All Forum Posts by: Kevin M.

I quit my job after 5 doors of my own to start a property management company. I had a nice transition of some contract work while I built the foundation of the property management company, but was able to transition to full-time management at around 35 units under management (5 owned), since at that time I had enough cash flow to meet expenses.

At 50 units (no employees only contractors at this point) is where I really felt comfortable with income. Looking forward to expanding to 100 units in the near future and hiring an employee. Funny that most investors are looking to do the exact opposite (expand ownership and outsource management) while I continue to limit ownership and take on management. It's a difficult line of work but I'm enjoying the freedom of entrepreneurship and satisfaction of building scalable management processes. 

Airbnb desirability is usually directly correlated to rent price in the neighborhood. I have seen some great efficient airbnb setups in center city and fairmount. There are a few things that can make your listing stand-out; parking (many airbnbers drive into the city), desk/workspace, city views. From my experience these perks really helped with rentability.

Just remember how difficult zoning and regulatory forces can be. It's still kind of the 'wild west' with Airbnb in the city. I would guess 95% of online listings are not properly zoned. Probably one neighbor phone call away from L&I shutting things down. Also a lot of homeowners insurance will not allow short-term rentals. Make sure you check into the full legal/risk management side of things before diving in. 

I have really not heard any great stories of investors with home warranties. I think like @David Vitarelli mentioned its more insurance than a maintenance solution. 

Remember- you can't just pass off your maintenance responsibilities as an owner onto the tenants by saying 'deal with the warranty people'. You still have legal obligations to provide a property in accordance with local maintenance code. 

Although this ship has probably sailed- a lot of new construction comes with a 1-2 year warranty. Your builders should have come and taken care of issues arising shortly after their work. Maybe reach out and see if they're willing to make things right?

Shop around other property manager websites in town and look at their rates (if listed). I personally think its a red flag if a manager has very low monthly fees but higher maintenance costs. This just incentivizes (even subconsciously) a manager to enjoy maintenance problems. Wouldn't you rather a manager make money off your rental income with you? and really only 'break even' on the maintenance side of things? Seems like your interests would be more aligned this way. Just my (biased) opinion. 

Bigger Pocketers,

Looking to start a discussion on the best ways to market single room rentals. We have a few buildings that are legally zoned as rooming houses but having trouble with the quality of leads coming in for potential tenants. Since the Zillow family (Zillow, Trulia, Hotpads) does not allow single room listings, we currently market these units through;

• Zumper
• Facebook Marketplace
• Craigslist
• Rentler
• Off-Campus University Partners

We get a fair amount of leads but they're very low quality. Despite the bold THIS IS A SHARED LIVING SITUATION disclaimer at the start of every advertisement, a lot of potential tenants still think it's a private apartment. We have to wade through hundreds of low-quality leads. Very time-consuming.

Does anyone have tips for getting quality room rental tenants? Any good marketing channels that work in Philadelphia? 

There is no real logical system in place for assessment values in Philadelphia. I will generally say for a property like the one you're describing- you will probably find the assessed value to be dramatically lower than the purchase price for a few years, maybe longer. So I would guess you only see a modest increase after 2022. The city doesn't seem to catch on to rehab value very quickly. Take a look at the public records for other rehabbed properties in your area. You will probably find them to be lower than sales price.

This can of course change at any time if Philly undergoes a change in their assessment process, which is frankly overdue. 

@JD Martin I see your point and I think it's clear that (to this point) the Great Depression was significantly worse for owners from an economic standpoint, but I think the 'eviction' question is still relevant. Although it may be a worse time to try to rent a unit- how about getting rid of a non-paying tenant? Would it take 10 months for an owner in the 1930s to eject a non-paying tenant from his/her property? The point I'm making is actually regaining possession of rightfully owned property in response to tenant breach. I imagine investors would rather have an empty unit than a unit occupied by tenants forced to pay their utilities, fix appliances, deal with wear and tear.

I agree with your point. I also predict a shift of investor funds outside of cities into surrounding communities that may have faster eviction times.

Those who have been in the industry for a few decades, or are familiar with US history- is this the worst time in U.S. history to have a non-paying tenant?

On a national scale, has HUD or the CDC ever taken such drastic action to limit residential evictions?

On a local scale- I know many major cities are going above and beyond the federal limits. Has there ever been a more dramatic effort by local authorities to prevent eviction?

Aside from the legislative efforts at the federal, state, and local level- eviction courts themselves are backlogged many months in major cities. On top of all of this, I know of a few cities that have tightened penalties for self-help evictions (turning off utilities, changing locks, etc). 

Is it fair to say this is the worst time to evict a tenant in US history?

Also- one of the biggest uninsurable risks to a landlord is having a non-paying tenant. When risk increases, required return increases for a rational investor. What will increased eviction risk do to the market?

@Ariella Sherman I’m overall happy with them. A great user-friendly software. Please send me a DM if you want to talk more details but the software is great for a handful of units 

I have dealt with L&I for a few different violation issues (structural, use, etc.) I do know that they are TYPICALLY willing to be flexible if you have a detailed plan in place to address the deficiency.

If I were you I would call the local office with the case number. Explain that you're a potential buyer and you have a contractor prepared to draw the appropriate permits to do the repairs- but you want to ensure you have reasonable time to do so (so you're not slammed with the fines). Write down EVERYTHING. Send an email 2 min after the conversation detailing whatever you were promised on the phone and by whom. A verbal promise means little if the case gets bumped to court. Written documentation will help.

L&I cares much more about things getting fixed than the fines and 30 days here/there. I would guess you could navigate that without much issue if you really stay on top of it & your GC does what's necessary.

I'm unsure about lender appetite or any other fire-related requirements.

@Liliya Patton I think Temple is one of the more difficult micro-markets in Philly right now. There is a two-way squeeze from the smaller student population in the area due to COVID and the abundance of new high-rise buildings in the area aggressively trying to fill vacancies. 

Go on Zillow and put in a couple filters (3BR/2BA) and search for all rentals in Philly. You can visually see all of the available units in the greater Temple area. Vacancy is a problem right now. 

We rent units all over Philadelphia and I really think Temple is one of the more difficult neighborhoods currently.  Will things lighten up in a year or two? Your guess is as good as mine.