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[Johnny Powers]

Hello,

Me and my wife are about to close on our first house that we will use solely to rent out. I wanted to ask about the best way / method to get a professional rental agreement put together and any advice on the tenant screening process. Like should we use the Smartmove method?

[Sam B.]

@Johnny Powers I'll go against the grain here and state that even the best PM company in Toledo rates a C+ at best.  You'll learn far more on this first rental by doing everything yourself.  You should know what goes into managing property, dealing with basic repairs, calls, etc. before you hand over to a PM.

You're a local and unless there are some other circumstances that have not been stated, you should manage this first one (and I would recommend every one after).

Also note, in Toledo, it's typical for PMs to take a full first month's rent for tenant placement and 10% monthly there after.  Your tenant is on a one year lease and if they leave after that one year, you just paid 20%+ of your gross rents to a PM.  On a property that rents for $600-850/mo, which is likely your market, this hurts bad.  After taxes (which are damn high), insurance (probably high too as your property likely isn't a recent build), repair fund, maintenance, vacancy, etc...your cash on cash will be <6%

If you're financing, you'll be breaking even at best and more probably cash flow negative.

If you really want to be hands off, maybe landholding isn't the best use of your funds.  Property management companies, especially in the Toledo market, need a lot of managing themselves.  I enjoy it, slightly, but if you're looking for a hands off ATM machine, I think you'll be disappointed.

A good game plan for you would be to pick-up a few rentals, screen and install good tenants and then hand the rent collection and 2am clogged toilets over to a PM.  You'll save on the leasing fee (that first month rent payment) as you found the tenant and you'll just have to pay the 10% of rents.

This is a single family home, yes?  In a decent neighborhood?  This shouldn't be hard to manage.  And if it is hard to manage, your local pool of PM companies won't handle it any better than yourself.

@Marcia Maynard self manages a lot and her posts (and podcast) are gold.