How to mitigate risk when picking tenants?

[Oliver Jennings]

I currently live in Austin, TX. I started my education journey a few months ago, and have been looking to purchase my first rental property. Prices in Austin are pretty high, and the market is pretty hot so I thought I would start close to my hometown in Florida, which is appreciating but less competitive. 

Long distance investing has its risks, but I found a house that was listed for $80,000 with neighbors with sale histories of $130,000 and $150,000. It had a tenant that was paying rent at $750/month on no contract. The ROI on this could have been substantial. Tenant was open to signing a contract with the new owner post sale.

Since I don’t live there anymore, I asked my mom to check it out for me. I set up a Redfin tour for her. She calls me saying that the agent dissuaded her from actually completing the tour because the agent was sketched out by the neighborhood (????). My mother and her friend who works for a mortgage lender later tried to talk me out of buying the house, citing little apparent appreciation in the neighborhood and probable difficulties with tenants. 

Later today, the seller accepted an offer from someone else. 

Granted, this is my first attempt to invest in property and I don’t know much, but I was a bit pissed that I let these people ruin this deal for me. I wasn’t going to throw all my money away on a house I haven’t investigated, I just wanted to submit an option check so that I could get an inspection and ward off other offers. 

Am I being impatient? Are there other things I should be considering? I’m getting tired of waiting an want to start learning through doing, even if it costs me an expensive lesson or two along the way. 

[Corby Goade]

You need professional help. Find a reliable property manager that you can trust to properly screen your tenants and show your property. Nothing good can come of being an absentee landlord with no experience asking your mom, with no experience, to help you. I get that you want to save money, but you are stepping over dollars to pick up dimes. One of the most expensive things an investor can do is unprofessionally manage a property. It sucks your energy, time and it will absolutely drain your bank account.