Under Contract Dallas 5Plex- How should I handle existing tenants

[Nikki Stoddart]

Hello BP!

I am an investor from the SF Bay Area.  I am purchasing a 5plex property in Dallas, which closes tomorrow, 8/31.  I have experience with rental properties in the bay area, but this will be my first out of state investment.

I have a couple of questions for those experience with having tenants:

1) For now I plan to self-manage my units.  The only thing I'm really worried about is how to screen tenants and fill vacancies since I am out of state.  Out-of-state investors, how do you handle this?  Are there companies that you can hire just to hand off keys and show the apartments?  My leases all end at the end of January, so I have some time.  (I plan to do some remodel work in February, so would be looking for new leases to begin in March).

2) The current owners are collecting September rent, which will be credited back to me at escrow, along the the 5 security deposits.  After close, I need to introduce myself to the tenants, and I'm wondering what the best way to do this is.  In my introductory letter, I am planning to give them my address so they can send October rent.  (Currently, the owner does not accept personal checks from the tenants.  They must pay through Bill Pay/ACH transfer.  I plan to continue this).  Should I include my phone number and email address?

3) Should I buy a homeowners warranty and just have the tenants call that warranty company in case the water heater breaks, etc?  Do any Dallas area investors have luck with this strategy, or is it better to just manage maintenance and repairs myself.  Whether or not I live nearby, I would still be hiring someone to do the repairs as needed.

4) Are there any "Must Read" books on how to be a successful landlord?

I'm sure I will have a million more questions, but for now, these have been on my mind!

[Michael Delpier]

@Nikki Stoddart

1. You can use a real estate agent. Most agents both sell houses and place tenants. You would sign up with a local real estate agent, He/She will list the property on the MLS and the agents split 1 months rent. They do background checks and persent the lease, get it signed and hand over the keys.

There are also PM's that offer placement as a service. Similar to the agent.

But honestly, if I were out of town i would use a PM.

2. I would not give them my address. I have done it before, and nothing bad happened, but I have heard some bad stories.

Set up a bank account to accept rent, and another bank "trust" account to keep the security deposits. They can send electronic payments or just go to the bank and pay in person.

3. I have insurance and require my tenants to have renters insurance. This covers the renter covers the small repairs, and my insurance covers the disasters. But a toilet being clogged or the AC going out just happens. This is what maintainance  reserves are for.

4. must reads? Not really, but good to read is the Nolo press land lording books. Gives you the basics. It is California specific, but TX is not that much different. Just make sure you read the state/city specific updates every year.

Hope that helps.