Advice on being a first time LANDLORD

[rsot]

Originally Posted by JamesNorth101

Also go and talk to the neighbours of the potential rentee if you can, they will be able to provide the best insight

Definitely do the credit check. About that neighbours part, seems kind of tough to do for some renters

[GreenBean]

For would be landlords of apartment buildings, make sure of internet access for your tenants.

Who knows some of them might use stealth.

[slapped]

Originally Posted by 123

Good point, I've only looked into residential to this point, but will do more research on the commercial route as well. Yeah I'm not worried about the funding aspect of it, more worried about the amount of time i would need from the moment i acquire the property to maintaining the renters happy. But it seems as long as I do my due diligence in the screening process and get good renters that shouldn't be a problem. Appreciate all the advice!

One you first point,,,you charge whatever the market can bear,,in other words, a 2 Bedroom Apartment in a particular area may only be worth lets say $1200-$1500 per month, and its the specific apartments certain little perks, like a "New Kitchen" or Very close to Transportation that determines exactly where in that $1200-$1500 range your specific apartments rent will land,,

As for Financing, Nowadays, for MOST normal People if you put anywhere from 15%-35% Down on a particular piece of real estate, you should be able to finance the rest, your credit Score will of course determine exactly how much you will need to put down, as well as your interest rate, ec, ect,,,this is by NO Means a Concrete formula, but a good rule of thumb for MOST potential Buyers,,,


As for a propertys price,,,that is normally determined by what is Known as the "Yearly "Rent Roll" or "projected" rent roll,,,it is then a Multiple of that "roll" typically 15-20 times, depending on where the property is located,,,that will give you a value for that piece of property.

For example if a Building is Taking in (BEFORE all Expenses) say,,,$12,000 per Year ($1,000 per Month Rent) and the area it is in other similar properties have sold at a "multiple of 17 times,,then the property that you are considering, should be priced at about $12,000 X 17 = $204,000,,,now that price can go slightly up or down depending on certain specifics, like maybe the property needs a new roof,,,in a case like that,, the price should be a little lower,,ect, ect,,

I hope this post helps you guys

[123]

Originally Posted by slapped

One you first point,,,you charge whatever the market can bear,,in other words, a 2 Bedroom Apartment in a particular area may only be worth lets say $1200-$1500 per month, and its the specific apartments certain little perks, like a "New Kitchen" or Very close to Transportation that determines exactly where in that $1200-$1500 range your specific apartments rent will land,,

As for Financing, Nowadays, for MOST normal People if you put anywhere from 15%-35% Down on a particular piece of real estate, you should be able to finance the rest, your credit Score will of course determine exactly how much you will need to put down, as well as your interest rate, ec, ect,,,this is by NO Means a Concrete formula, but a good rule of thumb for MOST potential Buyers,,,


As for a propertys price,,,that is normally determined by what is Known as the "Yearly "Rent Roll" or "projected" rent roll,,,it is then a Multiple of that "roll" typically 15-20 times, depending on where the property is located,,,that will give you a value for that piece of property.

For example if a Building is Taking in (BEFORE all Expenses) say,,,$12,000 per Year ($1,000 per Month Rent) and the area it is in other similar properties have sold at a "multiple of 17 times,,then the property that you are considering, should be priced at about $12,000 X 17 = $204,000,,,now that price can go slightly up or down depending on certain specifics, like maybe the property needs a new roof,,,in a case like that,, the price should be a little lower,,ect, ect,,

I hope this post helps you guys

As always jammed packed with good info slapped, much appreciated!

[Sandy D]

Yotano

I just thought of something else.

You said you were moving out of state. Is the property you are going to buy in the old state or going to be in the new state?

Reason I ask is if you are states away from your rental you will have to spend money going back and forth, constantly worrying about your property, the expenses and maybe hiring a property manager which is another expense.

Having rental properties in one state and living in another can sometimes be a pita.

[GreenBean]

Sandy

That thought occurred to me as well.

Wonder if any others have had a property manager for the first years of the investment?

Maybe an option too.

[123]

Just bought this book:

http://www.amazon.com/First-Time-Lan...words=landlord

Hopefully will give me a good starting foundation, if you guys know any other good books let me know, thanks!

[GreenBean]

Networking helps.

You may have associates who are land-lords.

Did you notice on that listing another book? Property Management For Dummies.

Bit of waffle but quite good.

Also noticed some of these are on kindle.... makes it easy to read

[123]

Originally Posted by Greenie

Networking helps.

You may have associates who are land-lords.

Did you notice on that listing another book? Property Management For Dummies.

Bit of waffle but quite good.

Also noticed some of these are on kindle.... makes it easy to read

Looks good just bought that one too, thanks GB! Yeah its funny my next door neighbor actually bought the house on the other side of his house a few years back, so I plan on having a convo with him next time I see him.

[GreenBean]

Another place would be your local bank....

I was lucky because I take opportunity with an established (safe) organisation to handle rental properties.

Usual do your homework
Good Luck

[rsot]

Close friend of mine now has a property manager for his 6-unit to handle the renters, screen the deadbeats, and alert him of issues.

[yotano211]

The rental property is in the old state that I live now, NV. I'm only moving to get more sales and I had a opportunity to get with work for a property management company so that I can learn first hand the in and out of the business in Tulsa. I meet a person who owns the company and I told him if I can work for him really cheap, I just want to learn.

Originally Posted by Sandy D

Yotano

I just thought of something else.

You said you were moving out of state. Is the property you are going to buy in the old state or going to be in the new state?

Reason I ask is if you are states away from your rental you will have to spend money going back and forth, constantly worrying about your property, the expenses and maybe hiring a property manager which is another expense.

Having rental properties in one state and living in another can sometimes be a pita.

[Sandy D]

Originally Posted by Greenie

Sandy

That thought occurred to me as well.

Wonder if any others have had a property manager for the first years of the investment?

Maybe an option too.

Many properties in Florida are managed by property managers.

You really have to be picky because many take the money and never do anything else.

[Sandy D]

Originally Posted by yotano211

The rental property is in the old state that I live now, NV. I'm only moving to get more sales and I had a opportunity to get with work for a property management company so that I can learn first hand the in and out of the business in Tulsa. I meet a person who owns the company and I told him if I can work for him really cheap, I just want to learn.

But if your property in Vegas and you buy it soon working for someone else wont help you.

If you buy the property and live in Tulsa Ok it will be even harder for you to hire a decent property manager because you will be states away.

You need to hire or look into one before you move or you will be spending a ton of money going back and forth.

[jeffweico]

I would just add that when you are taking applications, always ask for references from the last TWO landlords. Pay close attention to what the second one says.

I have found that a current landlord will say ANYTHING to get rid of a bad tenant. The second landlord on the list might be a bit more honest with you.

And Greenie is 100% right when she says not to rent to people you know. And don't become friends with your tenants. This is a business relationship and if you have to evict someone, it sucks if you have any feelings for them.

Also have some money saved in case of an emergency. Not just for repairs, but for evictions. Evicting someone is a HORRIBLE experience! They have stopped paying their rent, so you are out that income. Now, you have to pay an attorney to start the eviction process. It goes without saying that you will never see another dime from the tenant, so the goal becomes to get them out as quickly as possible so you can re-rent it and get some money coming in again.

Depending on where your building is located, it can take MONTHS to have a tenant evicted. You can't just go into their apartment and start taking their stuff out. You need a court order. And that takes time. Judges in many areas have some discretion in allowing the tenant extra time to stay. For example, in Cook County, Illinois, a parent can claim a sick child and get 60 more days pretty much automatically. During that time, of course, you don't get paid. Then, you have to go back to court and pray that the judge does not grant them even MORE time. In Cook, it takes up to 6 months to evict a bad tenant and these guys know the ropes. In your area, it may be better or worse.

That is why SandyD is absolutely right when she says get the first month, last month and a security deposit upfront. You want a cushion in case the deal goes south. A credit check is a must and also past landlord references. I'm not sure how much good personal references do, as their friends will say ANYTHING. If you have to take them to collections afterwards, I suppose their personal references can be called by the debt collector in an attempt to find their new location information. But for making a decision, they are - in my opinion - of limited value.

Most tenants will NOT trash the place. Just be polite and professional at all times. Even during an eviction. Let them know that you are sympathetic, but that you need the money owed to pay YOUR bills and that you are not evicting them out of meanness.

Also, please don't take from my post that all rentals end in an eviction. The vast majority do not.

[MM78]

Originally Posted by yotano211

Sure but I would need 1st, and last months rent up first.

No problem BUT IF you see Me or Jack in the following suits....don't freak out! Were just making baby formula...yeah, baby formula.

[GreenBean]

Steady there, MM78!

I did a character reference for you.

[yotano211]

Originally Posted by Sandy D

But if your property in Vegas and you buy it soon working for someone else wont help you.

If you buy the property and live in Tulsa Ok it will be even harder for you to hire a decent property manager because you will be states away.

You need to hire or look into one before you move or you will be spending a ton of money going back and forth.

My sisters boyfriend has a management company that takes care of his properties so that he doesn't have to deal with that part in his real estate business, is a agent. They are very expensive but I dont have loan payments to take care off. I will care over management when I learn some more with time and experience. I have gotten lots of good ideas on here.

[yotano211]

I have heard of this with house evictions.

Can I offer the tenants some kind of cash payment to leave if the eviction takes to long. The building that I have is 100% mine without any more loans. Just taxes and utilities when they come due.

I dont know the length of eviction notice in Vegas but I will have to find out. I am writing questions down to ask an attorney when I get some more money and questions.

Originally Posted by jeffweico

I would just add that when you are taking applications, always ask for references from the last TWO landlords. Pay close attention to what the second one says.

I have found that a current landlord will say ANYTHING to get rid of a bad tenant. The second landlord on the list might be a bit more honest with you.

And Greenie is 100% right when she says not to rent to people you know. And don't become friends with your tenants. This is a business relationship and if you have to evict someone, it sucks if you have any feelings for them.

Also have some money saved in case of an emergency. Not just for repairs, but for evictions. Evicting someone is a HORRIBLE experience! They have stopped paying their rent, so you are out that income. Now, you have to pay an attorney to start the eviction process. It goes without saying that you will never see another dime from the tenant, so the goal becomes to get them out as quickly as possible so you can re-rent it and get some money coming in again.

Depending on where your building is located, it can take MONTHS to have a tenant evicted. You can't just go into their apartment and start taking their stuff out. You need a court order. And that takes time. Judges in many areas have some discretion in allowing the tenant extra time to stay. For example, in Cook County, Illinois, a parent can claim a sick child and get 60 more days pretty much automatically. During that time, of course, you don't get paid. Then, you have to go back to court and pray that the judge does not grant them even MORE time. In Cook, it takes up to 6 months to evict a bad tenant and these guys know the ropes. In your area, it may be better or worse.

That is why SandyD is absolutely right when she says get the first month, last month and a security deposit upfront. You want a cushion in case the deal goes south. A credit check is a must and also past landlord references. I'm not sure how much good personal references do, as their friends will say ANYTHING. If you have to take them to collections afterwards, I suppose their personal references can be called by the debt collector in an attempt to find their new location information. But for making a decision, they are - in my opinion - of limited value.

Most tenants will NOT trash the place. Just be polite and professional at all times. Even during an eviction. Let them know that you are sympathetic, but that you need the money owed to pay YOUR bills and that you are not evicting them out of meanness.

Also, please don't take from my post that all rentals end in an eviction. The vast majority do not.

[Sandy D]

Originally Posted by yotano211

My sisters boyfriend has a management company that takes care of his properties so that he doesn't have to deal with that part in his real estate business, is a agent. They are very expensive but I dont have loan payments to take care off. I will care over management when I learn some more with time and experience. I have gotten lots of good ideas on here.

Wait, your sisters boyfriend has a management company and you are us what to do? He he owns a management company then he would be on speed dial for me.

And will he manage your property while your several states away?

Also, many landlords make a huge mistake of owning property in other states and forget if something goes wrong in most cases they have to spend money to fly back and forth.

A ton of UK people own properties here in Florida and rent them out. When they hire the wrong management group they end up spending tons of money flying here and back to fix messes.

[GreenBean]

WOAH Are you smoking weed or something, Yosshi?


Your ideas are sounding like pipe dreams.

Being a landlord, hands on or otherwise is EXPENSIVE.

Think of it like this. paypal will hold your funds for 180 days. You might get them back.

Get embroiled in a tenacy dispute................... you go BANKRUPT.

Real life and tenants is not remotely like this.

I am so sorry if you think it so.

[slapped]

Originally Posted by yotano211

I have heard of this with house evictions.

Can I offer the tenants some kind of cash payment to leave,,,,,

That can Work, but it really depends on a LOT of factors,,,

An Example may be,,,what if the Tennant is in a N Y C RENT CONTROLLED as opposed to the Rent Stabilized apartments that I Posted about earlier,,Rent Controlled Apartments are FAR, FAR worse than rent Stabilized apartments,,Now this is 4 Bedroom, PARK AVE and 64th St (In N Y C) Apartment, The Tennant has been living there since 1946, and the Apartment is Rent CONTROLLED, that apartment has a rental Value of Believe it or not about $35,000 per MONTH in 1992!!! The Tennant Believe it or Not is Paying a Rental of only $974, per MONTH,,,How Much Money do you offer a Tennant like that to Move?????-----She turned DOWN,,,,MILLIONS!!!!,,,MORE Than Once,,,



That By the Way is a 100% TRUE Story,,and to Boot that person Truly did NOT really live there,,But claimed that she did,,because she did not want to give up the Apartment,,She Lived (and Died, in Beverly Hills,,,Her name was Audrey Meadows,,,,She Played Alice in the Honeymooners TV Series,,,Jackie Gleasons (Ralph Kramden) Wife,,,,True Story