All Forum Posts by: Greg Weik

I agree with the other comments.  Never go to a property to deal with a dispute.  Landlords can get shot in these situations, and you're not a babysitter. 

Related, don't ever go to a property to pick up rent, either. 

Being a landlord is potentially dangerous - never put yourself in harm's way if it can be avoided. 

The real question here is "what does your lease say" with regards to trash cans?  What about payment for trash pick up?  This would be the starting point to resolve this, and in future leases (if your lease is silent on this element) you will likely make sure this is clearly addressed!  

Good luck, sorry you're dealing with drama on your new rental properties.  It usually doesn't go this way.  :) 

@Travis Oakes, one of my employees at my property management company has done exactly this, the house hack. He bought his first home pretty young (23 maybe?) and immediately started renting out the rooms.  

Lucky for him, he works at our company and understands the need for clear policy and procedure and getting everything in writing. 

My advice is to require rent to be paid online - or Venmo - and to not accept paper money.  Create an introductory letter that's friendly but firm.  Let people know this is a business for you and that you have to hold everyone to their written agreements, no matter what. 

Collect security deposits.  This part cannot be overstated.  

Determine how you're going to address damage to common areas.  Determine how you're going to track ordinary wear and tear in the non-common area they are renting. 

I suggest covering utilities; there will never be an even split.  Keep it simple. 

Good luck!  My employee has had a lot of success with this and made some new friends.  

As other posters have stated, always be honest and transparent.  None of this "I'm the property manager" BS.  It's your house and you're offsetting your ownership costs while providing a place to live.  No need to hide that.  

Last thing, your lease.  You have to decide if you want to commit to 12 months with people that you're living with (who you may end up severely disliking) or starting everyone off on a m2m (which I recommend.)  

Hi @David To, have you read your PMA (Property Management Agreement) to see if it specifically states this is allowed?  Usually, a PMA pertains to a single property and the PMA will say whether or not the PM company can charge fees when rent is not being paid. 

Normally, a PMA will state that the management fee is calculated as a flat fee on "rent collected" or a percentage of rent collected. 

@Account Closed, honestly that's kind of BS on your part.  Kicking a client while they're down.  Just because you can do something, doesn't mean you should.  You know full well that the $125 or so is going to mean a lot more to the client (who still has a mortgage and possibly repairs and turnover to worry about) than it means to your company.  

We have a couple of tenants who also have not paid since about mid-summer, but we are working hand-in-hand with those clients to help them get through this storm.  We are not charging them. 

I would discourage self-management, even if you lived next door to your rental, unless you have that very specific skill set and you're willing to commit to it as a job.  

I wrote a short article on the topic not too long ago that covers some aspects you may not have thought of - https://resrents.com/5-reasons... 

Finding a great PM company can be hard, but not impossible.  You've gotta ask the right questions to find out how they operate and how they will manage your investment. 

As a general rule, collections debt and low credit scores generally, post more of a bankruptcy risk than an eviction risk. 

Commonly, landlords look at collections and worry about rent payments.  15 years in property management and I can tell you that's not the real concern, it's the bankruptcy, and here's why. 

If your tenant files for bankruptcy, they can list the lease under their list of debts.  This means that you, as the landlord (a creditor) cannot make any efforts to collect on this debt while the BK process is unfolding - including filing an eviction.  If you violate this, I believe the fine is in the order of $10,000

So in the event you have a tenant who files for BK, you will need an attorney to file a motion called a lift of stay.  This is an attempt to remove the lease from the list of debts the tenant has filed with BK court.  If granted (weeks, probably $500-$1,000), you can then re-initiate the eviction process. 

Long story short, your best bet is to collect a larger security deposit if credit is not great - but even that depends on the context of the property, i.e., how much interest is it getting, how likely are you to find a better applicant, etc.  

We look at medical collection debt differently than rental collection debt, for obvious reasons.  Most people prioritize paying their rent, and I see thousands of medical collections come up on credit scores every year.  

Hi @Matt Sullivan, phew, that's a lot to unpack!

I have to ask "are you sure?"  Before going further.  Is there another PM company that might be able to offer pricing more in line with what you need to be more profitable?  That could potentially save you an enormous headache. 80 doors is a lot of doors to manage on your own. 

If you insist, I would not use Buildium, but use Propertyware (both owned by Real Page) - Propertyware is more robust and more customizable.  

1) Your transition plan has to have a checklist for each door.  You have to get the tenant's information, their payment history, any relevant lease notes, repair history on the door including open work orders, all into your management software.  You need to enter that data 1 door at a time into your new system. 

2) Make sure to coordinate the transition with your current PM, right after rents are paid.  The data entry part will take longer than you might imagine.  I suggest with 80 doors, making sure you have 2 escrow accounts, 1 for security deposits and 1 for the draws to yourself or the entity that owns the doors.  Your property management software will make this easier, but you will need to do monthly reconciliations to make sure the numbers match (I strongly encourage outsourcing this part.) 

Make sure you have the security deposits from your current PMC that match up with your leases.  This should be part of step 1, your spreadsheet should have a column for this number so it can easily be added. 

Make sure you get the contact information for any vendors doing/have done work on your 80 doors; particularly any ongoing maintenance, so you can enter those vendors into your new system.  

Make sure your current PMC notifies tenants of the transition of their security deposit and of the management of the units. Make sure the PMC gives out the number/email you want to be fielding calls/emails from.  Highly suggest a dedicated line and email address.  

After the current PMC notifies the tenants of the transition, you will notify them of the transition.  This is where I would suggest making sure you have up-to-date contact information for all your tenants; and if possible, get all of them to pay rent online via the tenant portal (most software has this functionality.) 

Last, pay attention to lease end dates.  You need a process to make sure you're not letting all the doors slide to m2m.  If you use a software like Propertyware, it's easy to run reports monthly with leases coming up for expiration, and then to track where you are on the renewal/non-renewal process.  It would be terrible to do all this work to save money, only to lose it on vacancies that sit on the market.  Good luck! 

@Caleb VanTimmeren If the tenants have good payment history, I would sign them for a 12-month term, pending a walkthrough inspection.  It's all about stability, IMO. 

Something to consider - I'm not sure how things are being handled with the pandemic in MI, but here in CO, it's impossible to evict anyone for non-payment of rent until the end of the year (at least.)  So part of your strategy might be to tread lightly if MI has any kind of similar moratorium on evictions (I believe the CDC hardship order is a nationwide consideration, but I'm not sure how MI is implementing this.)  If there are units with larger security deposits in place, that would factor into my strategy. 

@Kinjal Patel, I do think home warranty policies are generally a scam.  It's like all insurance; their goal is to not pay out claims unless they are absolutely forced to. 

I own a property management company, and a few of our clients do have home warranty policies.  The bottom line is that all these HW companies are doing, is the same thing we do as a property management company - they send out vendors to address the issues.  The problem is, most of the vendors the HW company finds are the sketchiest, least reliable vendors out there.  On top of that, the HW company is heavily incentivized to deny the claim if they possibly can. 

There's one HW company here in the Denver area that is pretty good - Blue Ribbon Home Warranty, but I think they might be local.  The big guys, like American Home Shield are, in my professional opinion, completely worthless.  They're so bad, I had to change our Property Management Agreement to let clients know that we will not sit on hold with their HW company for 30 minutes and we won't chase them to show up for repairs. 

Sorry you had a bad experience, but my experience over 15 years in property management has been that the HW company is generally not worth paying for.  Best of luck. 

@Caleb VanTimmeren I agree with @Will Gaston, and I would suggest moving on the slower side.  You're actually very lucky to have 14 m2m leases in place! 

If you have a payment history on each of the doors, I would start there.  Take the m2m tenants who are late the most/most often and come up with a game plan for those doors first.  If you're sure that they are under market, you could start by offering a 12-month extension at the market rate.  Just be really careful about what is called "retaliatory landlording" - in other words, you need to make sure you have documentation available in terms of the market rate. 

I'd start with 3 or 4 doors and offer market-rate 12-month extensions to start building some stability on the building.  If any of those 3-4 doors move-out, you've got to have contractors ready to go in and tackle your projects on day 1.  It kills me to see units sit empty because of the renovation time frame.  

Take it a few doors at a time, build stability, and improve the building and grounds.  Then flip it :) 

I checked out the link and it looks like a pretty decent software as a service for a DIY landlord.  

Interested to hear your feedback once you're underway with the software. 

I've been in property management for about 15 years, and have used a few software applications in that time.  Sometimes, you don't realize the bottlenecks and shortcomings of software until you are in way too deep.  Making a switch from one provider to another can be a real bear.  Even with 17 doors.  Every lease, all the notes, all the maintenance history, it's a lot!  

Measure twice, cut once, as they say. 

We currently use Propertyware and generally, love it.  Extremely customizable and generally good customer service. 

I'm curious as to why with possibly 17 doors soon under your personal management, why you would not enlist the services of a professional company to help you?