We use the Dream Team Checklist to remind us to continue to expand out and strengthen existing relationships we have with key dream team members that will help us accomplish more as real estate investors.
Unlike many of our other checklists that give you action steps, this one lists some of the key dream team members to encourage you to reach out and make contact with professionals that will make your life easier and more profitable.
Whether you use it as a reminder to ask your existing dream team for referrals or recommendations in those areas or as a list of folks to seek out and interview on your own, you will find the list to be a great resource for improving your real estate investing business.
Here is a very abridged list of key dream team members from our much larger list:
- Accountant/Bookkeeper
- Administrative Assistant
- Appraiser
- Attorney
- Contractors
- Lenders (Traditional Brokers, Hard Money, Private Money)
- Insurance Agent
- Property Manager
- Real Estate Agent/Broker
- Real Estate Wholesalers
- Title Company
Until my next post,
James
Here is another great article submitted to us that I think you’ll really enjoy and learn a lot from (links in it are for our Real Estate Investor Bronze Members):
In the nine years I have been doing Property Management I have learned that getting the a tenant that will pay the rent on time, and treat rental property with respect is not always an easy task.
First a extensive Rental Application is a must. Everything you can find out about a tenant will help, rental history, employment history, and income for starters. If the applicant is a first time renter, a co-signer is a very good idea.
Here are some of the situations that you could be faced with:
When you show a property, the people tell you that they have all the money for first month rent and security deposit with them and are ready to move in. You tell them that is great, but they have to fill out a Rental Application, they take the application and you never hear from them again. Could be that that if you accept them on the spot, that may have been the only money you would see from them.
The prospective tenants say they have enough money for the first month’s rent and security deposit, however they don’t have a job, but intend to look for a job. Tell them you would be happy to consider them for a rental when they do get that job.
When you hand a prospective tenant the Rental Application, they tell you that they have been evicted more than once, but it wasn’t their fault, and they have a lengthy story. Beware, these are not the kind of tenants you want.
The application shows just that their income is just above the monthly rent, and the prospective renters tell you that it will not be problem. It will be a problem; have them write down all their monthly expenses, and both of you will see that there is just not enough income.
If they are first time renters, go over what is involved in the rental of the property. Young people can be really great, but they just don’t know what is involved and/or expected in renting. Go over what additional expenses and responsibilities that would be involved. They may not be aware that they will have to pay for heat, electric, trash removal and so on.
If you do allow pets, first find out what kind of pet they have. There is a big difference between a small older dog and a Great Dane puppy. If they tell you they work 12 hours a day, but their dog never has had an accident on the floor and sleeps the entire time they are away from home: beware!
The tenants like the property, but want a few changes, like a different paint color (the apartment is off white and they are thinking of red), don’t like the stove, the color of the carpet will clash with their furniture, etc. Again watch out because these people would always be asking for more and may never be happy in your property.
You show the property and there are some things that need repair, The prospective tenants tells you that they can do the repairs if you take the labor and materials off the rent price. Unless you know for certain the tenant can and will do the repairs respectfully decline. I have found that this situation almost never works. The tenant doesn’t get the work done, has taken the repairs out of the rent, if the work does get done it is not what you had in mind and the tenant is offering to do the repairs because he doesn’t have any money
There are many more scenarios, far too many to list here. The bottom line is if you are in doubt, keep listening to the prospective tenant to get a feel of who they are and make sure you check everything on their application. You do have to be aware of the Fair Housing Act, but it is not against the law not to rent to someone with a poor rental history, bad credit, someone with a pet or someone who doesn’t accept you property as long as it is up to code.
You can also get more information about Property Management including an extensive collection of free property management forms exclusively for our Real Estate Investor Bronze Members.
Until my next post,
James
NOTE: Resources linked below are for our Real Estate Investor Bronze Members that are logged in only.
You have decided that you don’t have the time or are too far away from your property and need a Property Manager. Not all property managers or Property Management companies are the same. Hiring the right Property Manager will make all the difference in making a profit from your investment property or losing money.
Do not assume that real estate companies sell property and also manage property. Property Management is definably a specialty, the laws are very different and a real estate agent may not know the laws, or have any experience in managing rental property.
First locate property managers or Property Management companies from the yellow pages in the phone book or the local Chamber of Commerce. Now you can start shopping. Call the managers or companies and make appointments to meet.
Before the meeting make a list of questions you need to ask. Your list might look something like this:
- What areas does the Property Manager cover. You want a Manager that is in the area and can show your property, check your property and is familiar with the area.
- Experience counts. Find out how long the Manager has been doing Property Management. It takes experience to screen prospective tenants, evaluate rental applications and prospective tenants. It also takes experience to handle the tenants and your property.
- Ask the prospective Property Manager for references. The Managers should have letters of recommendation, along with names and numbers of clients.
- It is important that you like the prospective Managers approach to Property Management, the prospective Manager be readily available to you and your tenants. You don’t necessarily have to like your Manager, but it helps. You and your Manager should have the same goals for you and your property in mind.
- Knowing the laws will make all the difference. Each state has their own Tenant and Landlord laws.
- Your Property Manager must know the laws in your state and have resources readily available for any difficult situations.
- Ask to see sample forms. Ask if you can have blank copies of the Management Agreement, Lease, and Rental Application. A knowledgeable Manager should be accustomed to giving prospective clients all the information needed to make a informed decision.
Don’t be afraid to ask questions, the more questions you ask, will help you make the right decision for you and your property. Having a your property managed means that you are hiring help, but it should always be clear that you are in control of your property.
Until my next post,
James
If you own rental properties then you are probably familiar with all of the headaches that go with owning, maintaining, renting and repairing your property. It’s amazing how fast a profitable cash flow deal can go negative when the property management is mishandled (link to the resources for our Real Estate Investor Bronze Members). Whether or not you have the resources to support your properties through repairs, evictions, vacancies and the other money suckers that every investor knows… all investors would agree that it’s much better to avoid as many of these costly cash drains as possible.
Many costs of owning rental real estate cannot be avoided. At a certain point in time, every property will need a new roof; when tenants move out, you will need to pay for cleaning, do minor (sometimes major) repairs, and so on. One way to try to mitigate as many of these costs as possible is to minimize the biggest cash sucker of them all: vacancies. Having an experienced property manager in charge of your properties can make a huge difference in this area.
There are two main ways that superior property management can reduce the amount of time that your properties sit vacant, sucking money from your pocket. The first is preventative: place highly qualified tenants in your property to begin with. This is achieved by thoroughly screening prospective tenants. The second is through active marketing and timely management of the clean up to get your property re-occupied as soon as possible.
Many new or inexperienced investors fall into the trap of wanting to fill vacancies quickly at the expense of accepting only partially qualified tenants. While everyone’s personal criteria for what they will accept when screening tenants varies, I can tell you that, for the most part, the stricter you are, the more likely you will be to secure tenants that fulfill the obligations of their lease. While accepting someone with a few blemishes on their credit history may not end in an eviction or a broken lease, I have seen this scenario play out more often than not with less qualified tenants.
Here’s where good property management comes in. If you hire a property manager, they are not going to get emotional about the process of occupying your rental. They have criteria that they will stick to. Many investors, when leasing their own properties often overlook what a tenant looks like on paper and allow the new tenant’s pleasant personality to affect their decision. This is often a mistake, one that a good property manager will not make.
So, whether you hire a property manager, or learn the skills of property management yourself, keep in mind that the single most important factor in keeping your rentals profitable is reducing vacancies. Achieve this through thorough up-front screenings of new tenants and by an aggressive marketing campaign to find qualified tenants to fill your vacancies quickly. Always remember though, it is better to wait an extra month for a qualified tenant than to put a questionable tenant into your property who may need to be evicted three months down the road.
Until my next post,
James
