OfflineHey DG Family:
For those of you who are buying real estae to have a rental income, I thought I would tell you about my experiences, just so you know what to expect.
For years I have been buying foreclosures, fixing them up myself, renting it out myself, managing it myself. There is one small problem with that -- all the properties are 100 miles (2 hours drive away). When you are 21, single and have not a worry in the world -- that's ok. But then you grow up, get married, have a family and driving up and down every weekend becomes harder if not impossible. So, I hired a management company to look after the properties, to collect rent and find new tenants when old ones get out.
They were supposed to be screaning the tenants, run the background check and so on. Well, when old tenants moved out, the house was vacant for about 6 months. I was told that there are just no takers. I said to myself, let me run an ad on craigslist. I did and within 2 days I had over 20 emails asking to see the place. When I confronted the management company, I was told "well you are not our only client and we are shorthanded, sorry". So I fired them that day.
I am not saying all the management companies are that way, just want to warn you what to look for.
Now getting to the tenants themselves. Boy oh boy!!! The reason I started investing in PA rather then NY because you need 6 months to get a non-paying tenant out. In PA you need 1. They don't pay one month -- OUT!!! Easy enough?!
I literally had to put out about 20 of my tenants at various times for non-payment of rent. There is term used for some tenants, they are called "Professional" ones. These people know the system better then any lawyer and use it to their own advantage. They work up and down, left and right, until they can't use it anymore and then they move out and on to the next victim.
One thing I have learned, do not I repeat, DO NOT!!! Form any sort of bond with your tenants. Don't listen to their sap stories, don't let them cry on your shoulder. This is a business investment!!! PERIOD!!! If they don't pay the rent, they are taking food away from your kids, because you have to pay the money for the mortgage. You may or may not hear all the excuses in the world, do not budge.
It took me years to come up with the lease I use now. It is 7 pages long and protects me from everything. It is also as elaborate as possible so people know what they are signing up for and don't say "Oh we weren't told!". I am not sure if I am allowed to post the copy here, if I am, let me know and I will.
I read alot of posts about people wanting to buy properties for rental income, so I figured I will let you guys know what you should expect.
Yuri
-- TIME IS A TERRIBLE THING TO WASTE, SO STOP WASTING IT --
That is GREAT information. We would really like to eventually get some cash-flow properties in the near future. We were hoping to assign some contracts first, just to get rid of some debt and get a little capital. We would LOVE to get our hands on your 7-page contract. The more we can learn from those more experienced than us, the better!!!!
Thanks for the info!!
Dominic and Kim
Glad I could help. Like I said I am not sure if I am allowed to post it, but I probably can email it to you.
Yuri
-- TIME IS A TERRIBLE THING TO WASTE, SO STOP WASTING IT --
Someone that has been on here longer could probably let you know for sure, but I have seen other people post contracts they have used on this site before, so I would think it would be fine. If not, I'd really appreciate it if you e-mailed it to me. I'll PM you my address!
Yuri
I think that it is great that you posted this. I am sure that many people will benefit from your experience. That is what this site is all about. Now, I know that members post copies of their contracts etc. all the time. I am sure that we would all love to see your 7 page lease too. I am not sure about posting it here, probably would be fine. At the top of the page there is a Get Support tab, maybe you could ask the help desk and they might be able to help.
Angela
I will do just that. If I get a green light, I will post it asap.
Yuri
-- TIME IS A TERRIBLE THING TO WASTE, SO STOP WASTING IT --
anything on posting contract sounds interesting would like to take a peek...
I am new myself and would love to see what you have in your rental contract.
Thanks,
Deborah
I don't have any rental properties yet, but I read that if you decide to take on the management of the property NEVER tell them you are the owner. When you collect rent or deal with issues you always tell them that you'll have to get back to them after the owner has thought about what ever it is they're asking for. If the tenant finds out that you are the owner, they will ALWAYS demand things from you every time you collect rent, etc. Another tip, I read was that if a tenant calls you and tells you that their aparment was broken into and that the window or door needs to be fixed. Tell them "No problem. Just send me a copy of the police report and I'll have someone out to fix it right away!" 9 out of 10 times there is no break in, but a tenant who locked themselves out of the apartment accidently. Tenants think that if they say they were broken into then they won't have to fix the window or door because you will. By telling them that you need a police report before fixing the window or door, you are putting them in a position to either file a false police report to get out of paying for repairs or having them learn a hard lesson on why we don't break into our apartment nilly willy.
thank you for the tips, i would of fell for the broken window part, hook line and sinker! I really like this site, all for one and one for all !
i am so excited to get started, ! i am just now reading my first book , I have been following realestate my whole adult life, i could probably tell just by looking at any house how much they will want for it, I really didnt think i could do this until i seen the advertising on tv. and the will to suceed! i am tired of living pay check to paycheck! i can and i will , i dont have much money, 1500.00
is all i have to play with right now sooooo,,,,, no money down is the way i am going to try first, until i get more money saved after making money with the info i am collecting from this site and deans books.. thanks for taking the time to give me tips i really appreciate all i can get!
Deborah in tulsa ok