All Forum Posts by: Glen Wiley

Call a few landscapers and get an estimate.

"Landlording on Autopilot" transformed my SFH long term rental portfolio. Down to earth, practical, written by a policeman who gradually moved into real estate.

apartments.com for rent collection for SFH is simple, free and reliable - I have used it for years (was on cozy before they were bought by apartments.com). I also use zillow to collect rent - works fine and is also free.

This is how you get wealthy. Rent that thing out and watch the rents increase year over year. A few years in the future you may want to cash out refi then invest in ANOTHER rental. This leads to profound returns on your original capital investment.

It is unlikely that a background check on an undocumented alien would work. Further, if the INS decides to enforce then you lose a renter.

I have rented to undocumented members of household but I require someone who IS legal to be living there and on the lease.

Another perspective is that they might be really behaved since they don't want to attract attention to themselves. Some of the hardest working and reliable tenants I have had included undocumented members of household. They worked steady all through the pandemic because they WANT to be here.

Talk to a real CPA who knows real estate.

A vacation rental is taxed differently than a long term rental. For the vacation rental you must meet participation criteria. For the long term rental you must be a real estate professional to take losses from passive investments against your active income (IRS label that just needs 750 hrs/year or more of real estate activity to qualify). My wife is the REP for us since one other test is that you can't spend more hours on your active job than on the real estate (full time employment is 2000 hrs / year).

You should feel good about the deal. Very few of us hit home runs on our first few deals.

Read "Landlording on AUtopilot" - excellent book for folks getting started.

I wouldn't be concerned about letting them know you are the landlord - good communication with tenants is a key part of successful operations. I DO agree though that you do not want any kind of relationship with them. Keep it professional and business-like.

Be firm on lease terms, be formal, do it all by the book and be prepared to evict, charge late fees etc. Remember - this is a business not a charity. Give your charity to your church not your tenants.

If you reject then you must use the same criteria for ALL applicants. Publish your criteria and stick to those criteria. This is important to avoid equal opportunity housing violations.

I see a lot of talk about the importance of hiring a property manager (PM) rather than self managing. For 20 years I have managed my own properties so I wanted to offer some thoughts on the advantages of self managing.

midnight maintenance calls for self managed are mostly a myth

Via a well written lease and open communication with my tenants I let them know that they are responsible for things like plugged toilets, leaks under sinks etc. I tell them up front that while I am happy to address non-structural maintenance, I will charge $120 plus $120 per hour if they need me to come fix anything. I handle the homes primary mechanical systems and structure, they handle the small stuff. This has resulted in me having exactly 1 after hours call in 20 years (the hot water heater burst).

tenant selection is way better as a self manager

No one cares more and no one has more to loose from who is in my properties than I do. I make a purposeful effort to carefully vet applicants and as a result we average close to 1% vacancy over the portfolio. Engage with people as a human being, apply what you know about humans to your vetting, use the great tools available for background checks etc and you will do at least as well as a PM.

personally rewarding

I love the connection to the people in my homes, I get to see how I am helping these families grow. I don't get all chummy, we aren't "friends" but I do get to know enough about them that I derive a lot of personal satisfaction from what I provide for them. One of the reasons that I love rental real estate is that I am doing genuine good for people and getting paid for it. I rent at market competitive rates and I am very firm on payment on time and upkeep of the property by my tenants.

I KNOW my properties

By taking responsibility for my properties, I know what's going on with them. I have a good feel for upcoming major maintenance items, ways to tweak things to make them better in the next turnover etc. This is an important aspect of maximizing cash flow long term.

What does a PM do for me exactly?

Over the years I have thought carefully about whether to hire a PM but it keeps coming back to the key question: What do I get for 10% of my rent? Is it worth that much money? And the answer for me is always "no." I am not saying they don't make things a little easier, I am sure they do, but is it worth $200/month on a $2000 rental? Not to me.

I spend so little time in a typical month on rental management that I just can't see it being worth the money.

Is the remodel of the SFH truly necessary or does it cash flow already?

The reason I ask is that you may want to also consider purchasing another SFH in 2024 or at least be in a position to watch for deals. Do the math on how to get the most out of the dollars you would spend in each scenario.

Construction and renovation have a lot of potential variables and unforeseen expenses. One of my principles is "if it isn't broken, don't fix it" A key to sustained, maximal cash flow is remembering that we operate rentals and the standard should be "safe, clean and good enough". It is easy to over renovate or upgrade to the point of diminishing returns.

New construction is rarely less trouble to maintain than an existing home that is in average condition. It seems like it should be but there are always break in periods for the various systems and mistakes that subs made in each of their areas that need to be addressed.