OT: Advice on using property management company to rent out my home
So my wife accepted a fellowship at Michigan and we're moving back (yea!!) for a year or two and I'm trying to figure out what to do with the house that we bought in Texas.
Can anyone share their thoughts and particularly any advice on if I decide to manage the rental of the home versus using a property management company? My thought is that if I'm going to pay first month rent plus 10% then I'm giving away about $7500 annually, and I'm not sure thats worth the 'convenience' of using an outside agency.
We think that we'll probably return once the fellowship is over, but either way the house is in a great location/expanding neighborhood in a hot market and we'd at least plan to keep it as an investment property if we didn't return.
Thanks in advance and feel free to share your opinion on jorts too!
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who bought investment rentals in Michigan, having never been to Michigan. I have spent the past year dealing with evicting, selling, and maintaining these properties.
An odd thread indeed, but holy shit have I got a ton of excellent advice and perspectives that I don't think I would have gotten anywhere else. Very grateful for this community!
bunch in Florida. I manage my homes in Florida myself. I have clients here that ask the same question, I say DO IT YOURSELF. You can find leases online for free, you can post ads on Craigslist and get it rented, get first, last and secuirty always then you have enough to make sure they have enough in the game and if you do have trouble with a payment you have a cushion so while you react to eviction you still have their last and deposit. Evictions can mostly be done online. You will need a handyman, plumber and electircians phone number. I have my tenants deposit into my bank account and text ne when done, I do most of my communication with them VIA text so I have a record of what we each said and if I have to start eviction I let them know. Good luck your first year will be the worst year and you will get better and better at it.
and i whole heartedly agree that a good handyman, electrician and plumber are all you really need. you can list your rental on Craigslist, Zillow and Trulia to find tenants and conduct screenings. having tenants directly deposit into accounts set up for only that purpose is a great way to stay on top of payments at a distance. local eviction attorneys can handle evictions if needed.
6tyrone6, Where are you an agent? What areas? I'm mostly in the SFV but go all over Southern California though I just put a house in San Jose into escrow this morning.
have to get a lawyer not a management company. A "pre squatter" could just as easily be handled by a home owner as a management company. I have never dealt with a squatter, in 13 years as a Realtor. A squatter in California has to live in the house and pay property taxes for 5 years! In a normal situation, if someone broke into yoru vacant home, I am sure an owner could call the police and have the tresspasser charged with breaking and entering. My handyman is 6'6" and does great job collecting rents in Florida I am sure he could call 911 and deal with it.
I mostly work down here, but for friends and family go to LA and OC. Nice to talk to you!
What's so odd about it? It's a legit question.
Personally, I advise renting it out as a porn shoot location, to a classy porn studio. More Brazzers than Bang Bros. They want the backgrounds to look pleasant.
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I actually like this idea as I wouldn't have to worry about taking care of the yard.
I think you might still have to trim the bushes.
Rented it to a "party" turns out thtey filmed a pirate themed porn film. I don't think they knew until it came out in the movie.
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The thing is though, since you'll be out of state, if something does go wrong you won't really be in a good position to deal with it. Similarly, a management company can clean up and re-rent the property if your tenant moves out, deal with a legal situation if the tenant doesn't pay rent or something, and handle other kinds of unanticipated issues. So, if you were remaining on the same area it might make sense to operate the rental yourself--but since you will be far across the country I'd recommend using a management firm.
Unless you know someone in TX that can handle everything from a clogged toilet to a busted pipe in the middle of the night, you need to use a Prop Mgr..
And if you are sentimental about the house or plan to move back at some point, prepare yourself for the reality that renters simply don't care as much as you do. Not to say they'd trash the place, but renters tend to feel entitled because they pay rent. I've had a few investment properties over the years and have always used a Prop Mgmt Co because I travel and the last thing I need is some renter calling me at 2am ...and I have lived within a relative short distance from my properties.
If the RE market is that hot and you think the house will appreciate, I'd rent it out and prepare yourself for what you will find when you return. You may wind up re-painting/carpeting/etc but in the big picture, if the RE is appreciating, the Prop Mgr cut is just the cost of doing business.
I have many clients with rental properties that use Mgt companies. The fees usually aren't too bad in comparison to what they provide. Living far away makes it difficult to manage this on your own right? They also give you a nice clean report at year-end for your tax return prep.
Really depends on if you want the hassle of managing it from afar. Not sure what is expected of tenants in your area but having to coordinate regular upkeep and repairs when you don't have eyes on site can be challenging. Do you have good people in the area who you can trust to keep an eye on it?
The only people we know are friends we've made in the two years we've lived here, and I wouldn't really feel comfortable putting that on any of them, so no, not really.
Neighbors dog keep barking? Or a sprinkler head busted and is flooding the yard? Do you really want to deal with all of that from Michigan yourself?
Do you want to be the one having to call your tenants to pay on time?
It adds up quickly, especially if you have to make a trip down there for one-off things.
I would avoid property management companies if you could be local and pop by to take care of stuff...but man, I wouldn't from the other side of the US.
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My wife and I are using a company to rent out our home when I move to California from Oklahoma due to a military move.
It's worth the 10% rent to just have someone else take care of everything while we don't have to worry. Plus, the property management company knows who to work with and who wont rip you off.
Worst case, having to get someone evicted from your home (hopefully not), and you'd have to file paperwork based on the county your home is in. Do you want to waste a plane ticket and time having to deal with that?
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Not really a humble brag as much as the actual dollar amount is pretty significant. If it were a matter of a couple hundred dollars I wouldn't think much of it. Thanks.
Think of every annoying thing you've had to fix in a year. Now add $500 to the cost and 24 extra hours. I know people that live like 3 houses down from a rental property. First year they did it themselves, after that they let a property management company handle it.
Most decent property management companies are going to have proper contracts, do credit/simple background checks, has existing contracts for any service related needs, etc. Its well worth the money.
Mr. Furley
just what the country needs, another slum lord.
I dont even understand that term. I own 3 properties. I rent out two. They aren't slums by any means. One is actually nicer than where I live. Just because I own property I am "bad?" I don't understand that at all. I know you are being tongue in cheek due to the thread earlier this week re: "douche canoe", but I seriously don't get the whole "slum lord" thing. I own property and rent it to people who can't yet afford property or are actually looking for a no-risk living space option. That makes me horrible? OK, folks.
as a young Pat the bunny said, property is robbery.
Personally I don't give a shit if you own a bunch of properties and choose to rent them out, AS LONG AS YOU THE HOUSING YOU PROVIDE IS AFFORDABLE. Too many property owners now, don't give a shit about you, its all about those dollar $igns.
The big problem I have is the number of homes and building in the USA sitting vacant. And yet here I am paying an ungodly amount for rent.
Obviously the problem goes much deeper than just "slum lords," but that conversation is for another message board.
sorry for the rant.
buy one of those empty houses. Rent a cheaper place that isn't as nice and set the difference aside for a downpayment on your own piece of the American dream. I do not get your rant. Dude own nice houses. The term "slum lord" applies in no way whatsoever. If you don't like paying huge amounts in rent, don't. Rent something else.
What exactly is the American Dream? I've heard that term tossed around so many times in my 36 years on this planet and I still have no idea what it is. My idea of the "American Dream" for a long time wass traveling around the country, living out of a tent, and going to punk rock shows.
That dream no longer works for me. I have a family and my first child on the way.
The idea of putting myself into a HUGE amount of debt to buy a shack I can call my own doesn't work for me either.
Also I call all property owners who rent their places slum lords. Obvioulsly a lot of the time its tongue in cheek. But not always.
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If you'd care to have a discussion about the evils of the financial institutions we can do that some other place. I'd seriously love to have that conversation.
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I'm not a communist, I'm a rappist.
ignorance is
The market sets the price, not the landlord. No landlord can price his property "too high." People will simply choose another property and the landlord will lose a potential tenant.
It's actually really difficlut to make money doing this. I technically "own" the property but I dont own any of them. The bank own most of all of them. I mean when I sell them someday (once they stop making me money) I will surely be more wealthy, but it's not like I can go out and buy a 70 Chevelle SS with my sweet rental properties. I'm what they call cash poor at the moment. Each rental property is run like a small business. They have costs and their own bank accounts for book keeping. I took a small sum of money that I saved and started a ball rolling. I got lucky with the first one and that made my second one possible. I don't see anything wrong with making money. I'm not swinddling anyone. I'm taking risks, and to me, that is worth a price.
His Dudeness,
I think you're a rad dude, and you have to do whatever you can in your life to be happy. If this is what does it for you, I wish you the best.
Love,
Darker Blue
I would tell you two to get a room but you would probably go on a rant about hotel prices.
I gave you a +1 for Pat the Bunny. We are all of 2 people who know who that is and I dig his shit. Have for a few years.
Anyhow, it took me a long time to swallow hard and try to have nice things. I let my guilt get at me about the haves and the have nots and what should be done, but I realized that I am not going to change anything. It's far easier to just be a cog in this thing and know that you are well suited to at least be a successful cog. Enjoy yourself. If not for you at least for your young family. I don't even have a kid and my world significantly shrank when I chose for that to be my priority. If you want to change the world good for you and I hope you do. You have the right notions in my opinion. But like I stated, it's much easier to shrink your world and just do what is best there... Enjoy the ride.