This is what we do. We didn’t intend to play the landlord game but purchased our condo at a very unfortunate time (i.e. before the market downturn and also just before we unexpectedly moved to California). It hasn’t worked out too badly for us, but I would never have chosen this as an investment. It may in the long term be a win but so far we’ve put more money into it (mortgage, HOA, management fees, etc) then we get out. Even without the property manager it wouldn’t have been profitable, but we decided holding on to the property instead of selling in a terrible market might be better in the long run.
Of course a property manager is essential for us given that the property is in Georgia and we are in California. I’ve never met or spoken to any tenant. The property manager takes care of finding and vetting tenants (although we do sign off on them). We’ve been pretty lucky in this regard, we’ve used the same manager for 4 years now and believe him to be completely trustworthy and competent. At this point we’re pretty hands off: we have never rejected his suggestions for tenants, pricing or maintenance. Everything has seemed perfectly reasonable.
That said, that is no way to run this as a business. I’d have to think that if you wanted to do this as a profitable business you’d actually have to add some value yourself, otherwise everyone would do it. So I’d expect your situation is going to be much more hands on.
As a frequent renter, I’ll note that I’d be willing to pay a little extra rent for a rental managed by an individual rather than a property management company-- the owner’s a lot likelier to come running over when the basement floods on a Sunday morning than the property management company. If you can get decent tenants, and you’ve got the skills to do a lot of the maintenance stuff yourself rather than paying a plumber or carpenter, you might come out ahead. But really, screen carefully. One shitty tenant can lose you years of income in repairs.
I actually agree with this in general (we rent in California). That said, they come with different risks. I expect you’re more likely to deal with slow bureaucracy when reporting a maintenance issue to a company, but more likely to deal with “the crazy” with individuals. We’ve been fortunate (or perhaps have a decent ability to detect and avoid crazy people) in that all the places we’ve rented in California have been owned by sane, reasonable and friendly individuals who not only keep their property in good condition so that there aren’t many maintenence issues in the first place but also respond to the few minor things quickly. I have chosen not to rent otherwise decent places based on a gut feel that the owner would be a pain in the neck (the lady who insisted on “gifting” us the fridge comes to mind).
I can do simple repairs (a loose hinge, a washer on a faucet, replacing a toilet tank float thing, replacing a wall switch, maybe changing a door knob) but beyond that I’d have to call in a professional.
As far as availability, you use Sunday morning as an example. Sure, I’d be available on a Sunday morning, but during the week I work 8 hours a day so if someone were to call me first thing in the morning or during the day on a weekday, a property management company would be much more available than I would be.
Finding decent tenants that pay the rent on time, stay for more than six months and don’t destroy the place- that’s the biggest challenge. My sister and I inherited a rental home from our grandmother and it has been a nightmare. After three tenants from HELL, it has been sitting vacant and FOR SALE for the last three months!
Meanwhile, there are folks such as myself which are law-abiding, regular in our rent, relatively quiet, and actually silly enough to do some of our own repairs who are seeking good landlords!
(Really - I’m looking for new digs. The current landlord is having fiscal troubles just as so many others and is no longer keeping up with this building’s needs.)
Quite true. I’ve had good luck; landlords who mostly want me to pay my rent on time and call them if there’s an issue. Since I’m pretty easy on a house (no kids, no pets, no parties) my landlords have always been very happy to have me. That said, I’m in the sweet spot here-- my landlords have always been involved enough that I can actually get a hold of him when necessary, but I’ve never had an unexpected visit, nosiness, or anything like that.
Sure, but most people work during the week, too. People find house problems when they’re home, not when they’re at work.
I have ‘managed’ the property that my sister and I now own since my grandfather died in 1998. My grandmother owned it until her death last year, but I handled all of her financial affairs including the rental.
A landlord failing to properly maintain a property or make repairs ASAP is simply unacceptable. I gave every tenant the name and number of a local handyman who could handle almost anything (and he’s a childhood friend of mine). They also had my cell number, but he would always call me when they called him to let me know what was going on. The only times I told him to not respond was when it wasn’t something critical and I could repair it myself later that same day.
I also have an exterminator spray quarterly. The rental is located directly across the street from my grandmother’s house (about 40 steps away), so I have both treated at the same time.
I totalled renovated my grandparents’ house and wasn’t sure if I would rent it out or what, but I actually decided to live in it! I’m amazed that 1230 square feet can feel so spacious when I finished knocking down walls…
To add to what has been said…if you live in a city where there are housing courts, drop in one day and talk to some of the lawyers there. In some cities, tenants are allowed to live free withot paying rent, if there is some defect in the apartment-you can lose your shirt on such a deal. SCREEN your tenants carefully-do not rent to anyone with a bad record.
thelpa.com has a lease better than any lawyer can draw up for you and a very informative forum for landlord/tenant issues. Must read before making your decision and as a how-to if you decide to.
Yeah, unacceptable. Earlier this year when part of the roof blew off the building he DID make emergency repairs but they are hastily done, not entirely watertight, and won’t last forever. The problem is he needs to do a permanent repair but I’m not sure he has the money to do so. (He is, himself, a general contractor and quite capable of doing the work himself… provided he can obtain supplies and hire a little help).
So, the situation is not dire, the place is livable, and it’s not an emergency. Nonetheless, I’d like to have a Plan B in the event he is not able to make permanent repairs.