As I was brainstorming what to talk about this month in my Riverview Property Management newsletter, I decided to explain a couple of techniques I use to improve my real estate investing. First off, I highly recommend you obtain a real estate license in the state you wish to invest in over the years.
I know the expense and effort puts people off. Granted, if you aren't interested in owning five or more rental properties across your career, it is probably not worth it, but let me explain why it has been a huge benefit to me as a Riverview Property Manager.
"The trick in investing is just to sit there and watch pitch after pitch go by and wait for the one right in your sweet spot.If people are yelling, 'Swing, you bum,' ignore them."Warren Buffett
As an active real estate investor and owner of a Tampa property management company, the above Warren Buffett quote always fascinated me. There is real genius in this idea, but it is super easy to miss and much harder to implement than one might think.
Most people get addicted to deal flow if they get immersed in real estate, stocks, or whatever investment opportunity catches their eye. I know I did. There is a huge emotional rush closing on a "good deal. "It's a natural high because the body dumps so many chemicals in your body that you feel on top of the world. As a Tampa Property Manager, I want to feel this way over and over again..
As the owner of a Wesley Chapel Property Management company, I personally approve and deny all rental applications. I do this for one simple reason: to avoid nightmare tenants. This type of tenant doesn't pay the rent on time or at all, trashes the home, is a constant, demanding person who doesn't abide by the terms of the lease, and more often then not ends up owing you a lot of money and possibly gets evicted.
Nightmare tenants are (in my estimation) 3% of the population, and since 36.6% of the people rent in the US, that is about 10% of all potential tenants. The key to avoiding them as a Wesley Chapel property manager is to screen properly. To learn more details of how to do this, please see my other articles or videos.
The purpose of this article is how to break the bad news that you will not be accepting a potential applicant as a renter because
We manage about 146 Section 8 rentals as a Tampa property management company. I've learned as over the years a few tricks that have a dramatic impact on the quality of tenants selected. A big key to success is just avoiding the poorly behaved and disgusting housekeepers on the Section 8 program. They do the most significant amount of damage because they have no respect for any cleanliness standard. How do we identify these people and weed them out? Glad you asked.
First off, as a Tampa property manager, you do not accept anyone who is brand new to the program. They have no track record of behaving responsibly and caring for a home. People who get their first Section 8 vouchers the first time have not idea the real value of
I know the title of this articles goes against commonly held wisdom when it comes to qualifying tenants, but as the owner of a Tampa Property Management company, I've learned the hard way this is not always true. Of course, having a high credit score is an excellent sign of a responsible tenant, but there is more to the story.
If you are a Tampa property manager or anywhere in the US, you should take a closer look at the credit report.It takes some time to get familiar with exactly what I mean, but it is worth the effort. I've noticed about 5-10% of rental applications that come across my desk with low or no credit scores paint a very positive story about the tenant if you know how to interpret the credit report.
As a Tampa property management company, I recently signed a new owner who had me start managing a lovely townhome that had been sitting vacate for a long time. They were trying to manage the property on their own but had family health issues, so it was taking a backseat to other responsibilities. We checked the home out and started marketing it in a couple of days, no sweat.
Well, a week later I hear from the owner about a mold problem they are having at another rental property they own in Tampa. As a Tampa property manager, this kind of call sets off all sorts of alarms in my head. Though, we happen to be state licensed mold remediators and have done tons of mold jobs both big and small. Mold is a very a touchy subject; it can lead to an expensive lawsuit, for the owner and my company.
We found out the tenant hired a mold company, who claims the house is infested with mold. The mold inspector recommended she leave the home immediately until the home was cleared of mold. They used words like "this house should be condemned" and "Mold infestation."This immediately
As an owner of a Tampa property management company, I encountered a lot of owners in unfortunate circumstances.I just spoke with a potential client who lives in Orlando.She had just finished spending over $26,000 renovating a very nice townhome in Tampa.She had picked the wrong tenant thinking she was doing the right thing.
The sad thing is the owner was just acting as any normal, decent human being would.The problem is owner encountered one of the 2% of our population that are considered compulsive liars. As a Tampa property manager, I see this all the time.
I call these people "Nightmare Tenants" because they will lie so convincingly that he or she could win an Academy award for acting.These people are so good at lying because it is their basic default setting.They lie all the time in every aspect of their life.They've become so skilled at it, that it's almost impossible to detect it.
As an owner of a Riverview Property Management company, I've noticed the tendency of rental property owners to sell in 10 years or less.There can be a lot of valid reasons to do this such as the property has appreciated enough to sell for a good profit, you have need for the profits you would receive, or you don't want to lose out on the profits already earned by hitting a severe recession.
As a Riverview Property Manager, I'm often asked by my clients my opinion of whether to sell or not. I always reply that it depends on your situation.If you really need the money for something, then selling can make a lot of sense.I've too struggled with whether to sell my own rentals or not especially when the real estate market is hot.So, I thought I would explain my thinking if you own a specific type of rental property:a property with 30-year fixed financing.
Let's say you bought a home a $200,000 house in nice neighborhood with a good school district.You lived in the home for 4 years and had to move out of state.Let's assume you put 5% down to purchase the home leaving you an initial mortgage balance at day of purchase of $190,000.
Written By David Lowrey, Stress Free Property Management
As an owner of a Wesley Chapel property management company, I've noticed a severe slow-down in available renters from November 1 through January 10th. This certainly is no surprise to most property owners. Tenants, just like homeowners, don't want to move during the Holidays. Everyone is saving up for Christmas, families are coming into town, and a lot is going on. But, if you have a property for rent, what do you do?
Now, I will describe some hopefully insightful ideas as a Wesley Chapel property manager in a moment but let me first emphasize the standard "blocking and tackling" in renting a home quickly. One, answer the phones 7 days a week, especially evening and weekends. I know it not the most fun thing to do, but it will make a huge impact during the slow season.
Two, process applications in 3 days or less.Get the background checks for credit and criminal ran on the first day. Reach out to previous landlords and current job of tenant by the next day or sooner. You'd be surprised how getting on top of the approval or denial of rental applications will dramatically reduce your vacancy. Often landlords delay this process, and the good tenants are still looking, and often find something else.
Written by David Lowrey
As an owner of a Gibsonton Property Management company, I deal with all sorts of owners/clients. They can range from the frustrating to serene and everything in between. The most difficult challenge in owning a property management company is dealing with owner complaints and requests.
As a Gibsonton Property Manager, we are far from perfect and make mistakes all the time. There are so many balls that we are juggling that dropping a few here and there is normal. My personal mission is developing my own software database to help us drop far less than our competition, but that is a story for another day.
Today or tomorrow, I’ll be letting go a client with an incredible rental home. The home rents for $2500 a month and in a lovely location, but the owner is killing us. He is wonderfully nice person but so detailed oriented and questioning every event and decision, that we are losing money every month managing his property.
Typically, I can figure out a way to get clients like this to relax after we find a tenant. However, this client just renovated this home and has a lot of issues with it that need to be addressed. It looks lovely, but there is a flooding situation in the backyard, sewage backup, special landscape needs, and the owner has been managing several other properties on this own.
When I have an owner that manages himself and lives locally, I typically start to worry. My fear is they
Written by David Lowrey
As the owner of a Plant City property management company, I meet a lot of private landlords in all sorts of distressed situations. In fact, I just met a retired welder, who owns a nice mobile home lot on 2 acres. He has tenants who having been paying for almost 3 years but just got cited for code violations (trash in the yard.)
He called me because we specialize in these sorts of situations as a Plant City Property manager. This is the first time he has seen the property since he rented to them. He has been living out of state. Needless to say, the inside of the home was equally trashed as the outside.
When we showed up to look at the home, she started screaming at us and demanded we leave, so we left. Keep in mind the tenant is paying the rent each month, but the lease has been up for about 6 months. The owner doesn’t know what to do.
Can he just kick them out or file for eviction? How does he get them to leave?
In Florida, if a tenant is violating the terms of the lease, you must give them a 7-day notice on...
As a Brandon Property Management company, I just recently hired two general contractors for two different projects. Both had done work for our companies over the years and had good reputations, but it was the first time I hired them for some personal construction projects.
One of them, I hired to add some windows and move a sliding glass door. It required some block work and some advanced carpentry work. The 2nd GC I hired to renovate a house I bought as a Brandon Property Manager which he agreed to do for $35,000.
The quality of the work for both projects were excellent. The time frames were delayed. This is where normal folks start getting upset, and I must admit it does bother me a bit. In this case, I didn’t give either one of them a hard time, because I could clearly see the quality and attention to detail was superb.
I also have a partner who is a general contractor and he has told me renovations always take longer and cost more, because once you open-up the walls, you always find more stuff wrong.
However, when I got the bills from both, I was annoyed because the change orders were higher then expressed to me during the projects. So, I did what I usually do when I’m thinking of engaging in an aggressive argument, I talk to my very calm, Buddha-like patient, partner, Chris.
He explained that I can’t have the same standard for a general contractor that I have for myself. They are working in hot, dirty environments all day and dealing with surly sub-contractors that don’t show up and give them hassles all the time. When they get home after a working 12-hour day, they attempt to do their paperwork and billing. This is why they are so often disorganized and change orders can come in higher than originally expressed.
Granted the GCs’ must have integrity, but it is easy to see how change orders
Written by David Lowrey, Owner of Stress Free Property Management
Most new investors get what I call “Deal Fever.” What is it? Well it is the overwhelming desire to just do a deal and buy a property. This is especially strong when you’ve been looking for awhile and lost out on some previous deals, or when you start counting the money you are going to make before you have it under contract. I always think about this as a St. Petersburg Property Management Company looking for deals.
I know you are saying it, because I said it too when I first started out, “that won’t happen to me!” As a St. Petersburg Property Managerwith all these years under my belt, I still catch myself sliding into this condition.
To ignore this Fever takes lots of practice and experience. Even experience investors, still fall into this condition all the time. It is perhaps the most dangerous tendency then anything else, when searching for deals.
What are the symptoms? Let me share them from my own personal experience.
Written by David Lowrey, Owner of Stress Free Property Management
Over the last year, the Florida real estate market has gone red hot. Deals are flying off the Multiple Listing Service in a day or two. As a Wesley Chapel Property Management company, it can be frustrating because you submit a full price offer, and the deal gets sold to someone else.
After a while, as a Wesley Chapel Property Manager, I started to get discourage about finding a good investment property. The competition is so fierce. Eventually, I figured out what was going on, and I’d like to let you in on an insider’s secret.
When a market becomes a strong seller’s market, the listing agent realizes she is in the catbird seat. There are literally a dozen people the listing agent could sell the property to at full price or near full price. Suddenly the listing agent is the prettiest girl in school and everyone is vying for her attention.
The listing agent starts thinking, “Why should I sell this property to someone represented by another real estate agent? I would have to split the commission.” So
Written by David Lowrey - Owner of Stress Free Property Management
One of the biggest roadblocks to financial success is what I call the “Savings Ceiling.” It is in my opinion as an Apollo Beach Property Manager, one of the number one reasons, why everyday people struggle making progress toward financial freedom. What is it, you say?
Well it took me until I reached my forties as the owner of an Apollo Beach Property Management company to notice this phenomenon, and the insidious way it keeps people broke. Have you ever noticed that most people have a certain number they need in savings to feel secure?
It could be $2000, $5000, $9000, or more in a savings account. The number really doesn’t matter. It is just the psychological number people have that makes them feel secure. Once they reach this number then a strange thing happens...
Written by David Lowrey, Owner of Stress Free Property Management
As a Saint Petersburg property management company, we work with a great deal of Section 8 rentals. The challenge we always have is some portion of this tenant base is filthy, and they cause a tremendous amount of damage while living in our homes.
We’ve noticed over the years as a St Petersburg property manager, the worst of the worst Section 8 tenant are newer tenants on the program. We no longer accept anyone who just got on the program, because there is no proof they will be clean and decent tenants.
The second thing we discovered is the worst Section 8 tenants tend to be
Written by David Lowrey, Owner of Stress Free Property Management
About eight years ago, I attended a real seminar and ended up having dinner with several the speakers. The topic of the hedge funds and private equity buying up tens of thousands of single family homes came up. As an owner of a Tampa property management company and an active real estate investor, I had strong opinions on this subject. Everyone was going around the table giving their opinions of this and how we thought it was going to work out for these new players.
The consensus was we thought the hedge funds and private equity were crazy and paying too high of prices. We also thought they were ill equipped to manage all these assets in so many different markets. This was right in the middle of the Great Recession. As a Tampa property manager, I personally felt they lacked market knowledge and were paying too high of prices and were going to get crushed managing these single-family homes. It turned out we were 100% wrong!!
The only person who didn’t feel like they were crazy was an investor in his late sixties. He explained
Written by David Lowrey, Owner of Stress Free Property Management
Running a Clearwater Property Management Company for the last 19 years has taught me a great deal about frustration. More specifically, the frustration tenants get when things go wrong. If you are a landlord, you are the obvious target. The real question is should you take responsibility.
For example, as a Clearwater Property Manager, I’m representing an owner whose septic tank has collapsed. The home’s bathrooms and tubs are backed up with sewage. The home is unlivable, and the septic companies are refusing to give us a quoted price. They want an open checkbook, and I guess they are busy as hell.
So, what do you do? As a landlord in Florida and I assume most states, you are not responsible for Acts of God. You are under no legal requirement to put them up in a hotel. You should know this. Have this defined in your lease, and mentally rehearse these scenarios in advance.
