12-07-07, 02:21 AM
I have recently begun toying with the idea of introducing myself to property management. I've always liked the idea of it, owning houses, trailers, condos and having tenants. I realize there is probably a lot of bullshit I'm not thinking of that is terribly annoying and miserable to deal with (finding the right tenants, making sure someone doesn't start a grow-op, partyers, etc). Plus there is the large initial investment. If anyone has any good resources or advice to offer I would appreciate it. :)
12-07-07, 02:28 AM
Don't do it unless you have #1..lots of money...#2..lots of free time...#3..a good lawyer and #4....lots of Advil!
12-07-07, 03:10 AM
Residential property management is just like hitting yourself on the head with a hammer. When you stop it feels so good. You'll never be so disappointed in your fellow man. The nicest people can live like pigs and destroy YOUR stuff. On top of that they'll turn on you like a rat in a trap. Eating worms looks pretty good in comparison. You need to hire somebody to follow you around with a softball bat and whenever a thought like that crosses your mind have them wham you. You might want to consider the French Foreign Legion instead.
Mom does it. Pain in the rear.
12-07-07, 11:14 AM
How does it go, "you can pick your friends but you can't pick your tenants".
Unless you have high-end properties the previously mentioned concerns are real. Just watch Judge Judy sometime. With high end property, the good lawyer, contracts, agreements, etc are really helpful.
That being said, I have friends who have done it for years. If you don't have a lot of cash then it helps to be handy.
I know of two guys who do it. One is a GM retiree who owns a bunch of single family homes in Detroit (not the suburbs) and on the gulf coast of FL. Over the years, he built up a network of contractors to do all the repairs and refurbs and does an extensive background check on each tenant. His wife told me that he's had far fewer problems in Detroit than in Florida in regards to deadbeats.
The other guy owns a few houses and manages a bunch of houses for other homeowners. We rented a house once from a family on an overseas assignment and this guy was our property manager. (He lived down the street.) He did minor fixes himself and left anything major for the pros. He said that managing properties for other people minimized his cash outlay, but then he had to deal with a second set of idiots - homeowners who couldn't understand why he had to replace the 20 year old stove or washer that was working fine with the homeowner left a year ago.
Both guys realized that they weren't going to be friends with 90+% of the people they came in contact with and they needed to have a good lawyer and be on good terms with local law enforcement.
12-07-07, 01:59 PM
When the cops come knock down the door and drag out the drug dealer you show up an hour later and the vultures will have already cleaned you out. The cops will be on your ass for renting to the guy in the first palce in spite of the fact that the guy was the only tenant in the building that payed the rent on time. Next comes the guy that kills himself while masturbating with a garbage bag over his head and sniffing nitrous oxide fom whipped cream cans. He isn't found until he gets ripe and the neighbors complain about the stink. Then there's the guy that steps out into the hallway to get the community vacuum cleaner while he's got no clothes on and locks himself out. After he bangs on a few doors and scares the shit out of a old lady the cops call you to let him back in. The heating oil for the building runs out at 3:00AM in -50F weather because your accountant forgot to transfer the account to the new vendor so you're trying to find somebody to make a delivery in the middle of the night before the pipes freeze up. The fire department makes an inspecton and hits you with a list of problems a mile long that wipes out every nickel of profit you made over the last year. A tenant overflows the tub, the ceiling falls down in two apartments below, and the flooring humps up about a foot. You get to foot the bill for hotel rooms until you can make the place livable again. There are a million ways to make better money without all the headaches.
12-07-07, 09:00 PM
As the ex owner of a few apartment complexes, most recently a 28 unit and a 16 unit (both sold) and a 32 unit that I now co-own with someone as well as several smaller residential homes that I rented then sold I can tell you that it isn't for the faint of heart. The stories I could tell. I've dealt with them all from drug dealers to prostitutes to the occassional "proper tenant". You never know who you are renting to. Many times drug dealers find someone with a good backround to rent and then move on in. I sold my Florida properties back in '04-'05 when the market was booming in Florida (glad I did) and never looked back nor did I try to buy anymore cause of the high prices (except for a condo I tried to flip and lost like $70k on). It really was a full time job managing them myself, the one I have left is being handled by property management. If you carry a big mortgage then IMO you must handle the property yourself, if you are handy and can do the work yourself (i.e. small repairs and basic renovations) you are doing good too. When buying, my general rule of thumb is to not pay more for the property than 5-6 times the gross rent for the year. So if a house rents for $750/month that is $9k per year so times that by 6 which comes out to $54k and that is the most I will pay assuming its in decent shape. If it needs a lot of work I'd pay $45k for that property. Buying cash flowing properties in FL has been next to impossible over the last few years but I'm seeing $50k houses back on the market so I will line up a few and start over soon. I am a glutton for punishment. ;)
12-07-07, 09:13 PM
It's a young man's game because your full nights of sleep are long gone. You'll never believe how many people will be trying to steal from you. You can't imagine what an old couple on retirement can do to an apartment. Women are way worse than men when it comes to living like a pig. Nurses are the worst. If you go into an apartment and everything is on the floor you can bet your last dollar there are drugs involved. Men who are ex-military make good tenants. The Marines may not do a lot of things but they do make men out of boys. I thought this crap was behind me and long gone but this thread has brought it all back like it happened yesterday.
12-07-07, 11:09 PM
It's a young man's game because your full nights of sleep are long gone.its a young mans game at first during the hard part (with big mortgage) but if that young man struggles and holds on to them eventually it will pay off when he is an old man. Thats my view on it.
12-07-07, 11:43 PM
It's like anything; the harder you work, the luckier you'll get.