker 1: just want to say thanks to everybody who listens consistently
Speaker 1: to the show. We really appreciate it. If you get
Speaker 1: the chance, If you haven't left a review, we'd appreciate
Speaker 1: that too, especially at Apple Podcasts. It just goes a
Speaker 1: long way to helping other people find the show find
Speaker 1: information that they can use to help them in their
Speaker 1: everyday lives when it comes to money. All right, Matt,
Speaker 1: that's gonna do it for this episode. Until next time.
Speaker 1: Best Friends Out, Best Friends Out.