Dear Claire, How do I manage my rental property?
I’ve had a lot of questions lately about investment properties and how do I manage it? There are two directions that you can go.
Somebody who’s got a hundred unit property, or has multiple units that doesn’t want to have to deal with anything and just wants to come in, there are property management companies. That’s all they do. They usually take about 10 to 15% of the gross rental income. So it’s not cheap, but then you have no headaches. They manage all the repairs. So like when somebody calls in the middle of the night that the water heater exploded, they will take care of managing all of that and they charge you for whatever they had pay for it.
Then on the flip side there is you managing at yourself. We live in a pretty cool city. The City of Portland runs a free landlord training class in both the fall and in the spring, so you can sign up for that. I think the materials that they give you are about $20, so it’s well worth it. If you’re even thinking about becoming a landlord you should definitely go to that class. When you’re managing the property obviously you’re going to be the one that they call when the water heater explodes or if something happens. You’ll save the money that you would be spending on management because you are the management. There are a lot of great resources online for self-management of properties. Multi-family Northwest has documents that are specific to Oregon. So when you’re sending out the lease agreement, you can go on there and download (for a fee) Oregon specific documents. They have all kinds of stuff specific to like if you don’t want smoking, don’t want pets, etc. Then there are a lot of different online companies that you can use; I’ve had some clients use Cozy, or some other basic web services that do a background check and a financial credit checks. The City of Portland class is going to recommend all kinds of stuff and I think that you should definitely screen your clients. You want to know their financial history and know if they have any past evictions. I find that the best case scenario is to find out everything you can before you put a tenant in a property, because once they’re in there if there’s going to be problems, you’re going to want to know it beforehand.
So this is turned out to be very long conversation. There is a lot to think about when managing a property. Of course feel free to reach out to me via phone or email. Comment on our Youtube channel with anything that I forgot that you might think is really imperative or with any questions. I hope you’re doing well and enjoy the sunshine today. Take care.