Forced into the landlord world without a clue

[Jeremy Chandanais]

My family and I had to relocate across the country to keep my employment. With little time, we packed a Uhaul, threw the rest of our belongings into the pole barn and left MI. It seemed like fate, in that time our neighbors kids lease was up and they wanted to rent our home. Two months later we get a late night text stating they had moved out 2 weeks prior. Ugh! Our daughter was flying back for a visit so we had her check on house. 

Long story shortener: We had a verbal agreement (won’t do that again), they had removed property, we had locks changed, when daughter came to house to make notes one of the tenants was there removing more property after breaking in. Police were called, we have filed a 7day eviction per police request (this baffles me since they already moved and notified us). We have learned a lot the hard way from this. 

Does anyone have any suggestions as to what we should be doing now? I am financially unable to meet our rent and continue paying that mortgage. The house is now embarrassing to us, in it’s current state, for even offering it up to new renters.

[Nathan Gesner]

@Jeremy Chandanais you can stop the bleeding by doing one of two things:

1. Sell the house; or

2. Hire a professional property manager.

You admittedly don't know what you are doing and every decision you make is costing you money. If a home rents for $1,000 a month, a property manager will cost you about $100 a month or $1,200 a year. That's a lot cheaper than paying $2,000 in damages plus $800 for eviction costs, plus another $2,000 in vacancies, plus...you get the picture.

Below is my guide for finding a PM. Keep in mind that the cheapest is not the best and the most expensive may actually put more money in your pocket. The key is to screen multiple options (if possible) and find one that fits for you and your property.

You can start by going to www.narpm.org and search their directory of managers. These are professionals with additional training and a stricter code of ethics. It's no guarantee but it's a good place to start.

1. Ask how many units they manage and how much experience they have. If it's a larger organization, feel free to inquire about their different staff qualifications.

2. Review their management agreement. Make sure it explicitly explains the process for termination if you are unhappy with their services, but especially if they violate the terms of your agreement.

3. Understand the fees involved and calculate the total cost for an entire year of management so you can compare the different managers. It may sound nice to pay a 5% management fee but the extra fees can add up to be more than the other company that charges 10% with no add-on fees. Fees should be clearly stated, easy to understand, and justifiable. If you ask the manager to justify a fee and he starts hemming and hawing, move on or require them to remove the fee. Don't be afraid to negotiate!

4. Review their lease agreement and addendums. Think of all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.

5. Don't just read the lease! Ask the manager to explain their process for dealing with maintenance or problem tenants. If they are professional, they can explain this quickly and easily. If they are VERY professional, they will have their processes in writing as verification that it is enforced equally and fairly by their entire staff.

6. Ask to speak with some of their current owners and current/former tenants. You can also check their reviews online at Google, Facebook, or Yelp. Just remember: most negative reviews are written by problematic tenants. The fact they are complaining online might be an indication the property manager dealt with them properly so be sure to ask the manager for their side of the story.

I hope this basic guide helps. If you have specific questions about property management, I'll be happy to help!