All Forum Posts by: BJ McKellar

@Caleb Waller

That is what I've seen as well.  The new schools will make a huge difference to the current schools that are feed by those locations.

What do I do if my tenant . . . . . throws parties and sets up an inflatable hot tub on the patio in my condo building?

Good question. Before you ask a question like this I am going to guess that you have been receiving complaints about your tenants on a pretty regular basis. The scenario that I mention above is another true story. Two young college students rented a very nice condo that we managed in a luxury building in downtown DC. Shortly after move in the complaints started rolling in from the building manager. First the tenants were improperly using the trash compactor to “see what would happen” if they threw a bike or cinder block in it and pressed the start button. Next, they were rollerblading downhill in the parking garage with their friends after drinking resulting in injuries and the need for an ambulance to haul someone away.

The condo unit owner was beside herself. She had lived in the building for several years and now her building manager and close friends in the building were complaining to her about all of the problems her tenants were causing.She hadn’t wanted to rent to college students to begin with, but since they checked all of the requirements that we had, we couldn’t not accept them based on their age as that is illegal and discriminatory.

Then the parties started, and boy did these guys know how to have a good party. Setting down at my desk a few mornings after hearing of the latest party I was treated to photos taken from the neighbor directly above our unit of the tenants skinny dipping with several friends in and around an inflatable hot tub that was set up on the patio (on the first level) of the condo building. Let me just add the following details so you can picture this scenario; the patio was surrounded by a low fence enclosure and open to the garden in the center of the building courtyard and playground. This was sort of the icing on the cake for me. There was an obvious problem, but how to go about fixing it?

Each building has certain covenants or rules and the easy part is that you don't have to be the bad guy with your tenant. You merely have to be the messenger. The HOA began levying fines against these tenants right away, the trash compactor incident was a large fine based on the fact that they broke the machine. Each new incident was a new fine. As soon as I had documentation of the hot tub we posted a 30 day notice to rid the patio of the illegal hot tub, clean up the beer bottles or vacate the premises. Fortunately, this action combined with the fines got the tenants to listen and wake up to the fact that the HOA was considering evicting them. From that point on they were model tenants in the building (at least to my knowledge) and the building manager and condo owner were resting much easier.

Bottom line: Make sure that the condo by-laws that the tenant must follow are included with your lease as an addendum. Give the tenants a copy and have them sign it, initial each page if you feel it necessary. It is important that they understand that they will be held to the standard that the building has set forth and that they will be fined for each and every little thing that they do wrong. HOA's can evict a tenant for not following the rules. I have seen it happen. (I'll save that lovely story for another day)

Try Airbnb.  It always a fun experience.  There is also a new company called spareroom.  They have great info on renting out a room.

BJ McKellar 

Real Property Management DC Metro

@Jeremy Pakalka Ya that was the risk, but who knew what would happen next if we didn't try something.  Luckily the landlord and tenants were pretty familiar with the neighbors and gave us some good in site.

So this happened at one of the properties we managed.  Have you ever dealt with anything crazy like this?

What do I do if my tenant . . . Accidentally Throws Away the Neighborhood Drug Dealers Stash Bag

You may think this one is a joke. Gosh, do I wish it was. Your next question may be, what is a stash bag? That would be a bag that you hide your drugs within. I wasn’t familiar with the term myself until this incident took place.

I had to question my sanity and personal judgment on this one, especially as I stood in line at CVS to purchase gift cards for a group of drug dealers last Christmas.

One of the apartment buildings that we manage is in a not so great part of SE DC. There is a live in caretaker of the building, an older gentleman who lives in the building for free and in exchange the organization that owns the building has him go around and clean up the yard, shovel the snow, and keep the alleys clear and free of trash.

Last year, right around Christmas time I received a call from one of the managers of the organization that owns the building telling me that they were experiencing a problem at the apartments. The neighborhood drug dealers were angry and destroying parts of the building; pulling down the fence, breaking the gate and front door and spraying graffiti everywhere. They had also threatened residents and made statements that they intended to hurt someone.

So I called the live in building manager to ask him what had happened. We’ll call him Jim. Jim told me that the week before all this started he had cleaned out the alley next door between our building and a vacant building. He believed that while throwing away the trash in the alley he had actually thrown away a stash bag containing hundreds of dollars of illicit drugs by mistake.

The CFO of the organization and myself had an emergency phone conference on what to do next. We didn’t want the drug dealers to murder Jim in retaliation and the threats and anger at the building were becoming alarmingly extreme in such a short period of time. We discussed offering cash to the drug dealers and maybe an apology card. (We would have had to make our own as I don’t think a card exists at Hallmark that reads: “Sorry we accidentally threw away all your drugs, here’s some cash, can we be friends again?”)

We worried that the cash would just immediately go back to the drug trade so decided that we would purchase a generic card and write sorry in it and purchase a few $250 gift cards to place in the card and give to the drug dealers. So, the next day I found myself at CVS purchasing a grand in gift cards to give to a bunch of drug dealers in hopes that they wouldn’t murder Jim before Christmas.

Outcome: The drug dealers were thrilled with the gift cards and agreed that it was a misunderstanding. Now, Jim no longer cleans that alley unless he lets them know first and we are all getting along again peaceably.

Just a funny story  in the life of a property manager.

We manage lots of rentals in Howard.  The schools help with getting hire rents than in other counties.  Some of our investors love the Laurel area, you get more house for your money than in Most of Ellicott City or Columbia. Depending on the location in Laurel, the schools are fantastic.  Our investors like town homes 3 bed 2.5 bath with at least 3 floors.  The 3 beds gets you a lot hire rent than a 2 bed. The 3rd floor give the tenants a couple living areas, and makes the home seem much larger.

There are lots of great townhome communities in Laurel, Columbia and Ellicott City.  

A good agent can help you run the numbers, so you are buying a cash flowing property.  If you need rental comps, feel free to let me know.

Good Luck!

What about you having ownership of the property? 

It would all depend on how much you are paying each month, how many years are left on the mortgage, and if you sold it would you make money. 

I personally would keep the asset as long as your not losing so much that you can't afford it.  I look at it like this.  Lets say it cost your $200 a month and the house is worth $200K. If your tenants pay off that house for your in the next 20 year, is it worth paying $48K for a property that is probably worth $250K or more?  I saw yes.  Obviously it would be much better if you didn't have to pay the $48K, but all in all its still a great investment.  

Just my personal opinion. These days its harder and harder to get a mortgage on an investment property. 

If I would have help on to more of the properties I owned I would be better off today.  By selling it, you stop any future appreciation and are done.  Who knows maybe the house will double in value over the next 20+ years.

Just my 2 cents.

I just finished listening to E-myth audio book, and it totally changed the way I do business. I own a property management business, and thanks to this book, I hired my 4th employee, so I can spend time buying new rentals, and working on the business not in it. I'm listening to one now that is way worse.

Landlords make sure you are registering you rentals with DCRA. If you do it in person, you can get it some in about 2 hours if all paperwork is filled out. Here is a link to a blog post about what you need to make the process easier. If you are a coloration, make sure you have registered your corporation with DC. http://realpropertymanagementdc.com/blog/item/71-washington-dc-rental-licensing-process