Hey BP, think I did wrong?

Question

I went with a Property Management company to do my tenant placement. Should I have tried to stay the course and do so myself?

This is my first property needing to find a tenant for. I completely renovated the house over the last 3 months pretty well by myself while working my full time job. I advertised the property early before I was done to generate interest. Well it generated a ton of interest and between working my full time job, finishing the property, trying to respond to interested applicants, verify their application and then to even attempt to show the property it just became too much. I’ve read and heard to get rid of the tasks you don’t like or don’t wish to do. It’s not that I didn’t want to do this, it was more about time and providing realistic expectations and delivering for a prospective tenant. For example if I showed the property on a Tuesday and had someone that was interested and applied then worked Wednesday I wouldn’t have time at work to try and verify their information. So then if I’m off on Thursday do I schedule more showings while verifying this applicant. I just felt handing over all that it entails to list the property, show the property, verify an applicant, do a walk through, obtain a security deposit that it was worth it to hand that over for a one time fee of 75% of my first month’s rent and then take back over once the tenant is in place. Thoughts?

I should preface too with I really wanted to place my first tenant, so it’s not that I wanted to do this it just sounded more adventitious. Also I’m an RN by day, so that’s why the schedule is all over the place and not allowing for any time to do anything when at work...

Thanks for any and all feedback￼

Kenneth Garrett · Answer

@Cory Lucas

Applicant visits your property.  The application can be handed to them or have a fillable form.  I recommend a fillable form that way it’s legible.

Review the application and make sure it looks in order.  Some investors require when the application is filled out they pay for the application fee which includes the screening.  I use smart move for screening.  I review the application first and if it looks in order I proceed to the application fee and third party screening.  Smart move allows the potential tenant to pay for the application fee when they log in.  You are out of the fee.

After the screening is complete, confirm employment and previous landlord recommendations.  I use DTI as one of my requirements.  Cannot exceed 45%.

Upon selection, I send them the lease so they can review it. Upon the formal signing of the lease and key turnover, they will bring security deposit plus first months rent. Needs to be in the form of a cashiers check or money order.

Anthony Wick · Answer

@Cory Lucas. If you don't have the time to do things properly, then hiring a PM is a very smart move. The PM cost can be much less than placing a terrible tenant that doesn't pay rent and destroys your investment. Now, hopefully you vetted the PM well and didn't just hire the first company that came up on a google search.

Joe Splitrock · Answer

@Cory Lucas tenant selection is the most important thing you do in a rental property. Lots of newbies want to do this, but do a really bad job and end up with problems as a result. It requires time, experience and skill. Being an RN is a full time job that likely requires most of your attention. There is nothing wrong with outsourcing this.

Kai Van Leuven · Answer

@Cory Lucas

This is a big problem with being part-time in the business. I did it for 10+ years. Sometimes it’s better to go slow and make sure you have the “mental space and capacity” to take on the next phase. I have purposefully finished projects, waited a few days advertise them, and when I felt like I was ready put them on.

I don’t think you made a mistake. It is a process trying to learn the business.

Cory Lucas · Answer

@Alyssa Dyer thanks for the reassurance and the advice. Good stuff

Cory Lucas · Answer

@Anthony Wick well I feel as if I did! I asked him all of the questions that were in Brandon Turner’s book, I think it’s called the guide to rental property investing. (I received nothing monetarily for that plug for his book right there) LOL ￼

I also have a good friend that is very wealthy and flips properties from time to time, he has one rental through them that he allows them to manage and he spoke very highly of them! He actually referred me to them before they reached out to me and said the guy that runs it is a great guy, which I felt the same way after I met him￼. So hopefully that turns out to be the case, because I did not vet any other property management companies in the area, which there’s really only one more to which my friend spoke about them as well and said they’re very greedy and actually owe him a few thousand dollars￼. This friend is incredibly intelligent with his money. I just had a good feeling about this guy and liked what they have to offer￼

Thanks for the feedback and taking the time to comment. Much appreciated

Cory Lucas · Answer

@Joe Splitrock thanks for the kind words and those were my thoughts as well. I’ve also heard and read a lot of things in regards to doing it for the experience too...￼

Nonetheless I felt at this time it was better to go ahead and outsource it￼.

Alyssa Dyer · Answer

@Cory Lucas

Nah, I think you did great! It can be tricky.

One thing I do is hide my number from the leasing advertising so all inquiries go to my leasing email. Then I just reply to tenant inquiries 2-3 times per day. Once I do showings I have several tenants come at the same time (since so many no show).

Once you do it more it’ll get less daunting!! No shame in letting someone else step in when you’re spread thin.

Cory Lucas · Answer

@Kai Van Leuven good thoughts! I was definitely rushing to get it in the market with the cold weather setting in :-/

Thanks for the reply and taking the time to reach out

Cory Lucas · Answer

@Kenneth Garrett thanks for the reply and info! Great stuff, appreciate the time taken

Hey BP, think I did wrong?

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