All Forum Posts by: John Reagan Johnson

Congratulations on starting the process of becoming an investor! Nashville is an excellent area and is growing fast. Not only the city but the suburbs. As far as investing out of state, you can do it on your own, but I personally would recommend hiring a property manager. Yes I work for a property management company, and I am not saying use us. I'm coming from the perspective of having boots on the ground in the area who have connections in case an emergency arises. In a perfect world, qualified tenant gets in, pays on time, maintenance requests never come in, and emergencies do not happen. Unfortunately we do not live in a perfect world. Being out of state has you playing from behind if something were to happen. Who do you contact? Who can you trust? What if it isn't that big of a deal, but someone is trying to make additional money off of you? It just makes a stressful situation even more stressful. Just my two cents, but you cannot go wrong with an investment in Nashville. Just remember that real estate investing is a long game and can take time to produce fruit. 

@Micah Huffman

From what you have said here, it sounds like you have your hands on a very good investment property/opportunity. My company has helped many investors in your situation hold on to an appreciating asset such as this. There are four ways you can make money in real estate:

1. Cash flow

2. Appreciation of the asset 

3. Tax breaks

4. Debt reduction

Lots of people only consider the first option. " I am not putting any money in to my pocket month over month." Oh but you are. Property values double in price about every 12 years. So holding on to the asset month over month, is building up the pay out upon the sale. Money in your pocket then. Come tax time, get with your CPA and they will advise you on the tax breaks you get owning a rental property. Money saved can be seen as money gained. Then at the very least, someone is putting a significant amount into the equity on your home, and is also paying down your mortgage. Basically, if you did this over the term of your mortgage, you would end up owning the property outright at a simnifically lower percentage. What if I told you that you could purchase this property at 20-30% of the initial price, would you take that deal? 

With this year already off and running (can you believe it’s already February?!), I wanted to highlight the four different ways you can make money in real estate:

1. Cash Flow 
- money coming in is greater than your expenses. (Interest rates and equity are key factors for cash flow)
2. Appreciation 
- real estate values double every 12 years. Over time your property value will continue to go up, which you cash out on the sale.
3. Tax Breaks
- I am not an accountant, but I recommend conversing with one to see all of the benefits to owning a rental property. Keep more of that hard earned money in your pocket.
4. Debt Reduction 
- at the very least, another human being is paying down your mortgage and increasing your equity. Yes, you may have to pay some money out of pocket over the year, but someone else has invested exponentially more over that same year. What if I told you that you could purchase your house by only paying for 20% of the property value? Would you take that deal?

If you have any questions concerning these points, do not hesitate to reach out and ask questions!

Absolutely spot on here John. Greatest financial pitfall when owning a rental property is vacancy time. Some owners are willing to miss out on thousands of dollars just for a chance at a couple extra hundred dollars. Another question I like to ask owners is "How does your property differ from the other properties? What amenities do you have that make it worth more than the comps in your area?" Trying to get them to look through a different lens! 

I am new to the real estate industry and am looking to connect and exchange business information with real estate agents in Nashville. I am a part of TNREIA and REIN, but I'm curious to hear if there are any other groups or events I can attend to make connections. Free events or groups are preferred, as I feel the connections made are more genuine, but I am open to anything. 

For my PMC's and self-managing landlords in and around Nashville, where have you found the most success when it comes to marketing your rental property? 

Exposure is the name of the game. More people see your property, the higher likely hood of securing a tenant in a quick amount of time (all things equal). The company I work for markets on multiple websites, the MLS, and by word of mouth. Obviously social media is another outlet, but what posts have you seen gain traction? I know some people use drones, others do walk throughs, and some do multiple stills of the property. I'm curious if there are any other marketing tools that have brought about success.

This is a post based off of curiosity. To all self managing landlords that switched to using a property management company, what caused you to make the switch? Was there a situation you encountered that deterred you from self managing? Were you just looking to gain your time back? Did you feel like using a property management company could help you achieve the goals you had for your investment property? 

If you have any stories that led you to switch over to a property management company, I'd love to hear them! 

The question I would ask myself would be is the $175 worth losing a tenant? Yes the tenant could have done things differently, but just as a manager is responsible for the people under them and their actions, same applies to you as the landlord. If you can afford the charge and keep the tenant happy, that would be my recommendation. Is $175 worth losing potentially thousands. 

Screening tenants is arguably the most important part to the first leg of property management. It is where you can eliminate a majority of headaches or sign yourself up for a roller coaster ride. When my company screens a tenant we use the following:

1. Credit/Rental History Check

2. Income Verification 

3. Nationwide Eviction Check

4. Employment Verification 

Something to be aware of is people forging these documents on the application. We have run in to numerous accounts of this. I would recommend going to someone that has experience in identifying photo shopped documents. 

These situations are never any fun to deal with. Hopefully you have documentation of the property before this current tenant signed a lease. From the information you provided, she seems like a prime candidate to not leave the property the way she found it, and will pitch a fit over any deductions taken out of her security deposit. My advice would be to stick to the terms in your lease and try to have as little contact with the tenant as possible during her move out. Likely that she will not be in a good headspace upon leaving, and we don't want her taking her frustrations out on your property!