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You & Your Property Manager: Communication is Key

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In my book, I discuss the ins and outs of working with a property manager. I am of the belief that if you are truly looking to make your rental properties a viable business, having a property manager on board is crucial. Some may opt to go it alone and try to assume the tasks otherwise done by a property manager on their own. Keep in mind though, especially if you are new to real estate, this job can be time consuming and force you to expend a lot more of your resources than anticipated.

I have found my property manager to be incredibly valuable to my team. However, it didn’t necessarily start out this way. I actually had a couple of bad experiences with past property managers, and as always, I took away important lessons from such experiences. The most important one: communication is key!

Staying in the Loop with Your Property Manager

Lesson #1: Demand that you are kept apprised of everything going on with your property. When you start to give a property manager unlimited control, to the point where they just go ahead and schedule work or hire contractors without your knowledge, this is when you can certainly get in trouble. Let’s say there is a major repair required. And without interviewing at least 3 contractors your property manager—thinking they are doing the right thing—just hires someone who’s price is obviously quite high. All that will happen in this scenario is that you will become frustrated and even resentful of your property manager and the relationship will inevitably sour.

Lesson #2: Do your homework before hiring any property manager. I don’t care if they’ve overseen fifty houses. You want to know firsthand what they’re like and what type of job they will do. Talk to their past employers—even talk to past tenants. The more you find out beforehand, the smoother your eventual relationship will be.

Lesson #3: Meet regularly to review all details. This is a critical one. Setting aside a specific time whether it is once per week or every other week will ensure that you and your property manager are on the same page. Things get hectic. You live your daily life and sometimes the details might slip away from you. A good property manager is always on top of things and ideally will even prepare reports for you, illustrating any and all activity that has taken place within a given time frame.

The important thing to remember when working with a property manager is to be honest with them. If something concerns you, vocalize it. If you are frustrated in regard to something they are doing and/or not doing, tell them. They work for you; you thus need to be straightforward and direct in your communication approach.

Dealing with Tenants: Safeguarding Your Investment

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One of the most difficult parts of rental property investment may just be dealing with the tenants, or more specifically finding tenants that are decent, that take care of the property and that are timely when it comes to their rent. In my landlord experience, I have seen my share of both good and bad renters. I have been through a number of experience that I would much rather forget, and I have learned countless lessons regarding negotiating, screening, and communicating.

Today I just thought I would share a couple of tips on how to find that ideal tenant. Now, keep in mind there is no magic formula, but there are some things you can do and steps you can take to try and ensure you are getting a renter who you ultimately won’t regret having rented to in the first place.

5 Things You Need to Do When Looking for a Renter

  1. Background checks are a landlord’s best friend. Don’t think of it as invasive or offensive. Most likely you don’t know the person to whom you might be renting. You therefore need to find out as much information as you can. Be up front about it. Have them sign a release for both a background check and a credit check. If they really want the property and they have no deep dark secrets to hide, they will be happy for the chance to apply.
  2. Interviews are also incredibly important. And I highly suggest conducting more than one. Do the initial interview, get a sense of the person and/or family and then when narrowing down the list of candidates invite each back for a second interview. Ideally, you can have your property manager there as well. Two sets of eyes and ears are better than just one.
  3. Touch base with previous landlords. A person’s payment history says a lot about how they will be as tenants. Additionally, find out how they maintained the property, were they disruptive in any way, belligerent. You want to know about the good and especially the bad. Talking to their previous landlord is a great way to find out.
  4. Talk to their supervisor. If they are not self-employed then you may be able to get a sense of the person through their job supervisor. Are they conscientious about their work, do they show up on time, are there any issues that have arisen? Again, being a landlord is a little like being a detective. You need to know what type of people you are inviting into your property.
  5. Institute selection standards. Mind you, you do not want to do anything discriminatory or that can be construed as prejudice. But you can note that the tenant must have a minimum credit history of X or make a documentable income of at least Y.

Even when following all of these steps you may still end up with a bad experience now and again. It’s the nature of this industry—sometimes it just happens. The important thing though is not to let it derail your dreams. A better tenant is out there!

Are you a “People Person”?

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We’ve all heard this phrase “people person.” Essentially, it means that you’re someone who is good at interacting with others, you enjoy the social context of dealing with people and you thrive on communication. I reference this term here because in the world of real estate investing, to some extent, being a people person can be a huge asset.

Not everyone is outgoing or particularly good in social situations. You may be shy, you may be something of an introvert, but if you’re going to become an investor, you need to come out of that shell. There are numerous occasion within the realm of real estate in which you need to prove yourself adept at dealing with others. In my book for instance, I spend quite a bit of time detailing what I call a power team. This is a team of professionals and experts that you gather around you in order to help you navigate the investment landscape. From lawyers, to home inspectors, to real estate agents, this team will become your core.

Now, as far as interacting with them, being good with people and understanding how to effectively communicate and exchange valuable ideas will be key where your team dynamic is concerned. I for one hold regular lunches with my team members. I take the time to find out about their endeavors, to get their insights regarding my own venture and to express my appreciation for the value they bring. In this context, I have to be a people person, I have to make the effort to be friendly and approachable and to ask relevant questions. I must be able to engage.

Being a people person is important in other facets of this business as well, not solely in this power team dynamic. Think about the tenant/landlord relationship. In some ways, a good relationship will be based upon your ability to transform into a tactful, patient and still forthright “people person.” There may be problems that arise; it’s in your capacity to talk through them, to negotiate, and to execute a meaningful solution that keeps problems from turning into disasters. If you simply keep to yourself and ignore that there is an issue, the tenant/landlord relationship can get very sour very quickly.

Also, what about your interaction with your property manager. This relationship is central to your investing business. And yet, if you fail to handle it professionally and personably it will just become another problem that got the better of you.

I wanted to discuss this topic because when venturing into real estate it’s not just about contracts and transactions, or leases and rents. If in fact you want to become an investor and ultimately succeed at it, you need to understand the type of temperament it takes. What kind of a person are you? Are you outgoing and people savvy enough to handle the many interactions and communications necessary? Are these skills that you may need to work on? Be honest with yourself, assess your strengths, see if in fact you are the type of investor who can smoothly and easily engage with a variety of people. Because being a “people person” is a must in the world of real estate investing.

Why Write a Book on Real Estate?

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For the past ten years, I have been deeply engaged in my real estate investing career. An IT professional by trade, I always knew that my true passion lay with real estate. After all, my family and I sometimes spend our weekends visiting open houses (for fun!). I simply can’t get enough—the transactions, the inspections, the excitement that comes with that final closing. This energy level and enthusiasm is what ultimately led me to begin my real estate investment career—that, and of course, my desire to provide a stable retirement for my wife and myself.
I want us to be able to relax in our retirement years, to not have to fret over money or the lack thereof. And so with my “10 House Strategy,” I began on this wonderfully wild adventure called real estate investing. Starting with one rental property, yes, there were a couple of bumps, a small hiccup or two along the way, but ultimately, I was adrenalized by the whole thing. I couldn’t wait to invest in another. Even if a problem or two crept up, I was undeterred, because I knew that this arena, this industry was exactly where I belonged—this is where my heart was.
The houses grew in number, the tenants kept coming, and for the most part, they were amazing tenants. I was successful at this endeavor and what’s more, I was inspired as a result of all of this, to help others grow successful in terms of their own real estate investment business as well. This then led me to mentoring. People came to me for two primary reasons: 1) I had hands-on experience, and increasingly more and more with each year as I added homes to my portfolio. This is what budding investors want, they want to know that you’ve been there—that you’ve walked the walk and not just talked the talk. 2) I gave everyone with whom I consulted unbiased, and to-the-point advice. If I made a mistake, I will tell you and then help you to not make the same one. If something works really well for me, I will certainly let you in on the “secret.” This wasn’t some marketing ploy or get-rich-quick scheme for me; it was simply sharing what I loved to do and my experiences therein, with the people I mentored. As that gathered momentum, I felt in my heart and in my soul that the next step was to write book about these experiences, about what I think you need to do as you invest in real estate, and about some of the downfalls and victories that you can expect. This book truly comes from deep inside—my brain and my heart. It comes from my mind in as much as I want to give you wise strategies and show you the things you need to know as you undertake your own real estate career. And it comes from my heart, because this is an expression of one of the things I genuinely love doing. Despite the hurdles, my heart always tells me to get up, dust myself off and keep on going!