Looking for advice.

[Amy Kim]

Hi, I’m trying to rent my apartment in bucktown and move to another apartment. This is our first time being landlord. Can you please recommend property management who also can find the tenants for us? 

[Paul De Luca]

@Amy Kim

I recommend connecting with @Mark Ainley

[Travis Timmons]

I would normally suggest self managing, but Chicago can be a little tricky. I'd at least have some conversations with the Chicago crowd here about self managing prior to committing to a property manager. Find a meetup or two to go to as well. I started with a property manager on my first one as well and then went on my own after a year. It was far simpler and easier than I anticipated.

[Eudith Vacio]

Hey @Amy Kim, a real estate agent can help you find a tenant unless you want them to manage the property afterwards? But I agree with @Travis Timmons, it's always best to start on your own with guidance. GC Realty is a great PM company that I'm sure you will get recommended on here because many people have worked with them. 

[Michael Smythe]

@Amy Kim

Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.

If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.

So, when investing in areas they don’t really know, investors should research the different property Class submarkets.

Here’s our OPINION for the Metro Detroit market (use as a template for your target area!) that we’ve learned in our 24 years, managing almost 700 doors across the Metro Detroit area, including almost 100 S8 leases.:

Class A Properties:
Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.
Vacancy Est: Historically 10%, 5% the more recent norm.
Tenant Pool: Majority will have FICO scores of 680+, zero evictions in last 7 years.

Class B Properties:
Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.
Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.
Tenant Pool: Majority will have FICO scores of 620-680, some blemishes, but should have no evictions in last 5 years

Class C Properties:
Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation. Can try to reposition to Class B, but neighborhood may impede these efforts.
Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.
Tenant Pool: majority will have FICO scores of 560-620, many blemishes, but should have no evictions in last 2 years. Verifying last 2 years of rental history very important! Also, focus on 2 years of job/income stability.

Class D Properties:
Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciation
Vacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.
Tenant Pool: majority will have FICO scores under 560, little to no good tradelines, lots of collections & chargeoffs, recent evictions. Verifying last 2 years of rental history and income extremely important to find the “best of the worst”.

Make sure you understand the Class of properties you are looking at and the corresponding results to expect.

PM us if you’d like to discuss this logical approach in greater detail!

[Nathan Gesner]

Quote from @Amy Kim:

Hi, I’m trying to rent my apartment in bucktown and move to another apartment. This is our first time being landlord. Can you please recommend property management who also can find the tenants for us? 

I don't recommend using a real estate agent. They can find you a tenant, but they have no vested interest in finding a good one. Look for a property manager who will place a tenant and take responsibility for them over the next year, incentivizing them to find a good one.

[Amy Kim]

Thank you for advices! It’s really helpful for making decisions!

[Jonathan Klemm]

Hi @Amy Kim - In your case I would also echo @Travis Timmons & @Eudith Vacio consider self managing to start.  Look in to a platform like Hemlane, Avail, or RenRedi to collect rent, screen tenants and handle maintenance.  Hemlane will actually handle all the maintenance call as well.

Mark Ainley is great...I would also consider talking with @Ran Fridman or @Jason Marcordes who are both awesome Chicago property managers!

[Jason Marcordes]

Thanks @Jonathan Klemm!

@Amy Kim we can definitely help with that. Or as Jonathan mentioned, if you want help self managing, we can point you in the right direction as well. Feel free to reach out to @Eriel Davis or I if you need anything. 

[Eriel Davis]

@Amy Kim, yes if you have any general questions, I'm happy to help anytime!