I've been stationed in the Norfolk area for years but I'm getting out this summer. We bought a nice house here two years ago that we plan to rent out.

I am really on the fence about using a property manager. I will be living about 4 hours away and so can't keep a close eye on it. It would cost about $200 a month. I can live with that if it saves a bunch butt pain and keeps the house rented and in good shape. But, if the renter later decides to buy from me....then I will have to pay the realtors fee if they placed the tenant, rather than being able to do a private sale.

If I use a property manager, I am concerned about finding a good one that I can trust. I've heard some of bade experiences in general.

I'd be interested to hear others good/bad experiences renting with or without a management company.

I've got a property manager taking care of my mom and dad's old place, about three hours from here.

It's costing me $75 per month.

It stood vacant for over a year, and Dad was too old to keep it up properly before we moved him to a nice retirement center near here. Getting it back in good shape has not been easy, and the property manager has earned his keep.

Since it's in a small town, the family has a lot of ties there. It was easy enough to call a friend in the real estate business, who recommended him. I certainly would not turn the management over to a stranger without extensive background checking.

If I planned to rent, I would seriously consider a good property manager, but $200.00 a month sounds on the high side. Around here they can usually be had for about half that. If they keep the place rented just one additional month a year they've earner their keep, and that's before they pick up the rent and answer that 2 a.m. maintenance call for you.

I was a property manager for a duplex rental for 3 years. The owners lived out of state. I was paid $300 per month. It was a newer property so not a falling in dump or slum.

I would never ever do it again, not for $3000 per month. It was the absolute worst job I've ever had in my life, worse than shoveling [bleep] at a hog farm. I'm a people person and I could not put up with tenants. I know people do it all the time and make good money at it but it was NOT for me. I firmly feel that I will never own or manage another rental so long as I live. If for some reason I find myself with any kind of rental property I will definately use a reputable property manager until such time as I can sell. If they are a good manager they definatly earn their money.

I've got a couple of rentals and I use a property manager. Costs me 6% per month. I can live with that. These are fairly new houses and they are pretty nice. I want a property manager that knows how to do credit checks, back round checks, I want to know about the people moving in. I have my rules that I had to his and he's done me a good job. I live probably 8 miles from the rentals, but I pay him to pick good tenants and make no bones about that. So far so good. NO CATS, they can really make a mess. I expect him to go in there every so often to check on the house "safety check". Something needs to be done I send a handy man friend. He checks things out to. Money well spent. Unless it's a pretty expensive house $300 sounds pretty steep.

I had a decently nice house built in Beaufort, S.C. when I was stationed there in the mid 90's. When I transferred I kept it for a rental and paid a property manager to do it for me. I'd highly recommend it, she took care of everything and it would have been a huge PITA to do it from 8 hours away. I'd definitely do some research on them though, the lady I had was well known and a no nonsense type of gal, she kept things running well. If something broke she called the repairman and took care of it, I heard about it after the fact unless it was something spendy then she'd call and talk to me first.

$200 a month does sound kind of high though, I think the going rate is usually about 10% of the rent so unless you're renting for $2K a month I'd say it's high.

Check with the folks at the housing office on the base, they should know who are the good property managers in the area.

People will wreck your $hit and have not a care in the world. My family owns many rentals and spent the better part of my high school summers working on them. Even if you check them out to the smallest degree some will slip through. My BIL rented a house to some people that checked out all good. Well they left without telling him in the middle of February let the power get shut off and well lets just say some plumbing was in order........ Like all the plumbing in the whole house.

We rented out our house on the Kenai Peninsula, Alaska in the mid 90's for a 2 year stint in Barrow. Bad move.

In 2010 for a "1-3" year stint in Kotzebue (we are still in OTZ tho as I type this I am "home" on the Kenai), we left it "empty". With a couple neighbor watch dogs. The rental damage just ain't worth the inevitable deterioration of an empty dwelling, despite the income (potentially $1500 or more/month)

Fucxk home renters!

We have a couple good'uns in our two rental apartments elsewhere, however.

But never again our home.

I am a renter, but I learned early on to respect where I live, mine or not. My uncle lives in the NE but he owns a house in south carolina. He hired a property manager who ended up renting his house to her friends who destroyed the place. He hates being a landlord and I don't blame him.

I have been in this place for almost a year and a half and my landlord said I was his best renter.

Property management is a ripoff business from both sides. They get 10 or 15% and the only thing they do...........is scream at the renter when the check is late.

THEY DO NOT PERIODICALLY INSPECT JACK SCHITT!

Cake job........sorry ass people.

I've been a landlord twice and never again,with or w/o a PM.Too much drama,late payments,stuff stolen or broken beyond repair.We have sold the houses and moved the money into our own home.I thought it would be a manageable semi-retirement income,but I feel better with my money in my hands...

+1000 been there with 2 houses as well with multiple tenants and out of 4 tenants had one decent tenant the rest were tenants from hell.

I've done both. Hire a property management company. Shop around for one you are comfortable with. Being 4 hours away will be a headache without one.

God bless people that rent out properties, there is no way in HELL I could ever do it.

I used a bonded and licensed property management firm for a house I owned in Eureka. They charged 8% of the rent ($1,700 a month) and did an excellent job.

If you use a local bonded and licensed firm and check references you should have no problem.

Now that your house is no longer your primary residence,it may be treated like a "second home"...but if you draw income from it,it may have just become a "business". I'd treat it like one and get a property manager.

You might also want to talk to your CPA to find out how your tax picture might have changed,i.e., going forward will the sale be tax exempt or will you pay capital gains on any profit from the sale? How will the income be treated if you keep it and rent it?

In any event,a management fee and a broker's commission are nothing more than expenses and factored into your tax picture whether you keep it for cash flow, or sell it.

There's also the practical side....you should always keep a third party buffer between yourself and the tenants,preferably a pro who does this sort of thing all the time.

I'd get a good property manager,among other things I'd do, if I intended to hang on to the property.

One nice thing about rent is it isn't counted as income when you are first getting social security.

Like any profession or trade if you get a good one they are well worth the money. If you hire a bad one it a pain in the azz and you wont be happy.

I was a landlord for 18 months and never again, no amount of money is worth the headache.

I'd get a highly recommended property manager-- or not rent it at all.

I was in similar situation 15 years ago, and knew horror stories from friends who had rented their houses. We found a superb property manager who vetted potential renters fiercely, had a stable of reasonably priced good handy men to fix things and handled all. It was such a good experience that I considered buying another house to put under the same property manager.

My wife and I had some extra money and were looking into a rental unit to buy. We though we could find a decent house that had been reposessed. We were in for a big surprise when we saw why ao many repo houses looked like a bargain by the price tag, till we walked inside. We decided to put a good part of the money into American Capital Realty. In the last year we have done about 8% per yr. The report always come in the mail and it has steadily gained in value. Not one month was a loss. They never call me to say th gaage door won't work, the toilet is leaking and most of all I don't hear excuses every 1st of the month when it is time to pay rent. My parents own 6 rental and 2 of the tenants make their life miserable hearing all the lies. " The bank screwed up, my mom has cancer, " I will be there Friday afternoon to pay up" and they don't show up. Got my American Capital Realty report in the mail yesterday, as usuall , right on time. I made 500 bucks in 2 months and didn't hear any excuses neither.

I've been a landlord managing my own properties for 13+ years now and I've heard every lie and bullschit story in the book, including the "My mother has brain cancer" that was just a prelude to ditching out on about 3 months rent. I've dealt with squatters who I drove out by turning into an absolute ruthless, relentless sumbitch, as well as late rents and property damages.

All in all, I've survived and thrived by learning every single wrinkle I can from the stripes on my back. I know landlord/tenant law as well or better than at least one judge and a couple attorneys I've dealt with. I've also learned how to best implement and benefit from insurance and how to use municipalities and HUD to my advantage.

I do not reach in my pocket for repairs unless it's something like a leaky roof or blown water heater or busted plumbing pipe. Property repairs are a normal course of events and every one of my leases has a long paragraph that defines that. You live there, you shower there, it' on you to keep the plumbing clog-free. Don't bother me. Here's a plumber's number.

Sometimes there are bitter pills to swallow, but the rental income from my portfolio of properties provides me a good living and the revenue potential can continue for several lifetimes. The mortgages are getting paid down. Another one will go free and clear in a couple years, leaving just taxes and insurance.

All tenants are not bad, but from my experience, many are. The good ones I treat as mature adults. For example, I have a nice couple living in one of my nicer homes (3/2 pool, 1700 sq ft) who are both TSA agents. They've had a couple of bumps in the road in the last couple years due to our govt idiots at the top. Them, I've worked with, and they've always come through. They've been there since I bought and rehabbed the house in '04. Got it from a Ft Lauderdale cop who had been shot and recently stabbed and was tired of the bullschit. Last I heard he and his wife bought themselves a nice piece of property in TN they were building a campground on.

The azzholes get my full unrelenting attention and wrath and they deserve every stitch of it. I've evicted a bunch of 'em over the years and sleep very well at night in memory of them all. Phugg every last one of them. No regrets. Do it again in a heartbeat and probably sooner.

As far as property managers go, never hired one because most of them down here want 10-11% and usually just pick up the phone and call you at the first sign of a problem.

One last recommendation for anyone considering renting properties to build long term wealth. Don't pick up the phone every time a tenant calls. Use text. It removes the element of emotion they're trying to dump on you. You can think your thoughts through more thoroughly and respond in your own time once you've done so.

HTH.

Best Wishes,
LD

My wife's dad and step-mom had three rental house. One was her's and her son's, the other two were his. From the time they got into rentals until their death they had one kind of problem or another with the majority of their tenants.

One renter who refused to pay rent threatened to file discrimination charges if they tried to evict her, her daughter, and grand baby. Her claim was the eviction was because her daughter's baby was mixed race and not her non payment of rent.

Another eviction was a divorce case where the wife's lawyer advised her to stop paying any bills and rat hole all the money she could get her hands on. They lost at least 3 months rent not counting other related expenses over that one. Both husband and wife had good paying, steady jobs but neither ever paid another penny of the back rent.

Probably the worst happened after my wife inherited her dad's rentals. Long time tenants renting the same rental house for many years. As often as not they were late with the rent but they always paid and they also did some of the minor maintenance themselves without any hassle. Needless to say we were shocked when we read about a major meth lab bust in the local newspaper with the names of the renters and their two young adult sons charged with manufacturing and selling meth out of wife's rental. She immediately evicted them. Wound up costing her a couple of thousand out of pocket just for the mandatory professional hazmat decontamination and follow-up inspection. My wife sold her rental property not long after.

My wife and I had some rental apartments and a condo for about 30 years, one of the happiest days of my life was when we sold the last one. Biggest PITA I can imagine, renters will lie through their teeth to you, trash you place, leave it filthy and leave in the middle of the night. Next door neighbors hired a manager to rent out and look after their house while they were gone for a year in Australia, he put some real trashy folks in there, cost them about twice the income they received to get it back in shape again, plus we were about to sell out and move due the actions of the renters. Never again do I want anything to do with renters of any stripe, not for any amount of money.

I saddle them up and ride them from day one. If they turn out to be decent, I back off and let them be mature adults. If go the other direction, I'm their worst nightmare and ride them like a donkey all the way down.

Never let any tenant bully you in the slightest degree. They can claim discrimination all they want. Doesn't mean a thing in court. You're not paying the rent? That's why I'm discriminating against you and why you're being evicted. Don't give a schit about your half child. Turn the heat up on them and leave it up. If I have to bother myself with typing up and serving any tenant a 3-day Notice, they got exactly that long to straighten the phugg up.

Another tip. Never ever take on ANY tenant who has prior evictions. They are simply bad medicine and will continue to be just that. Often, that's not their only one. They'll piggyback back and forth with other deadbeats using different names on the leases.

One more tip. Never ever let any municipality trick you into paying a deadbeat's water bill. It is their bill. Not yours, as the property owner. You continued to supply water long after they stopped paying. That's on you, sir. You didn't lock the meter? That's also on you, sir.

Here in FL, it is part of the Florida Statutes that the cities may NOT pressure the landlord or lien their properties for non-payment by tenant of their water bill. Almost all of the cities will try to play you. Then, when you say "excuse me, that's the tenant's water bill, sir, and the Florida Statutes clearly state that you may not hold me accountable for it", they'll retreat to some bullschit line like "well, I was just letting you know about it". Horseschit. You were trying to trick me into paying it. Now, GFY.

HTH.

Best Wishes,
LD

My brother is a Slumlord in Houston and owns several dozen hovels. He has similar stories. His thing is to never,ever let a tenant know his name or personal contact info. He uses a third party.

here in the Atlanta area I pay 7% of the monthly rental and one month's rent for a new contact.

well worth it to me


I also have a more expensive property that I manage myself. that one gains a bit better clientele with less worries.

I highly recommend higher $$ rental property.. much better clients.

Paying a property management company is like pissing your profits away. 10% RTI is pretty good, most of mine don't make that after taxes, insurance, and maintenance.

I have a couple of single family homes, You have to run it like a business and leave emotions aside. I use some pretty tight contracts and don't put up with BS. I have one renter that turned out to be a PITA, late on rent and complains a lot. One day late on rent and you get a 72 hour notice, 72 hours later I file eviction papers. I also inspect my properties regularly, and drive by at least once a week.

At the end of the day it's not for everyone, but I like the steady income rather than stocks. When I "retire" from my current job I'll probably flip a few houses as well as rent some units, since I enjoy it and manage to make a few bucks doing it.

If I was living four hours away from a house IMHO a property manager would be a must. That said...

We had planned to rent out our house when we had our new house built, but after looking into the costs of a property manager, and adding in annual inspections they do plus any repairs done by their repair guy I figured we'd be lucky to cover our mortgage. And that's if nothing major broke. I simply didn't want the hassles of dealing with renters, getting called at 2 am because a sink was leaking etc.

My advice, take all emotions out of the equation (it's a nice house, etc.,) and look at it as a cold hard business decision. Given the money you have tied up into the house, what will your annual return on investment be, what are your risks of loss, what are the tax implications, etc.,

For us it just didn't pencil out, if things went well we'd get some return on investment, if things didn't work out we'd be putting out big bucks and if we decided to sell it after a few years we'd get screwed on capital gains due to the amount the house had appreciated during the time we had owned it.

It took me almost 2 months but I got a lease signed today. Two year lease and the property will only be vacant 12 days after I move out. They seem like a nice family and I am glad I did it alone.

I ran the guys credit and it is 720 so he should come through with the rent. I have gone through the property carefully and done all of the preventative maintenance. If it gets to be too much I can always bring on a property manager down the road.

A friend of my wife had a nice brick house they used for a rental. A couple years ago, a tenant disappeared in the middle of the night along with every wire and copper pipe in the house. They tore the walls out to get it all out. The repair cost is so high that they've just let it sit for 2 years now.

We have a couple of properties. We use a very good PM who charges 10% and I wouldn't have it any other way. The guy has the patience of a saint. He also has a list of service people who do good work and don't charge an arm and a leg. I am trying to find another property to buy and he will manage it.

Doing it by myself and I would be in the loony bin or jail.

If you're a lessor, make sure you know your state's rental laws. If you're a lessee, make sure you know your state's rental laws.

lordy, it makes me grateful to have the renters we have


we pretty much like them all

course two are also employed by us, so knowing character beforehand certainly helped

only downside is my wife just loves the lil gal that lives next door so we're spending over 20K to give them a lil more space and another bathroom

but it ain't biz any longer, it's love for a sweet lil family

I know insanity, but life is just too danged good for me to complain about any of it.

Being in the Norfolk area be sure you rent to someone as a military officer, if the rent stops the tenants commanding officer once contacted will see the rent is paid.

A good property manager is worth their weight in gold, the monthly fee's average 6-9% of the monthly rent. I would not worry about paying real estate commissions if the tenants buy the house. Almost all renters today cannot qualify to buy a house....they are renting for a reason.

Be sure to photograph every square inch of your home to reference your property's condition before the tenants take possession. Also have a radon test and more importantly a "Mold" and "lead" test (pre 1979 home) done to avoid potential health issues to your tenants and to you for legal fee's

Buy a home warranty for $450.00 to have repairs made to the major mechanical systems. There generally is a $100.00 service charge for each service call which can be charged to the tenant, just be sure to write the service charge fee into the lease. Lastly If the tenants have pets be sure to charge an extra deposit for pets at a minimum of $500.00. If you decide not to allow pets the lease must state if pets are found in your home upon a 4-6 month inspection it is grounds for eviction.

Lastly, the income rent ratio should be held to 30% of gross monthly income and your potential tenants should have credit scores above 640 but I suggest you use a score a 700 as a minimum.

Doc

Great post, LD!

You are right, some renters are crap and so are some property managers. I rented my home for 5 yrs while I was overseas. Two separate property managers, and neither one could "manage" my property. When I took over last November I had to have a serious sit down with the tenant about communication, responsibilities, etc. I still have some struggles with her, but she is getting better. Being on this side of the Atlantic pond gives me more comfort, but I don't live close enough to truly manage the property closely. I rely on surprise visits, drive-by photos from friends, and bi- annual inspections. While I could sell and be done with it, the long term revenue potential that awaits after the mortgage payoff outweighs a one time sale.

I guess like all things involving humans, it depends on the individual.

Good tenants are few and far between. Most rent for a reason and none of the reasons are related to good decision making. I've heard every lie possible, but my favorites are, "We love to do yard work" and then there is " We can't pay the rent because we had to buy Christmas presents.

I am a property manager. The biggest advantage of a good management company is the ability to screen applicants and protect you. Fair housing rules and state tenant landlord laws are continuously evolving, a private landlord often times has no idea how to keep up with it.

I have 4 homes that I rent out and manage myself but they are all within 3 miles of my house. I couldn't do it from hours away and would have to get a manager.

The only problems I've had has been with tenants I paid a local property management company to find. They were supposed to check them out and they told me all was good but I later found out they had multiple felonies and terrible credit. They did pay rent but left a year later and the place was a mess. I screen them myself now.

There aren't any good property managers in my town so if I move I'm going to have to sell 5 houses. Most charge about 8% of rent and would be worth it if they did their job.

Bb

You did ask to see copies of their rental applications or credit reports? Nor did the worthless property management company provide them Always ask to see copies of all rental application and supporting documents.

Doc

Most property managers are more concerned about renting the property and getting a fee, than taking care of your property.

If I didn't manage my own properties and screen my own tenants, I would not be a landlord. I watch my property's, inspect them, and keep them up. My tenant's know I'm watching and don't put up with any BS. Not everyone has the personality to be a landlord, I had to learn to be a real hard nose and write tight rental contracts.