Management Tips

Below are discussions and tips that have been shared by landlords nationwide.  Please be sure to know the applicable laws in your area as they may differ from some of the offered suggestions.

Pay Yourself!

A landlord shares something he neglected to do when he first started out, which he encourages all landlords to do:  “One thing I neglected to do during my early investing years was figure out what my time was worth. I started this game like many small- time ma and pa investors: I did everything except stuff I wasn’t licensed to do (i.e., HVAC, roofing).

  • I fixed my own toilets, sinks, etc.
  • I installed my own flooring.
  • I painted my own walls.
  • I showed each rental home in person to any and all interested parties.
  • I took calls and listened to stories that went on for 20 minutes and was told I was rude when I had to hang up.
  • I even cleaned my own rentals. Ugh!
  • I also had maxed out at 12 residential rental homes, and it was a rare week when I had one evening free to be home and do stuff with my family and friends. Saturdays I was always at rentals, fixing, installing, sweeping, etc.

In other words, I bought myself a job in addition to my regular full-time job. Looking back now, I’m not ashamed of it, but man it took me a long time to see how much that was holding me back.

I also look at my profits from those years: it was almost nothing. Because I was willing to work “for free” I often bought “deals” that weren’t good deals at all and had barely any money left over from rents after the bills were paid. I think I took home about $500 to $1,000 per month in those days. That was scant pay for so much work!

Then I heard the following sage advice: “Take the tools out of the truck” and it changed my life. Since then, our total number of rentals has more than quadrupled and expanded into commercial renting as well.

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My take home pay in 2021 exceeded my pay from my regular job. I never could have done this and kept up with all of it, had I maintained my old DIY (Do It Yourself) system.

This same landlord went on to ask you and other landlords the following thought-provoking questions because he wants to challenge you pay yourself first:

  • Do you pay yourself for the work you do at your rental homes?
  • Do you feel that you’re making enough profit to justify the hours you put in?
  • If you were to hire someone to do your tasks for you, would the amount of pay you take for yourself be enough to cover hiring it out?

CAVEAT: In answering these questions, do not consider equity (sweat or amortization) as pay. Don’t include tax benefits either. The reason is you can’t pay a manager/maintenance man with equity or tax benefits. I’m talking exclusively cash money in the bank/wallet.”

Don’t Jump Every Time They Say Jump!

When you advertise your property for rent, of course you hope for responses. However, just because they may want to immediately see your available property does NOT mean that you have to immediately respond to every request for a viewing.  One landlord shared that she started advertising a rental on Zillow. In the ad she gave her phone number and email. She got bombarded with texts and calls. She would show the house at all times that the prospective applicants were available. Responding and doing showings in this manner took so long. And she ended up meeting crazy people.

She posed a question on our Q&A forum asking how could she safely and efficiently 

rent her house to save time and to weed through the bad applicants. Several landlords offered different methods to safely and efficiently handle inquiries. Below are six different approaches landlords take when handling inquiries so that you as the landlord do not jump every time an applicant says jump.

First Landlord Suggested Approach:

“We do not publicize our phone OR email, but direct people to our preview questions (listed on a clickable Google form). We quickly weed out those who do not qualify for a variety of reasons: income, eviction history, etc. I schedule showings on a few specific days, 15 or 20 minutes apart, and invite only the pre-qualified applicants to those showings. We use another Google form from which the pre-qualified applicants can choose a pre-set time.

We confirm that they are coming on the day of the showing via email or text. Fail to confirm and you are blacklisted. We meet with the applicants that confirm and show the rental. We talk about the way we do business, our expectations of our residents, etc., and provide a link to our application (via another Google Form). They email copies of their driver’s license and pay stubs/proof of income. We do background and credit checks. Only then do we offer a lease.”

Second Approach. Another landlady takes the following approach to handling inquiries. When I list on line, I never include a phone number. I also don’t allow Zillow, or whatever listing site to make appointments for me. Facebook allows me to email (with coded email addresses) back and forth which is nice. My best success on finding tenants is to hold an open house where everyone who wants to see the place can just show up on the specified day. I am there, people can walk through and if interested, pick up an application, which I then sort through when they are returned. I vet the returned applications and then I call the ‘chosen’ ones giving priority to the first in, first called. It’s worked well for the past 24 years. Of course, you have to dedicate a day or weekend to this and stay around and chat a lot. Sometimes there are a bunch of people all at once, and sometimes only one. Always a fun time. I provide bottled water and masks and hand sanitizer.

Third Approach: We work around our schedule while working at our rentals. You need a really good reason for me to go on my time. I ran out too many times for someone who lied on the phone about the qualifications. We do the open house as well. Facebook ad and check their profile and criminal before giving the address. No Pets means no pets – I shouldn’t see your FB with two dogs you don’t mention to me. We have also given them our number and asked to call when potential tenant is enroute. No call means I am not stopping what I am doing. We specifically put no texts – I want to hear what you will say. Write down your criteria and ask it over the phone-put it in your ad. I ran checks on people who flat out lied. I don’t feel bad taking their money. Don’t run the check UNTIL you have the money for it. I also have records of who ditched me when they should have been at a showing. Especially in today’s market – double check everything. I agree, you might have listed too low.

Fourth Approach: I also don’t list my phone number or email, I let Craigslist select a random email name and instruct the potential tenant that they must include their name and contact number in their reply and that I will NOT reply to them without it. Amazing the number of people who either don’t read the instructions or chose not to follow them. Those who don’t, do not deserve my time and get deleted. Those who follow the directions I try and call back within the same day and start my screening questions, those that pass get set up for a personal showing. By doing your due diligence early, I have found that those who are shown the property are likely to be good prospective tenants. This way I’m not spending hours on end doing open houses and having prospects badgering me about wanting the property. The process has worked well for me for over 30 years.

Fifth Approach: We’ve been using Zillow for a couple of years now and love it. We post our qualifications in our ad (income, credit, no rental judgements, non-smokers only). We schedule showings for approved Zillow applicants only. Our last listing generated 150+ inquiries and 32 applications, which resulted in us inviting 11 applicants to view and five of those showed up for open house showings scheduled on a Saturday at a time convenient for us. We don’t respond to any phone calls; it would be impossible. To the 150+ email inquiries, I respond with the Zillow listing information (copy, paste and send) because they clearly didn’t read it if they’re contacting me. So far, I haven’t received an inquiry question that wasn’t addressed in the listing. I’m amazed that even after posting the qualification criteria; we still receive applications that don’t meet the minimum income requirement (3x rent) or rental judgements are on their credit report and/or background check. I love using Zillow to pre-screen applicants. It’s so much more efficient.

Sixth Approach: I put together a virtual video and link that to the ads, this enables the potential occupants to do a virtual walk-through and I even show them the neighborhood as well as all the way through the property. Neighboring parks, schools and other attractions might be something that you want to add? I have one property that is just about three blocks from downtown, and people absolutely love that.

In my ad I actually have a number of different questions, and some of those I simply ask the people when they contact me.

  • Who will be living with you at the property?
  • Have they lived with you in the past?
  • Have either of you been evicted or convicted of any crimes?
  • For any reason – have you file bankruptcy?
  • How long do you plan to stay in the property? (Personally, I like it when they tell me the rest of their life.)
  • I always do an interior inspection of their local rental reference where they’re living now!
  • Another question is why were you moving from the current location that you’re at now?
  • What date are you looking to move?

The virtual video walk-through will stop all the stupid questions that you have to deal with. Personally, I am using options they are a unilateral contract and they can help you avoid landlord-tenant laws. Limits on your deposit and items like that can make a big difference. Not for everyone, but for some owners.

 

The tips in this column are shared by regular contributors to the popular MrLandlord.com Q&A forum, by real estate authors and by Jeffrey Taylor, [email protected]. To receive a free sample of the Mr. Landlord newsletter, call 1-800-950-2250 or visit their informative Q&A Forum at LandlordingAdvice.com, where you can ask landlording questions and seek advice of other landlords 24 hours a day.