*Also don't underestimate the power of facebook when screening tenants. I was able to weed out a bunch of potential headaches by checking out their facebook posts.*
Rental property experience My wife has owned a few rental properties for years and always rented to section 8 tenants. I always thought many headaches went with that, but she felt the nearly guaranteed monthly payments made it worthwhile. 6 years ago, I decided to jump into rental property world, and bought 3 single family homes. My wife placed section 8 families in 2 of the houses, and I decided that I would advertise the third property to general public. I got quite a response, but I had no knowledge of how to screen tenants, and I had a guy with family including newborn baby. My thought was perfect, for he certainly would not want to get evicted with young kids and have to find new place to live. He put on a show, took my for rent sign out of yard and brought it to me saying that I no longer need the sign. I have him sign rental agreement and he hands me the deposit and I hand him the key. I even go to carpet store and get a large cut of carpet to put down in living room so young child could crawl around comfortably. The cash payment that I received was the last payment that I got. So, I then seek advice on exactly how to evict. I serve eviction notice, and I go to court on hearing date, and of course tenant does not show up. I give date for vacating property and tenant complies. I had checked on property 3 weeks prior to eviction and house was intact by my visual inspection. When I checked again after tenant left, looked like his family trashed the house. As if had huge party prior to leaving and with trash everywhere including all over the new carpet that I put down for his young child. I called him on this, and he returned and cleaned up much of the mess. But, I ended up rolling up the carpet and throwing it away. My wife and I get our crew in the house and thoroughly clean up, paint walls then get section 8 to inspect and approve, then next tenant section 8, and has been in house ever since. So, my lesson was, if rent to general public, make sure you do due diligence screening potential tenants. And, for me, getting less than market price for my rental properties by renting to section 8 tenants, is worth it.
I guess I don't understand?, what's so special about renting to section 8 tenets?, how are they safer to rent to seeing they are low income 🤔 does the government guarantee any of the payments if the tenant is unable to pay??
I love that you mention "doing a disservice to society" by "training" people not to pay. I can't agree more. We all need to hold ethics and responsibility highly.
being a landlord is a job and its about customer service.the tenants rely on you as much you rely on them to pay. ive had tenants stay for 20 years with rent raises etc.. because of good service.
@@TheBrownNote420 what about the tenant who lived in the house for 20 years? Are you telling me they could not buy a home in all that time? Two sides to every story. You cant get mad at the land lord if they pay off their mortgage i the person cant help themselves and acquire a home. Hell they couldn't even get a condo or townhouse ?
When selecting a tenant always go to there house unannounced. You will be able to tell if the house is lived in or trashed. Tell them that at this time you are likely to get the home ( if you like what you see) or you have someone else and you wanted to stop by and tell them. Doing this for over 35 years and has yet to fail me.
I wouldn't go inside someone's residence. I have driven by unannounced. I noticed the yard was kept up, and had nice Halloween decorations. That sold me.
Like your postings because they are certainly about what you are ready to say to your audience, meaning: you give to as no long BS stories, bragging and fake FBs from your "devotees", and at the end we see it's was nothing said valuable... You are valuable mentor! Thank you!
Absolutely text book, spot on, down to earth on how to be a successful landlord. We have learned over several years of making mistakes to run our system almost exactly the way you describe. Choice of tenants for us is military officers near robust military bases. Hadn't thought of the nurses idea. We've only ever had to evict one person (she was non-military) and she was yelling at us so loud through the phone you could hear her in the kitchen. We just calmly told her that she could either pay the rent in full today (the end of the grace period) or the next contact would be via eviction notice from the attorney's office. She elected the latter. Its interesting, too, to see how the public notification process works, too. If her name is background searched now, she pops up right away with a public record of eviction. Serves her right for yelling at my wife. Great advice, thanks!
Love your stories, Phil. My husband passed away and he was everything. The property manager and Mr fix it all. I am disabled. So I had to get a property manager to help me. Honestly, Phil, I feel I'm managing the property manager. I feel like I know more about landlording than they do. I have tried 2 companies and both of them I feel like I'm the one teaching them new things. We were better at renting out our house. I came up with all the ideas to try to rent it in the winter. I said we should have a winter special and take $200 off the rent. I wanted to make it more appealing than the other house that is the same nearby. That bad thing about PM is you can't control Zillow. I would have put it on Zillow. But he hasn't. He is going to sign a person with lower credit. That can be good and it can be bad. I have had a loyal tenant that pays on time that had a very low credit score. But he has a great job. Sometimes people with low credit scores can be good because they don't leave because no one else will take them.
I love "you are doing a disservice to society if you don't evict people" ... it's true. It takes a certain constitution in a person to be a landlord it isn't for everyone.
My renter paid late several times, so on the next lease agreement, I added if the rent was ever late, the rent went up $50 for the rest of the lease. It worked! He hasn't been late since. :)
Screening prospective tenants is THE most important preventative measure you can take as a landlord. And when they give you their present address, drive by to see what it looks like. Sometimes you can even see the inside of their present dwelling. That gives you a good idea of how they will treat your property.
that,s a good idea, screening and good selection, if they have something to hide , will disqualify their self. Could you please recommend a good screening company? I had a bad experience with a tenant , one year ago, because I don,t know how check in their credit and criminal history.
Another awesome video, Phil! I cannot thank you enough for taking the time to make these videos. They have already helped me establish such a knowledgable foundation, & I'm still in my senior year of high school. I attribute my head start to you!
I am a part time realtor and getting ready to rent out my back house. This is a great info for me! Great presentation! I like the way you present the materials! I am following up with your other slides and learning a lot. Thumb up!
Excellent, the wife and I have been talking about getting a rental property for a while now. We just haven't made the jump yet. This video has been very helpful, thanks Phil for what you do.
I like a lot of your content, especially on tenant selection! I share a different perspective on property managers. I have seen that not hiring a property manager in many cases ends up being more expensive than having a great one in place. I agree that there are many bad companies out there, but a great one will save property owners money 10 times out of 10. Systems, procedures, education, resources, etc. Between the learning curve, time away from career (which is most DIY landlords), higher maintenance prices, and lawsuits caused by not knowing what they didn't know that can really cost them.
In Illinois they make you show up at the set out.You have to sit outside until the sheriff shows up and there is a four hour window.This is not a safe policy and needs to be changed.
You provided excellent information especially regarding the landlord - tenant section, to make sure you're in compliance! Thank you so much for your videos.
Hi Phil, Great video. I am currently active duty navy and have a property manager. I am stationed in California, and my properties are in Ga. I have a property manager because being in the military, we tend to have wacky schedules. I had to evict one tenant due to the fact that they were writing bad checks. However, I got a power of attorney and allowed the property manager to act on my behalf. After the first tenant got out. lo and behold, a charge nurse applied to my ad. You are right, nurse are really stable tenants!!
Phil you should talk about the types of people you'll be getting in a mid priced rental unit....or in other words the types of problems that are common amongst these people. I've had a few renters and it's "interesting" to interact with them on their level. I didn't know when I became a property owner that I would need a degree in psychology!
I already was not happy with the management company and now I'm sure I'm going to save some money and do it your way. Thanks, I've already learned so much from you Phil!
Phil Pustejovsky Thanks for this. It is the best advice someone starting in "property management by purchase" I've ever seen on line or read in any of the many books on this subject. I've often repeated the statement by Robert Kiyosaki that “your home is not an asset.” --- I say it goes beyond that and that it extends to your rental properties. --- The building doesn't mail you a check every month only your tenant’s do. Also I second your advice to hire an attorney who will handle the collections for you. I laugh about it because it’s more fun than crying but “representing myself” I’ve never lost in housing court and I've also never collected a penny. Again, thanks for this great video.
I do small apartment complexes. The better tenants can put some skin in the game. I collect first and last months rent there by allowing me to also reduce the deposit some what. That rule does slow down the speed in which I rent a vacancy but to me its worth it. In a small apartment community, the adjoining tenants have expressed they love my rule knowing that everybody there has something to loose if they become a problem for their neighbors. I already follow the qualification process on this video, unfortunately, I had from learn that the hard way many years ago. Phil you done a great service with what you told these people. I hope they listened.
Great video Phil and great story! I am looking heavily into getting into real estate. I am nervous but watching your videos have answered many questions that I have had. You are extremely knowledgeable and able to answer these little questions and tell it like it is! Thank you so much for what you do!
Phil,....here's why I like you...probably why many do to.... 1) you're clear in your speech and delivery 2) you're confident 3) you have good teachings in each video...not "rehashed nonsense" 4) How to "choose a tenant" is "HUGE" for many reasons; 5) You've had mentors. Someone said..."Good painters' copy and Great ones' steal. We need to keep in mind....without mentors...."we have a job" that get's us no where.
Totally learned a lot of things. You really do know what you are talking about. I am living in an Asian country & l think much of what you said rings true even here. Thank you so much!
Truly enjoy your videos Phil! I use Cozy online software to self manage my rental. Very user friendly for both the tenant and landlord. Rent payments are done electronically and best of all at no charge!
We had a property manager once and he only checked the outside of the house, which was in great shape because of the gardener. Six months later, we drove over to take a look ourselves and when we walked inside we were shocked at how DESTROYED the house was!! Worse than your worst fixer upper and it was a fairly NEW house!! I'll never trust a property manager again.
"Auto Collection Payment" What a great idea!I spoke to my existing local banker, and she was preparing a ACH Agreement and only me $10 monthly.Without watch This channel, this is never going to be happen!Thank you for your advice, Mr. Pustejovsky.
Loved your video about public records. I was able to see my landlord's properties and their values and composition. My apartment is a '2' bedroom, but public records shows it as a 1 bedroom. *There was a past improvement on the property deemed a 'covered porch' in the records. I've lived here for 15 years and would have never guessed one of the bedrooms was categorized in public records as a covered porch. Your info is helpful Phil not only for flippers, investors and landlords/ladies. I want to buy a house and now I know more about how-to research potential properties! Thank you very much.
Wonderful! And it sounds like the 2nd bedroom is not a permitted bedroom so if/when that landlord ever goes to sell the property, they most likely will not be able to advertise it as a 2 bedroom.
Getting ready to buy and either rent or flip a small house--now I know not to collect houses in different areas of the country! Most landlords say that property managers are useless though there must be exceptions. Very helpful information.
Hi Phil, just started watching your videos and its obvious your one of the few on TH-cam in this area who actually knows what they are doing. Except perhaps your view on property management. As a veteran property manager, I was cheering most of your points, especially the first. I like to think of it as a "rental cycle" that starts and ends with the tenant. Great stuff! But property management, done by true professionals is by far the more profitable way to go. There are good and bad in any industy, but in my mind a true professional makes me more money than their fee. Hence, they provide a net return. They do so in many ways, but I will give you just one for illustration. Alot of things can happen in between a once or twice a year visit. And just a "stop by" the property doesnt do it (were talking in the long run). It needs a thorough inspection, top to bottom to uncover potential damages at least every 4 months. I use a checklist to make sure I'm thorough. It's so much easier to collect damages from a tenant who is occupying the property than one who has moved out. If i find a broken window, torn screen, hole in the wall, pet damages etc I can bill the tenant promptly and most importantly -COLLECT IT within 30 days. As a side note, I usually do find damages, in even the best rentals. As a professional property manager, I know there is going to be damage, I look for it. Thats just one example, there are many more. My point is, unless your a real pro, GOOD property managers are worth their weight in gold. Of course, all this is my humble opinion. I do thoroughly enjoy your videos and your energy and enthusiasm for the business. Your a real pro. Keep it up.
The number of true professional property managers that create more wealth than they take is few and far between. You sound like one of the rare few. Keep up the great work!
Awesome videos Phil. I've been interested in slowly getting into local SF and apartment rentals and this videos feel like a good starting point. One critique is i would have mentioned that people need to make sure they can receive a loan to purchase a rental property to start off with but this video is, after all FOR LANDLORDS. Thanks again.
Very nice video, thank you. Jeez, you just put a wrench in my plans. Have lived in Massachusetts my whole life, was planning on moving to florida soon but buying rental property in MA (rent is pretty expensive). "stay close to home" just made me reconsider
Phil I have heard a lot of good information from you in other videos. This is not one of them. I was doing my own properties until I had an eviction come up. I’ve since turned over my two properties to a management company and it’s the best decision that I ever made. $180 out of $1800 is nothing. I am still cashflowing +400 and get great appreciation. I realized that I’m not retired and cannot afford to be interacting with tenants, studying the law and a host of other things. My manager does all those things and more. Getting ready to buy another property and turn it over to them. My fee will be 8% after two properties. Guys if you are planning to have a portfolio of properties and you are not retired, hire a manager.
Congratulations on finding a terrific property manager that puts your interests first. They are EXTREMELY rare in the realm of individual single family home rentals. Finding quality property management firms for larger commercial deals is fairly easy. It's finding a decent property manager at a reasonable cost for an SFR or two that is do difficult.
Phil, I love the layout. This really covers the basics for taking that step. Would love to see if you have done a video on how to handle the collection after eviction. I have been researching laws, contracts and what to advise clients on the best way to collect on the back rent, damages, broken leases, etc.... Winning the judgments is the easy part, that is once they are located and if they are in the same state the property is located. I also feel, another step should be the tenant payment history reporting to the credit bureaus (passed in 2014). I could go on, but you may already have these answers for me if I could be pointed in the right direction. Thanks, DPop
I think that I've come up with an awesome and very quick way to assess how well a prospective tenant will take care of your rental and also provide a general overview of their character. Look at their car. Is it clean or is it trashed? Everyone I know with a trashed car I would not rent to. lol
+Victoria Johnson We have to hold their items for 30 days also here in KS. But we have to take an extra step and 15 days after we get judgement and the process servers serve and lock the tenant out, we have to post an article in the local paper of your county saying that if fees not paid within 15 days of this articl, we can release your items. Its just absolutely ridiculous. All because someone cant pay me my rent.
Being 22 I’m glad I’m already almost ready to get my first rental. Just a couple bells and whistles. Financial freedom is the goal within the next 10-15 years!
Phil I wish I would have watched this video 6 years ago before I bought my first two family house! I live in Massachusetts. I bought a 2 family house 6 years ago and have great tenants and also have the same tenants throughout my 6 years. I live on the top floor and they live on the bottom. I knew them before they were my tenant. They pay me every month and they are with section 8. I will admit they pay me 99% of the time within the first 10 days. They never paid me like a month late or anything like that. This is my first time as a landlord so I'm still learning alot as I go but your video helps me out with alot of things I should know and get on the ball on. There were some basic things that I knew before being a landlord but there are a few things I didn't do just yet which is the "Prepare for eviction" part and knowing the most updated local laws. I would have to find someone thats a good eviction attorney even though I honestly don't think I need to do that with my current tenants as they are pretty good. But I want to atleast get one just in case and especially if they ever leave. The reserves part I have but I need to build it up more. I'm actually at work right now trying to google the Landlord and Tenant Act of my state. I tried putting in my county but nothing is coming up for my county but things do come up regarding regular state laws. If you have any other advice for me I'd be glad to hear it! Also do you have any other resources for landlords that I could look up ?
***** Massachusetts has some very interested tenant laws. One of my apprentices is being sued by a tenant over something frivolous right now. Get a good eviction attorney to educate you quickly. Regardless of what happened the last 6 years, things can change quickly.
Phil Pustejovsky Oh wow can you say what he's getting sued over ? I'm just curious! Yeah thats the only thing that gets me about this state is that the laws tilt more towards the tenants than to the landlord. So sometimes I ask myself since thats the case if its even worth going into the rental property business on a larger scale here in Massachusetts because of that. I will definitely see if I can find a good eviction attorney just in case. I'm also thinking about joining a Landlord Association here in Mass for more help and resources. What are your thoughts about Landlord Associations Phil ?
I had a landlord that forgot that he had me as a tenant, I called him three weeks after the rent was due (thought he would eventually come collect it) and he had forgotten, he was probably the best landlord I ever had, he never came around unless I needed something fixed (never did though) except one time he came to all of his properties to make sure everyone had airconditioners, I didn't so he gave me one. He did have some tenants that he had to evict because they were noisy and through a lot of parties.
Wow, this was harsh but maybe something we(a property management company) needed to hear. It is good to hear the other side of the argument(that people should do it themselves) and know how to anticipate their objections. Thank you for your video.
You have good advice, yes keep your rentals close.....I live just outside of Vancouver, the market is around $650k-800k for an older model home. It can not keep pace with current rental market rates around $2800 for that kind of property, property taxes are $3800 per year as well. Even though I own property in this market, to get the cash flow I am buying in markets about 5 hours away from me. When I can I am my own property manager. When I can’t I hire one after a very extensive interview process because I agree previous dealings left me paying all the hard earned profit to them with out the service one would expect
Hey, Phil! This video is timeless. It's been years since it was posted but still relevant until today. Just wanna share something to your viewers if you don't mind. As a landlord, one of your biggest concerns is to protect the investments you have made in your property. Finding good tenants that will treat your property well and pay the rent on time is important. Over the years, one of the biggest problems some landlords have encountered is having their properties seized due to civil forfeiture. It's sad that their hard earned property was put at stake just because of other's irresponsible and illegal acts. To avoid this, we advise landlords to do a background check on potential tenants before letting them rent their property. It's such a crucial and important step to ensure that the tenant has clean records.
What a MARVELOUS comment. Believe it or not, I have never heard of any landlord ever being a victim to civil forfeiture. And I have interests in hundreds of rentals across the US and accumulated thousands of individual units. Thankfully, I have never been a victim to such a terrible over-reach by the government.
@@freedom_mentor Great to know. We can all agree that that is an over-reach act, and hopefully, no landlord would ever get to experience that. We just knew via Reddit that there were cases of civil forfeiture among landlords, and hopefully that won't happen again.
I know someone who had a similar experience to the one you talked about that was a piece of land that the previous owner did not let on that the property was included in the property that had a duplex for sale. For some reason, the buyer did not do his due diligence and so his realtor did not explain that this parcel of land was part of the deal. Anyway long story short, when the buyer/owner now wants to sell the duplex and has to disclose this piece of "taxable" land goes with the duplex property. Anyway the owner took a loss in order too get rid of the duplex that included the sliver of taxable property which was good for nothing.
OMG, thanks! We once begged our landlord to set up an account for automatic payments! I knew snail mail was not the way to go with rent collection! thanks!
Setting up automatic payments does not mean you get the money automatically. It means you get the money if he has the money in his account. And you don't if he doesn't.
Although we have learned some USPS delivery areas have horrible unreliable service, for the most part they are reliable. That said, bank account to bank account direct transfers are the way to go and wording for that preference is in all our leases.
Thanks for this video. I/we wish we had checked this video (or found it) before we bought our first 5 family home. But some lessons learned the hard way and some pleasant surprises. Your first point is definitely very crucial.
I worked with several landlords an agree with almost all of them. The only one is self employed. When I rented I had a landlord who required a minimum of 3 months cash reserves knowing that construction work in western NY was tight between thanksgiving and Easter. It was handled like the security deposit. In fact I worked the same arrangement with other land lords as well.
Thank you for all that very helpful information Phil. What I would like to ad to your comprehensive reason for not taking a management agency is another fact that most landlords are not aware which is that; it is in the interest of the management agency that as many items need repair as often as possible. Why? Well the Management company will charge a 10 to 15% commission on the final charge for the item repair. Lets say a boiler that cost £700 to repair. That is at 15%, so there goes £105 for the Agent plus VAT which in the UK is 20% = another £140 Totalling £245 that the agency take from you regardless of weather they pay the VAT or not. That is not the whole story as the Management company tends to ask their workers (which is if is a large company would have) or just an engineer on a call to double the charges so a repair that is £700 could cost £1.400 and then ad their commission plus the VAT. You would have been better off buying a new boiler instead. The boiler tends to be the most expensive item but there others even more expensive like a leaking roof where you can not see the work done? Other items such as the washing machine, cooker or fridge tends to be cheaper but les reliable after repaired so the preferably thing is t0 buy a new one with a guarantee if available for two or three years. I found one year that the person who really was making any money out of my house was the management agent.
Awesome videos Phil! I can't thank you enough. Been searching for my first property for a while now and these videos are going to save my a**. Keep 'em coming! Now, do you have experience buying and renting out duplexes (or half of one)? Any tips on that?
Our company has been in rentals for ten plus years. We have been lucky about evictions and property damage. My partners believe it's because of the way I screen them. I find that the more you talk to them the more you learn and that checking out the application is very important. Evictions are no fun but it's part of the process. We also have good houses including some extras so our rent is higher, eliminating what we call " Rent Hoppers" and borderline renters.
Good stuff! I am a young Land Lord of just over 3 years. I was lucky enough to have had some good advice like this from some others in this business. I started the auto draft rent system from early on with great success. I have to say all of your points are spot on! I myself need to be more strict with #1. Choosing a good tenant. These people lie all the time. The problem I have is. Say I have an open unit. I may have 3 people who made it through the initial interview they like the place, now I have to choose. I do a free CCAP and look for judgments, past evictions and disorderly conduct convictions. (Disorderlies mean they do not play well with others) Get there job history and primarily rent to people above the poverty line. And so far have had descent results. I would like to spend money on all of them and do a credit check but at the end of the day that is pricey and all three might not qualify. Is there an affordable way to screen credit scores? Or are you going to tell me to spend the money on the front end to avoid spending more on the back end. lol. Thanks for your videos!
What really gets me about your videos is listing of the actual individuals titles and real estate language, i.e. Eviction attorney, homestead law (previous video), which gives us a starting point to research the topic and learn about it. Your base that you set forth here on you tube is a fantastic start. I can only imagine what your apprenticeship programs are like. My plan is to contact my old realtor who is also an investor and ask for him to be my mentor and see if he would go in on deals(creative deals) that I find and let him be the funds in case we need incentives for the owners to complete the deal. I figure that's a good start when you have very little to start your wealth. Hustle and research for funds,seems fair. Do you feel that would be fair?
Hi Phil, I'd like to add some points, - If the Property Management doesn't charge you while the property is vacant, they would do their best to find the tenants fast. - They have more tools for screening, but if you have done your homework, you can use other landlords experience and find the best tenants. In our company, we guarantee the tenant we place. - I agree that easy payments are a big help to avoid late payments. Thank you for the info.
I didn't know that, I know that some of them are limited to the state and are not nation wide. And I know that for some of them you have to be a licensed Broker. It's good to know how individual landlords get their credit report and background check.
Get as much information about the tenant, prior to closing, as you possibly can. Inheriting a tenant can be a real challenge. But if the deal is good enough, it can be worth the extra hassles and expenses.
Most people don't know that in most states if you are on a week to week agreement, you can boot a bad tenant/squatter in 10 days instead of the national usual of 30-90 days. Good tenants won't care if you do the weekly thing b/c they know that they won't have any problems anyway. They can pay 4 weeks in advance if they want too..squatters looove 1 year leases, and they know eviction laws in their state as well as the lawyers do b/c this is what they do for a living, they live for half of the year for free. It's also a really good option for school towns, I've got 3 universities in one of the areas I invest in. Students like the ability to pay exactly what they need to without overpaying. They can go home for the summer as well.
Hannah Elder This is a good site. it should have your states laws. www.landlordology.com/georgia-landlord-tenant-laws/ It's heavily state dependent. I do put it in my lease, similar to an agreement that is for temporary period, where a tenant's lease is up, but they need a few extra weeks or months to move. It's that, but simply permanently in place for the entire lease.
Hannah Elder I'm in GA, and in my state there is no statute for a mandatory period the landlord must give the tenant if it is a ''week to week'' lease.
Interesting. So treat it as a tenant hold over but put it in place from the beginning of the lease. I see! Do you require any notice if they want to vacate? IE I require a 30 day written notice if they want to qualify for their deposit to be returned.
Purchased a property that burned down due to a forest fire. It was left unimproved for a couple of years. It was initially cleared but still contained the foundations of the previous home. Other lots in the area were similar as well. The area was close to a popular recreational lake in a mountain community and the property was beside a creek. The city decided that they wanted to spur development in the area and recover from the bad fire that occured. The city sent out notices that all foundation work had to be removed and the property graded or they would be cleared on our behalf for a premium. In addition, due to the proximity to a creek and the age of the previous dwelling, for environmental concerns (mainly asbestos) the property would have to be cleared by a certified expert in hazardous waste removal as well be approved by the city and federal authorities. The federal concerns arise because the area was in a national forest. If that wasn't enough the city also decided to improve the community by running gas lines and sewer and of course required the owners to pay for it. With the added clearing costs, improvement costs and timeframe imposed by the city and federal authorities the property became a headache. Also, this happened the year before the housing crisis. The drop in home values made it finacially impossible to improve the lot and recoup any expenditures. The lot is unimproved to this day.
Hi Phil You are usually right on target, obviously from your knowledge and experience. But you missed the boat on the property management company. I follow you and believe in you, but! As a property manager, I usually charge 35% of the 1st month rent and 7% thereafter. I renew at 25% plus lease prep fee. I do not upcharge repairs, nor take from vendors. Nor do I reduce the quality of my services. I understand that an investor must make a return to be in the game, and I must help if at all possible. Real estate and property management are viewed as a blessing, not work! I try to share with my owners and represent them well. An investor should be just that, an investor! This should be a win-win for all parties, and a matter of trust between all parties. There is a difference, generally speaking, between an investor an a landlord. An investor is a landlord, while a landlord is not always an investor. The investor can use a manager, while a landlord is probably a person that is stuck and can not afford a manager, or a late rent payment. Thank you Phil for letting me express my views, rock on!
I read the rest...BAM! I guessed right...and, by the way, you have the cheapest rates of any single family home property management company I have ever seen in the history of this business. I hope you stay in business for a long time! Thanks so much for your comments.
Phil Pustejovsky Hi Phil Thank you so much for your time. Rather than cheap, I would prefer the word fair. As you know, much money is to be made in the field of real estate. We can make a very good living doing this. Good mangement begets the need for good Realtor services. We also represent our owners as for buying and selling. We give back part of our commission to help them go on to the next property. Again, thank you Phil and I would like more information regarding your Apprentice Program.
David Kushner Value is a better word. When you apply to my apprentice program, you'll be provided with much more information about it. Thanks for watching.
The problem is screening based on objective data such as income, evictions, credit score is not enough. You have to feel them out to see what kind of person they are. I do a lot of section 8 and I don't even answer the phone when perspective tenants call me. I have them leave a message asking them to leave their first, middle, and last name spelled out, their date of birth and gross monthly income. If they have a section 8 voucher I asked them to leave how many bedrooms the voucher is for. This is because the more bedrooms the voucher the more Section 8 will pay. This way I can run their information in the computer and pre-screen them before we even talk. Also I do an in home walk through visit of their current residence to see how they live and how they take care of their current property. I look for holes in the wall and roaches etc. If they sound ghetto on the phone I don't return their call. I've been doing this for years and how they sound on the answering machine is everything. I'm not discriminating based on race I'm discriminating based on demeanor. If they say BADROOM, BAFROOM, and BIRFDAY. I've heard enough and they are ghetto. My experience is Gays and Hispanics particularly Puerto Ricans are extremely clean. This is what I do for my single family portfolio.. It may not work for apartment buildings. Also you don't have to hire an attorney for evictions. Evictions are pretty straight forward. I know some of this stuff is borderline illegal but if you want to get the best tenant, that is what you have to do.
*Also don't underestimate the power of facebook when screening tenants. I was able to weed out a bunch of potential headaches by checking out their facebook posts.*
Most likely section 8 or low income people.
💯
Rental property experience
My wife has owned a few rental properties for years and always rented to section 8 tenants. I always thought many headaches went with that, but she felt the nearly guaranteed monthly payments made it worthwhile.
6 years ago, I decided to jump into rental property world, and bought 3 single family homes.
My wife placed section 8 families in 2 of the houses, and I decided that I would advertise the third property to general public.
I got quite a response, but I had no knowledge of how to screen tenants, and I had a guy with family including newborn baby. My thought was perfect, for he certainly would not want to get evicted with young kids and have to find new place to live.
He put on a show, took my for rent sign out of yard and brought it to me saying that I no longer need the sign.
I have him sign rental agreement and he hands me the deposit and I hand him the key.
I even go to carpet store and get a large cut of carpet to put down in living room so young child could crawl around comfortably.
The cash payment that I received was the last payment that I got.
So, I then seek advice on exactly how to evict.
I serve eviction notice, and I go to court on hearing date, and of course tenant does not show up.
I give date for vacating property and tenant complies.
I had checked on property 3 weeks prior to eviction and house was intact by my visual inspection.
When I checked again after tenant left, looked like his family trashed the house. As if had huge party prior to leaving and with trash everywhere including all over the new carpet that I put down for his young child.
I called him on this, and he returned and cleaned up much of the mess. But, I ended up rolling up the carpet and throwing it away.
My wife and I get our crew in the house and thoroughly clean up, paint walls then get section 8 to inspect and approve, then next tenant section 8, and has been in house ever since.
So, my lesson was, if rent to general public, make sure you do due diligence screening potential tenants. And, for me, getting less than market price for my rental properties by renting to section 8 tenants, is worth it.
I guess I don't understand?, what's so special about renting to section 8 tenets?, how are they safer to rent to seeing they are low income 🤔 does the government guarantee any of the payments if the tenant is unable to pay??
I love that you mention "doing a disservice to society" by "training" people not to pay. I can't agree more. We all need to hold ethics and responsibility highly.
being a landlord is a job and its about customer service.the tenants rely on you as much you rely on them to pay. ive had tenants stay for 20 years with rent raises etc.. because of good service.
working shlub dang they straight up paid off your mortgage
Is that what u tell yourself as they pay off your mortgage and u don't do shit except when a shitty appliance u bought breaks down?
@@TheBrownNote420 what about the tenant who lived in the house for 20 years? Are you telling me they could not buy a home in all that time? Two sides to every story. You cant get mad at the land lord if they pay off their mortgage i the person cant help themselves and acquire a home. Hell they couldn't even get a condo or townhouse ?
When selecting a tenant always go to there house unannounced. You will be able to tell if the house is lived in or trashed. Tell them that at this time you are likely to get the home ( if you like what you see) or you have someone else and you wanted to stop by and tell them. Doing this for over 35 years and has yet to fail me.
Brilliant.
Robert Vineyard never even thought of this! Now I'm going to do this when I get started!
Not intrusive if you do not enter the home. Rude? It's what everyone used to do before cellphones - go up to the door and knock to say hello.
i always try to get a look inside the car when they pull up to my property...tells alot about how messy or neat they will treat your unit.
I wouldn't go inside someone's residence. I have driven by unannounced. I noticed the yard was kept up, and had nice Halloween decorations. That sold me.
Like your postings because they are certainly about what you are ready to say to your audience, meaning: you give to as no long BS stories, bragging and fake FBs from your "devotees", and at the end we see it's was nothing said valuable...
You are valuable mentor!
Thank you!
this is so correct, and valuable information for landlords. I really appreciated
Love the bonus portion about the Set Out!
Absolutely text book, spot on, down to earth on how to be a successful landlord. We have learned over several years of making mistakes to run our system almost exactly the way you describe. Choice of tenants for us is military officers near robust military bases. Hadn't thought of the nurses idea. We've only ever had to evict one person (she was non-military) and she was yelling at us so loud through the phone you could hear her in the kitchen. We just calmly told her that she could either pay the rent in full today (the end of the grace period) or the next contact would be via eviction notice from the attorney's office. She elected the latter. Its interesting, too, to see how the public notification process works, too. If her name is background searched now, she pops up right away with a public record of eviction. Serves her right for yelling at my wife. Great advice, thanks!
Love your stories, Phil. My husband passed away and he was everything. The property manager and Mr fix it all. I am disabled. So I had to get a property manager to help me. Honestly, Phil, I feel I'm managing the property manager. I feel like I know more about landlording than they do. I have tried 2 companies and both of them I feel like I'm the one teaching them new things. We were better at renting out our house. I came up with all the ideas to try to rent it in the winter. I said we should have a winter special and take $200 off the rent. I wanted to make it more appealing than the other house that is the same nearby. That bad thing about PM is you can't control Zillow. I would have put it on Zillow. But he hasn't. He is going to sign a person with lower credit. That can be good and it can be bad. I have had a loyal tenant that pays on time that had a very low credit score. But he has a great job. Sometimes people with low credit scores can be good because they don't leave because no one else will take them.
I love "you are doing a disservice to society if you don't evict people" ... it's true. It takes a certain constitution in a person to be a landlord it isn't for everyone.
+Martin Happle I have NO PROBLEM helping society out. One false move and you're out!
+Martin Happle yes yes yes yes yes!!!
+Ginger Ashford-Tansil are you lady landlords? if so can you tell me how you started your first rental and how much money you had to start out with?
Don't be ridiculous. You will lose all your renters that way.
... the faster the better as well, so they can learn the lesson without losing their savings.
My renter paid late several times, so on the next lease agreement, I added if the rent was ever late, the rent went up $50 for the rest of the lease. It worked! He hasn't been late since. :)
Screening prospective tenants is THE most important preventative measure you can take as a landlord. And when they give you their present address, drive by to see what it looks like. Sometimes you can even see the inside of their present dwelling. That gives you a good idea of how they will treat your property.
That sounds like a good idea, thanks
Great idea.
Go to the door and ask for that person. People lie about where they live.
that,s a good idea, screening and good selection, if they have something to hide , will disqualify their self. Could you please recommend a good screening company? I had a bad experience with a tenant , one year ago, because I don,t know how check in their credit and criminal history.
RentPrep.com
The first point is the best point. "Choice of Tenant" nailed that one 100%!
Just got my real estate license and have been watching your videos all night, thanks, really enjoyable good info!
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By far , best , no bs, real state videos I have finally found .
I'm 20 years old and I wanna get into this.
Thanks for the ideas, I've been taking notes on all your stuff.
Alex Jackson How’s it going for you? Asking a year late but I’m interested to see if you’ve made any progress
Phil, you are the man! fellow engineer here as well, and am SO looking forward to venturing out! thanks for all the info.
Another awesome video, Phil! I cannot thank you enough for taking the time to make these videos. They have already helped me establish such a knowledgable foundation, & I'm still in my senior year of high school. I attribute my head start to you!
I am a part time realtor and getting ready to rent out my back house. This is a great info for me! Great presentation! I like the way you present the materials! I am following up with your other slides and learning a lot. Thumb up!
Excellent, the wife and I have been talking about getting a rental property for a while now. We just haven't made the jump yet. This video has been very helpful, thanks Phil for what you do.
I like a lot of your content, especially on tenant selection!
I share a different perspective on property managers. I have seen that not hiring a property manager in many cases ends up being more expensive than having a great one in place. I agree that there are many bad companies out there, but a great one will save property owners money 10 times out of 10. Systems, procedures, education, resources, etc. Between the learning curve, time away from career (which is most DIY landlords), higher maintenance prices, and lawsuits caused by not knowing what they didn't know that can really cost them.
Phil your stuff is absolute gold. Thank you for what you do.
Even though I've been self employed for ten years,I still loved this video lol
In Illinois they make you show up at the set out.You have to sit outside until the sheriff shows up and there is a four hour window.This is not a safe policy and needs to be changed.
Same here in South Florida. Sheriff will call landlord ahead after they receive the court's eviction order.
You provided excellent information especially regarding the landlord - tenant section, to make sure you're in compliance! Thank you so much for your videos.
Hi Phil, Great video. I am currently active duty navy and have a property manager. I am stationed in California, and my properties are in Ga. I have a property manager because being in the military, we tend to have wacky schedules. I had to evict one tenant due to the fact that they were writing bad checks. However, I got a power of attorney and allowed the property manager to act on my behalf. After the first tenant got out. lo and behold, a charge nurse applied to my ad. You are right, nurse are really stable tenants!!
Phil you should talk about the types of people you'll be getting in a mid priced rental unit....or in other words the types of problems that are common amongst these people. I've had a few renters and it's "interesting" to interact with them on their level. I didn't know when I became a property owner that I would need a degree in psychology!
Seems like working class folks would be easy to get along with. What is your screening process like.
I already was not happy with the management company and now I'm sure I'm going to save some money and do it your way. Thanks, I've already learned so much from you Phil!
EXCELLENT! Keep that 10% of gross. It's your money!
Phil Pustejovsky Thanks for this. It is the best advice someone starting in "property management by purchase" I've ever seen on line or read in any of the many books on this subject. I've often repeated the statement by Robert Kiyosaki that “your home is not an asset.” --- I say it goes beyond that and that it extends to your rental properties. --- The building doesn't mail you a check every month only your tenant’s do.
Also I second your advice to hire an attorney who will handle the collections for you. I laugh about it because it’s more fun than crying but “representing myself” I’ve never lost in housing court and I've also never collected a penny.
Again, thanks for this great video.
I do small apartment complexes. The better tenants can put some skin in the game. I collect first and last months rent there by allowing me to also reduce the deposit some what. That rule does slow down the speed in which I rent a vacancy but to me its worth it. In a small apartment community, the adjoining tenants have expressed they love my rule knowing that everybody there has something to loose if they become a problem for their neighbors. I already follow the qualification process on this video, unfortunately, I had from learn that the hard way many years ago. Phil you done a great service with what you told these people. I hope they listened.
Great video Phil and great story! I am looking heavily into getting into real estate. I am nervous but watching your videos have answered many questions that I have had. You are extremely knowledgeable and able to answer these little questions and tell it like it is! Thank you so much for what you do!
Phil,....here's why I like you...probably why many do to....
1) you're clear in your speech and delivery
2) you're confident
3) you have good teachings in each video...not "rehashed nonsense"
4) How to "choose a tenant" is "HUGE" for many reasons;
5) You've had mentors. Someone said..."Good painters' copy and Great ones' steal.
We need to keep in mind....without mentors...."we have a job" that get's us no where.
wonderful story and great advice. Love it like always Phil
Totally learned a lot of things. You really do know what you are talking about. I am living in an Asian country & l think much of what you said rings true even here. Thank you so much!
I wish I had watched this video years ago. I learned the hard way about choosing the wrong tenants! Thanks for this information resource.
I watched this video like 4 times.
Phil, you are awesome!
Merry Christmas
Truly enjoy your videos Phil! I use Cozy online software to self manage my rental. Very user friendly for both the tenant and landlord. Rent payments are done electronically and best of all at no charge!
We had a property manager once and he only checked the outside of the house, which was in great shape because of the gardener. Six months later, we drove over to take a look ourselves and when we walked inside we were shocked at how DESTROYED the house was!! Worse than your worst fixer upper and it was a fairly NEW house!! I'll never trust a property manager again.
"Auto Collection Payment" What a great idea!I spoke to my existing local banker, and she was preparing a ACH Agreement and only me $10 monthly.Without watch This channel, this is never going to be happen!Thank you for your advice, Mr. Pustejovsky.
As a new capable home owner, very educational! Thank you!
Loved your video about public records. I was able to see my landlord's properties and their values and composition. My apartment is a '2' bedroom, but public records shows it as a 1 bedroom. *There was a past improvement on the property deemed a 'covered porch' in the records. I've lived here for 15 years and would have never guessed one of the bedrooms was categorized in public records as a covered porch. Your info is helpful Phil not only for flippers, investors and landlords/ladies. I want to buy a house and now I know more about how-to research potential properties! Thank you very much.
Wonderful! And it sounds like the 2nd bedroom is not a permitted bedroom so if/when that landlord ever goes to sell the property, they most likely will not be able to advertise it as a 2 bedroom.
Thanks. Looking forward on first apartment, almost got all the money. :)
Very good video on what landlords should keep in mind when owning property!
Getting ready to buy and either rent or flip a small house--now I know not to collect houses in different areas of the country! Most landlords say that property managers are useless though there must be exceptions. Very helpful information.
Hi Phil, just started watching your videos and its obvious your one of the few on TH-cam in this area who actually knows what they are doing. Except perhaps your view on property management. As a veteran property manager, I was cheering most of your points, especially the first. I like to think of it as a "rental cycle" that starts and ends with the tenant. Great stuff! But property management, done by true professionals is by far the more profitable way to go. There are good and bad in any industy, but in my mind a true professional makes me more money than their fee. Hence, they provide a net return. They do so in many ways, but I will give you just one for illustration. Alot of things can happen in between a once or twice a year visit. And just a "stop by" the property doesnt do it (were talking in the long run). It needs a thorough inspection, top to bottom to uncover potential damages at least every 4 months. I use a checklist to make sure I'm thorough. It's so much easier to collect damages from a tenant who is occupying the property than one who has moved out. If i find a broken window, torn screen, hole in the wall, pet damages etc I can bill the tenant promptly and most importantly -COLLECT IT within 30 days. As a side note, I usually do find damages, in even the best rentals. As a professional property manager, I know there is going to be damage, I look for it. Thats just one example, there are many more. My point is, unless your a real pro, GOOD property managers are worth their weight in gold. Of course, all this is my humble opinion. I do thoroughly enjoy your videos and your energy and enthusiasm for the business. Your a real pro. Keep it up.
The number of true professional property managers that create more wealth than they take is few and far between. You sound like one of the rare few. Keep up the great work!
Im am going to be a first time landlord in the next couple months. This was an insightful video.
lol i love that part about the set out. It goes to see how fun you can be!! Awesome Vids btw.
Awesome videos Phil. I've been interested in slowly getting into local SF and apartment rentals and this videos feel like a good starting point. One critique is i would have mentioned that people need to make sure they can receive a loan to purchase a rental property to start off with but this video is, after all FOR LANDLORDS. Thanks again.
Boy I wished I had seen your videos years ago before becoming a landlord!!, I could of saved a lot of money and heartache!
Ugh. Sorry to hear that! We appreciate the kind words.
Very nice video, thank you. Jeez, you just put a wrench in my plans. Have lived in Massachusetts my whole life, was planning on moving to florida soon but buying rental property in MA (rent is pretty expensive). "stay close to home" just made me reconsider
OR, still move to Florida, but don't buy any rental property in Massachusetts when you are already planning to move to Florida.
Join a local landlords association, worth every penny to be a member.
Phil I have heard a lot of good information from you in other videos. This is not one of them. I was doing my own properties until I had an eviction come up. I’ve since turned over my two properties to a management company and it’s the best decision that I ever made. $180 out of $1800 is nothing. I am still cashflowing +400 and get great appreciation. I realized that I’m not retired and cannot afford to be interacting with tenants, studying the law and a host of other things. My manager does all those things and more. Getting ready to buy another property and turn it over to them. My fee will be 8% after two properties. Guys if you are planning to have a portfolio of properties and you are not retired, hire a manager.
Congratulations on finding a terrific property manager that puts your interests first. They are EXTREMELY rare in the realm of individual single family home rentals. Finding quality property management firms for larger commercial deals is fairly easy. It's finding a decent property manager at a reasonable cost for an SFR or two that is do difficult.
Phil, I love the layout. This really covers the basics for taking that step. Would love to see if you have done a video on how to handle the collection after eviction. I have been researching laws, contracts and what to advise clients on the best way to collect on the back rent, damages, broken leases, etc.... Winning the judgments is the easy part, that is once they are located and if they are in the same state the property is located. I also feel, another step should be the tenant payment history reporting to the credit bureaus (passed in 2014). I could go on, but you may already have these answers for me if I could be pointed in the right direction. Thanks, DPop
Rental property can be very lucrative if done right. Great Information!!!!
WE love all of the information that Phil gives!
Wow! This video was super helpful. I learned a lot and will be applying this thought process when dealing with tenants.
I think that I've come up with an awesome and very quick way to assess how well a prospective tenant will take care of your rental and also provide a general overview of their character. Look at their car. Is it clean or is it trashed? Everyone I know with a trashed car I would not rent to. lol
That's a good idea. You probably wouldn't rent to me, I drive a dirty jeep that I take off road frequently, lol thanks for the input.
+LFTD offroad You could still tell. You probably maintain it well but keep the dirt as an accessory. lol
I like ur advice just bought my first investment property ur advice Helped me a lot thanks
"set outs" are highly illegal in NJ. In fact, we have to safely store the tenants' junk for 30 days before we can dispose !!
+Victoria Johnson Well damn!
+Victoria Johnson We have to hold their items for 30 days also here in KS. But we have to take an extra step and 15 days after we get judgement and the process servers serve and lock the tenant out, we have to post an article in the local paper of your county saying that if fees not paid within 15 days of this articl, we can release your items. Its just absolutely ridiculous. All because someone cant pay me my rent.
Victoria Johnson Highly illegal? Like mass murder? Lol.
Store it in a dumpster snap problem solved !
Being 22 I’m glad I’m already almost ready to get my first rental. Just a couple bells and whistles. Financial freedom is the goal within the next 10-15 years!
Thank you for your useful tips for what every Land Lord should know🙏
I have a question. People here hire the person and he goes around and collects the money on hand. Is it a way to avoid taxes?
Phil I wish I would have watched this video 6 years ago before I bought my first two family house! I live in Massachusetts. I bought a 2 family house 6 years ago and have great tenants and also have the same tenants throughout my 6 years. I live on the top floor and they live on the bottom. I knew them before they were my tenant. They pay me every month and they are with section 8. I will admit they pay me 99% of the time within the first 10 days. They never paid me like a month late or anything like that. This is my first time as a landlord so I'm still learning alot as I go but your video helps me out with alot of things I should know and get on the ball on. There were some basic things that I knew before being a landlord but there are a few things I didn't do just yet which is the "Prepare for eviction" part and knowing the most updated local laws. I would have to find someone thats a good eviction attorney even though I honestly don't think I need to do that with my current tenants as they are pretty good. But I want to atleast get one just in case and especially if they ever leave. The reserves part I have but I need to build it up more. I'm actually at work right now trying to google the Landlord and Tenant Act of my state. I tried putting in my county but nothing is coming up for my county but things do come up regarding regular state laws. If you have any other advice for me I'd be glad to hear it! Also do you have any other resources for landlords that I could look up ?
***** Massachusetts has some very interested tenant laws. One of my apprentices is being sued by a tenant over something frivolous right now. Get a good eviction attorney to educate you quickly. Regardless of what happened the last 6 years, things can change quickly.
Phil Pustejovsky Oh wow can you say what he's getting sued over ? I'm just curious! Yeah thats the only thing that gets me about this state is that the laws tilt more towards the tenants than to the landlord. So sometimes I ask myself since thats the case if its even worth going into the rental property business on a larger scale here in Massachusetts because of that. I will definitely see if I can find a good eviction attorney just in case. I'm also thinking about joining a Landlord Association here in Mass for more help and resources. What are your thoughts about Landlord Associations Phil ?
I had a landlord that forgot that he had me as a tenant, I called him three weeks after the rent was due (thought he would eventually come collect it) and he had forgotten, he was probably the best landlord I ever had, he never came around unless I needed something fixed (never did though) except one time he came to all of his properties to make sure everyone had airconditioners, I didn't so he gave me one. He did have some tenants that he had to evict because they were noisy and through a lot of parties.
Wonderful video Phil, thank you!
Wow, this was harsh but maybe something we(a property management company) needed to hear. It is good to hear the other side of the argument(that people should do it themselves) and know how to anticipate their objections. Thank you for your video.
You have good advice, yes keep your rentals close.....I live just outside of Vancouver, the market is around $650k-800k for an older model home. It can not keep pace with current rental market rates around $2800 for that kind of property, property taxes are $3800 per year as well. Even though I own property in this market, to get the cash flow I am buying in markets about 5 hours away from me. When I can I am my own property manager. When I can’t I hire one after a very extensive interview process because I agree previous dealings left me paying all the hard earned profit to them with out the service one would expect
You may want to consider doing some short term vacation rentals. They may pull better results and those are much easier to operate long distance
Hey, Phil! This video is timeless. It's been years since it was posted but still relevant until today. Just wanna share something to your viewers if you don't mind. As a landlord, one of your biggest concerns is to protect the investments you have made in your property. Finding good tenants that will treat your property well and pay the rent on time is important.
Over the years, one of the biggest problems some landlords have encountered is having their properties seized due to civil forfeiture. It's sad that their hard earned property was put at stake just because of other's irresponsible and illegal acts. To avoid this, we advise landlords to do a background check on potential tenants before letting them rent their property. It's such a crucial and important step to ensure that the tenant has clean records.
What a MARVELOUS comment. Believe it or not, I have never heard of any landlord ever being a victim to civil forfeiture. And I have interests in hundreds of rentals across the US and accumulated thousands of individual units. Thankfully, I have never been a victim to such a terrible over-reach by the government.
@@freedom_mentor Great to know. We can all agree that that is an over-reach act, and hopefully, no landlord would ever get to experience that. We just knew via Reddit that there were cases of civil forfeiture among landlords, and hopefully that won't happen again.
I know someone who had a similar experience to the one you talked about that was a piece of land that the previous owner did not let on that the property was included in the property that had a duplex for sale. For some reason, the buyer did not do his due diligence and so his realtor did not explain that this parcel of land was part of the deal. Anyway long story short, when the buyer/owner now wants to sell the duplex and has to disclose this piece of "taxable" land goes with the duplex property. Anyway the owner took a loss in order too get rid of the duplex that included the sliver of taxable property which was good for nothing.
OMG, thanks! We once begged our landlord to set up an account for automatic payments! I knew snail mail was not the way to go with rent collection! thanks!
Setting up automatic payments does not mean you get the money automatically. It means you get the money if he has the money in his account. And you don't if he doesn't.
Although we have learned some USPS delivery areas have horrible unreliable service, for the most part they are reliable. That said, bank account to bank account direct transfers are the way to go and wording for that preference is in all our leases.
Thanks for this video. I/we wish we had checked this video (or found it) before we bought our first 5 family home. But some lessons learned the hard way and some pleasant surprises. Your first point is definitely very crucial.
I worked with several landlords an agree with almost all of them. The only one is self employed. When I rented I had a landlord who required a minimum of 3 months cash reserves knowing that construction work in western NY was tight between thanksgiving and Easter. It was handled like the security deposit.
In fact I worked the same arrangement with other land lords as well.
Phil its Ken from Orlando Fl, man ive watched all your videos and your great brother lol, cant wait to work with ya!
Another fantastic video !
Thanks Phil !
Thank you for all that very helpful information Phil. What I would like to ad to your comprehensive reason for not taking a management agency is another fact that most landlords are not aware which is that; it is in the interest of the management agency that as many items need repair as often as possible. Why? Well the Management company will charge a 10 to 15% commission on the final charge for the item repair. Lets say a boiler that cost £700 to repair. That is at 15%, so there goes £105 for the Agent plus VAT which in the UK is 20% = another £140 Totalling £245 that the agency take from you regardless of weather they pay the VAT or not.
That is not the whole story as the Management company tends to ask their workers (which is if is a large company would have) or just an engineer on a call to double the charges so a repair that is £700 could cost £1.400 and then ad their commission plus the VAT. You would have been better off buying a new boiler instead.
The boiler tends to be the most expensive item but there others even more expensive like a leaking roof where you can not see the work done?
Other items such as the washing machine, cooker or fridge tends to be cheaper but les reliable after repaired so the preferably thing is t0 buy a new one with a guarantee if available for two or three years.
I found one year that the person who really was making any money out of my house was the management agent.
Good vid Phil, time was well spent and good information.
Very helpful ideas for my property management research project, thank you and I am subscribing to your vids.
I meet the neighbors, exchange phone numbers and ask the neighbors to call me if they see things that don't look right at my rental property.
Awesome video. I am in Canada, unfortunately Landlords do not have the set out option here:(
I love your vids Phil keep it up! Ive learned so much about rent to own & now im being encouraged to offer more to my prospects
THANKS PHIL. THIS IS THE KIND OF TEACHING IM LOOKING FOR
Going over to where the potential tenant currently lives is GOLD
Awesome videos Phil! I can't thank you enough. Been searching for my first property for a while now and these videos are going to save my a**. Keep 'em coming! Now, do you have experience buying and renting out duplexes (or half of one)? Any tips on that?
Our company has been in rentals for ten plus years. We have been lucky about evictions and property damage. My partners believe it's because of the way I screen them. I find that the more you talk to them the more you learn and that checking out the application is very important. Evictions are no fun but it's part of the process. We also have good houses including some extras so our rent is higher, eliminating what we call " Rent Hoppers" and borderline renters.
Good stuff! I am a young Land Lord of just over 3 years. I was lucky enough to have had some good advice like this from some others in this business. I started the auto draft rent system from early on with great success. I have to say all of your points are spot on! I myself need to be more strict with #1. Choosing a good tenant. These people lie all the time. The problem I have is. Say I have an open unit. I may have 3 people who made it through the initial interview they like the place, now I have to choose. I do a free CCAP and look for judgments, past evictions and disorderly conduct convictions. (Disorderlies mean they do not play well with others) Get there job history and primarily rent to people above the poverty line. And so far have had descent results. I would like to spend money on all of them and do a credit check but at the end of the day that is pricey and all three might not qualify. Is there an affordable way to screen credit scores? Or are you going to tell me to spend the money on the front end to avoid spending more on the back end. lol. Thanks for your videos!
I charge $30 per application and I pay $20 per credit report pull.
These videos are priceless. Great stuff☺
Love the video. We got a talk. Got a lot of similar things going on and I like your style of working.. at least as you have described it.
Excellent video on property management. I am amazed.
What really gets me about your videos is listing of the actual individuals titles and real estate language, i.e. Eviction attorney, homestead law (previous video), which gives us a starting point to research the topic and learn about it. Your base that you set forth here on you tube is a fantastic start. I can only imagine what your apprenticeship programs are like. My plan is to contact my old realtor who is also an investor and ask for him to be my mentor and see if he would go in on deals(creative deals) that I find and let him be the funds in case we need incentives for the owners to complete the deal. I figure that's a good start when you have very little to start your wealth. Hustle and research for funds,seems fair. Do you feel that would be fair?
Finding a truly good mentor is extremely difficult.
What are some signs if you are in good hands?
Nikola Tipuric
This video explains: th-cam.com/video/9-VwgbqHwVc/w-d-xo.html
Phil Pustejovsky
Thanks, gave me a little bit more of perspective on what to watch for
Absolutely fantastic video and information Phil!
Hi Phil, I'd like to add some points,
- If the Property Management doesn't charge you while the property is vacant, they would do their best to find the tenants fast.
- They have more tools for screening, but if you have done your homework, you can use other landlords experience and find the best tenants. In our company, we guarantee the tenant we place.
- I agree that easy payments are a big help to avoid late payments.
Thank you for the info.
+Neda Navidnia I don't think they have better tools. You can access the EXACT same screening tools as any property manager.
I didn't know that, I know that some of them are limited to the state and are not nation wide. And I know that for some of them you have to be a licensed Broker. It's good to know how individual landlords get their credit report and background check.
+Neda Navidnia For example, RentPrep.com
hey Phil...what do you recommend when you purchase a property that is tennant occupied and you don't have much info on the tennants background?
Get as much information about the tenant, prior to closing, as you possibly can. Inheriting a tenant can be a real challenge. But if the deal is good enough, it can be worth the extra hassles and expenses.
Most people don't know that in most states if you are on a week to week agreement, you can boot a bad tenant/squatter in 10 days instead of the national usual of 30-90 days.
Good tenants won't care if you do the weekly thing b/c they know that they won't have any problems anyway. They can pay 4 weeks in advance if they want too..squatters looove 1 year leases, and they know eviction laws in their state as well as the lawyers do b/c this is what they do for a living, they live for half of the year for free.
It's also a really good option for school towns, I've got 3 universities in one of the areas I invest in. Students like the ability to pay exactly what they need to without overpaying. They can go home for the summer as well.
+No compliance I appreciate your insight. That was a terrific comment.
+No compliance Thanks for the comment. I am going to look into implementing this into a lease option. Do you offer this UPFRONT?
Hannah Elder This is a good site. it should have your states laws.
www.landlordology.com/georgia-landlord-tenant-laws/
It's heavily state dependent. I do put it in my lease, similar to an agreement that is for temporary period, where a tenant's lease is up, but they need a few extra weeks or months to move. It's that, but simply permanently in place for the entire lease.
Hannah Elder I'm in GA, and in my state there is no statute for a mandatory period the landlord must give the tenant if it is a ''week to week'' lease.
Interesting. So treat it as a tenant hold over but put it in place from the beginning of the lease. I see! Do you require any notice if they want to vacate? IE I require a 30 day written notice if they want to qualify for their deposit to be returned.
Purchased a property that burned down due to a forest fire. It was left unimproved for a couple of years. It was initially cleared but still contained the foundations of the previous home. Other lots in the area were similar as well. The area was close to a popular recreational lake in a mountain community and the property was beside a creek. The city decided that they wanted to spur development in the area and recover from the bad fire that occured. The city sent out notices that all foundation work had to be removed and the property graded or they would be cleared on our behalf for a premium. In addition, due to the proximity to a creek and the age of the previous dwelling, for environmental concerns (mainly asbestos) the property would have to be cleared by a certified expert in hazardous waste removal as well be approved by the city and federal authorities. The federal concerns arise because the area was in a national forest. If that wasn't enough the city also decided to improve the community by running gas lines and sewer and of course required the owners to pay for it. With the added clearing costs, improvement costs and timeframe imposed by the city and federal authorities the property became a headache. Also, this happened the year before the housing crisis. The drop in home values made it finacially impossible to improve the lot and recoup any expenditures. The lot is unimproved to this day.
Luckily Ima HVAC tech so if any of my properties heating, ventilation and air conditioning I got it
Hi Phill! Thank you for this video I will apply them and will be prepared for my very first rental!
Thank u heaps
Leti, from new zealand
Hi Phil
You are usually right on target, obviously from your knowledge and experience. But you missed the boat on the property management company.
I follow you and believe in you, but! As a property manager, I usually charge 35% of the 1st month rent and 7% thereafter. I renew at 25% plus lease prep fee. I do not upcharge repairs, nor take from vendors. Nor do I reduce the quality of my services. I understand that an investor must make a return to be in the game, and I must help if at all possible.
Real estate and property management are viewed as a blessing, not work! I try to share with my owners and represent them well. An investor should be just that, an investor! This should be a win-win for all parties, and a matter of trust between all parties.
There is a difference, generally speaking, between an investor an a landlord. An investor is a landlord, while a landlord is not always an investor. The investor can use a manager, while a landlord is probably a person that is stuck and can not afford a manager, or a late rent payment.
Thank you Phil for letting me express my views, rock on!
Without even reading any further than the first line...let me guess...you're own and operate a property management firm?
I read the rest...BAM! I guessed right...and, by the way, you have the cheapest rates of any single family home property management company I have ever seen in the history of this business. I hope you stay in business for a long time! Thanks so much for your comments.
Phil Pustejovsky Hi Phil
Thank you so much for your time. Rather than cheap, I would prefer the word fair. As you know, much money is to be made in the field of real estate. We can make a very good living doing this.
Good mangement begets the need for good Realtor services. We also represent our owners as for buying and selling. We give back part of our commission to help them go on to the next property.
Again, thank you Phil and I would like more information regarding your Apprentice Program.
David Kushner
Value is a better word. When you apply to my apprentice program, you'll be provided with much more information about it. Thanks for watching.
The problem is screening based on objective data such as income, evictions, credit score is not enough. You have to feel them out to see what kind of person they are. I do a lot of section 8 and I don't even answer the phone when perspective tenants call me.
I have them leave a message asking them to leave their first, middle, and last name spelled out, their date of birth and gross monthly income. If they have a section 8 voucher I asked them to leave how many bedrooms the voucher is for. This is because the more bedrooms the voucher the more Section 8 will pay. This way I can run their information in the computer and pre-screen them before we even talk.
Also I do an in home walk through visit of their current residence to see how they live and how they take care of their current property. I look for holes in the wall and roaches etc. If they sound ghetto on the phone I don't return their call. I've been doing this for years and how they sound on the answering machine is everything. I'm not discriminating based on race I'm discriminating based on demeanor. If they say BADROOM, BAFROOM, and BIRFDAY. I've heard enough and they are ghetto. My experience is Gays and Hispanics particularly Puerto Ricans are extremely clean.
This is what I do for my single family portfolio.. It may not work for apartment buildings. Also you don't have to hire an attorney for evictions. Evictions are pretty straight forward. I know some of this stuff is borderline illegal but if you want to get the best tenant, that is what you have to do.
Anonymous this is really good info. Comment gold lol
You're discriminating against black people and you know damn well you are wrong.
Anonymous is perpetuating a stereotype, but he's kind of right.
@@ohhweeeee BIRFDAY is how Jim Bob talks. That's southern.
lots of information, this is great. thanks again phil