Someone once asked us how do you find trustworthy property management. It is a very good question. Since JJ and I have never had to good luck to find someone much like ourselves we could barely answer the question. However, through various meetings with the Landlord Associations, Real Estate Investment Clubs, and various educational real estate meetings throughout the years, many have come up with some very good ideas.
The best idea I have ever heard was from an overseas property investor in the UK. I was emailing back and forth to this particular investor about possibilities of investing in properties overseas when he wrote to me on how he did it all. He did most of it on-line via the internet. From finding properties to getting good loan deals for them. He rented his apartments via the internet with lots of photos. He set up appointments via the internet. And all his rent money collection was done via the internet through PayPal, on-line banking, etc! That way there was no questions when it came to who paid or who didn’t pay. Or who paid a manager that may or may not have been crooked. It basically took out the property manager out of the picture! For him, it was his way of screening out problem tenants or ‘less than desirable tenants’ for his property.
Many of you may know or have heard of the “Rent Ratio Rule.” This rule of thumb in the real world assumes that certain levels of rent garnered gets you certain types of renters. The lower the rent, the lower of good quality people who are clean, quiet, responsible, and over all less hassles type of people. The higher the rent, the less problems with renters and collecting money.
This rule isn’t always the case. But it certainly describes real life situations in masse.
This particular investor believed that the people he wanted would be well-educated, responsible, have a good steady paying job, and be less destructive to his properties. However, it did rule out the elderly of our generational group.
Most folks over the age of 60 would not understand the internet much less how to run a computer and do on-line banking. Yet, he had issues with the elderly. The elderly are at an age where some will grow bored when retired and have nothing better to do than tell you that the neighbor’s newspaper been out for longer than 2 days or that a rock has been turned over or is out of place in the rock garden and they want you to come out and fix it. And yes, it does happen! And some of us can roll our eyes while others of us go crazy at even the thought of it such as my email pen pal.
Certain groups are not for everyone, though my husband and I do enjoy the catering to the elderly more often. Most just want to have someone young to talk to and we enjoy the stories of yesteryear while we work on our properties doing the light maintenance from time to time. In fact, two of them have become our honorary managers of us, making us feel like we have a W2 job again!
We like many of them because they become our eyes and ears (instant security cameras), they are usually clean and neat folks (not tearing up property), many are grateful for their places and the services we provide and tell us so (good warm and fuzzy feelings for the job we do) and most of all—because they pay on time if not a few days before hand (more interest earned on our money in bank) compared to most of our renters enjoying the full 5 day grace period and then some!
Another way of looking at it would be to hire my elderly in return for a little discount on their rent in order to pick up the rent in their complex for me, cutting down on my driving and hourly time spent on collecting. I find that I can trust them easier than some folks today. Because this is the generation that honored thy mother and father and not the credit card terms of today’s generation.
So, if you are computer savvy, then set up your PayPal account in which it will send out a red flag if someone doesn’t pay in time thus, giving you one trip only for 3-day notices and to collect rent payments from your discounted renter or the few that cannot operate a computer much less their own TV remote.
Other ideas were to hire a retired couple (usually giving them a free or heavily discounted place to live). A police officer or military personnel, whether they are active or inactive in their jobs. Last to hire a notable property manager, but insure that your renters pay with checks and money orders (never in cash) and insure that your tenants receive a receipt stating the day, the amount, how it was paid, their unit’s address, and for what month in order to protect themselves from a fraudulent property managers or who you hire to do the job for collecting rents.
And one day, JJ and I will find that ideal scenario of finding the perfect property manager and maintenance guy who will treat our properties as if they were their own (more because their job depended upon it) and keep them up to the highest of standards that we place on our units. Because the person you hire has what their idea of what is ‘good enough’ not your idea—-for you will often find that your underling has the warthog’s idea of cleanliness and present-ability —which is not so good to potential new renters looking for their new home.
Crissy and JJ