Im bought my first rental..now what?

Question

I bought my first duplex in a C+ area. Im looking to self manage this first one and get my feet wet.

Tenants are already in each unit for 5 years each respectively. Rents are up to date and lease ends in August.

How do I self manage? Where do I start? I would like a system of some sort.

Lilian Chen · Answer

I bought my first rental and initially hired a (inexperienced) property manager because he's had a lot of experience being a broker and I liked him. This was a big mistake. First, he listed my home at a slightly above market rent, which discouraged many people from applying. So in return, he lowered the security deposit. This not only turned the good candidates away, but attracted people who couldn't afford to put up a decent deposit for some reason (he charged a $500 for an apartment renting at $1450).

Within one month of the tenant's move in, I got a call from the HOA saying they called the police on my tenant, found out he kept pit bulls I wasn't aware of, left trash in the hallway and received complaints from the neighbors, and was doing meth in my bathroom. Beginner's luck?

So I decided to manage it myself. I started asking people I knew and whether they had friends looking for a place to rent. Within a week or two, I was recommended my current tenant and reached out to him directly. I offered him rent at $1,300 instead and took a full month's deposit, which he had no problem putting up. I hopped on a call with him, stalked his social media, called his manager and his previous landlord, and by the time I'd met him in person I even knew in advance some of the things he was telling me.

Needless to say, he's the best tenant one can ever have. He pays me on time through Venmo each month, is friends with my neighbors (whom I'm also friends with), and is even friends with me on Instagram. I can't say this will be the case every time, but no one is going to care about your property as much as you do, and doing good due diligence beforehand is absolutely crucial. Find someone you trust, and listen to your gut when vetting potential tenants. Don't be too nice.

Christian Stoecklein · Answer

Have you closed yet?

Check your home inspection and correct any deferred maintenance. This is important to be proactive.

get online payments from Innago or cozy, etc. This will help you with a system as they have basic CRM software.

have a process for your book keeping.  Wave accounting is free and fine. Have separate bank accounts for the checking, savings and security deposits.

Automate as many payments as possible.

Good luck

Christian

David Ginn · Answer

Okay, so if you're in New York and buy an old asset, I'd tell you to sell it as quickly as you possibly can. Because that state is headed down in most of the areas in that state. So to be a buy and hold investor, and most of New York, you're in trouble, because the markets going to collapse and you're getting get hurt. So what I would tell you to do is, as soon as that tenant’s lease is up, I would put that house on the market and flip it and try to pull a profit out of it and stay away from buy and hold investing in new york city or in New York as a general rule.

Jeffrey Donis · Answer

I like @Christian Stoecklein's advice. Being organized is key! Try to establish some systems as soon as you can, so you can keep track of everything.

Good luck!

Kristina Cahill · Answer

Join an property owners association ASAP.  Learn the ropes. I'd take beginning property management classes. There is a lot to learn to keep you out of trouble.

Jack Soluyy · Answer

@Alecia Loveless I like the systems you spoke of and being organized. In my opinion I feel thats the only way to go in regards to self managing rentals.

How do you remember with all the things life throws at you to always keep conversations with tenants, notes regarding the content of the conversation, etc.

How do you not forget to take that info if they are phone calls? I would pronably try and have a paper trail for everything even of that means not too many phone calls.

Jack Soluyy · Answer

@Cynthia Hanke you dropped a few gems there, thank you!

Jack Soluyy · Answer

@Shiloh Lundahl thanks, Im actually reading that book right now lol networking is definitely key

Jack Soluyy · Answer

@Eric James thank you for your input, I definitely agree state associations have many resources that can assist in landlording

Alecia Loveless · Answer

@Jack Soluyy Try to keep everything organized. Print out all correspondence, emails etc and keep it in tenants folder. If you have a phone conversation write down date and time and who you spoke with and what was discussed and put in tenant folder. Keep everything about individual tenants in one place so you have access to it and remember you will need to keep it for maybe 2 years or possibly more after tenant moves out. I’m not sure how long as I’m a newbie. That is a good question to ask.

Personally I’m using Venmo for my tenants who want online payments. It was simple to set up. If a different tenant asked for another platform I’d consider it. I like Venmo because if you use the 1-3 day transfer feature if doesn’t charge you a fee. There’s an instant transfer to your account for a fee.

If the leases are up, sign new leases. If not make sure the old ones transferred at the closing to you. The bank or your attorney should have done this.

All the best!

Im bought my first rental..now what?

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