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Did you use a realtor to find a tenant for your NOVA property, or did you go it alone? Do you use a property management company, or do you go it alone?
We have a townhouse in Lake Ridge we need to rent out, but I've never had any experience with property management at all and am at a bit of a loss as to where to begin or how to go about it. The realtor through whom we purchased our current house said they could list/show the townhouse and screen tenants and all that jazz for the cost of only one month's rent, so we'll probably go that route since we don't have the time or resources to screen applicants ourselves.
Location: Chapel Hill, NC, formerly NoVA and Phila
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Jillybean, we just became landlords in NoVA in May! I had the exact same hesitations that you do. I'll tell you what I did. So far, it has worked out great!
-We went back and forth between doing it ourselves (finding a tenant and the management of the house) or getting a property management firm. We decided to try doing it ourselves first, and go with the property management if we couldn't do it on our own.
-One of my friends in the miliatary rented out her house on AHRN, which is a site for military personnel to find housing. It is free to list there (even if you are not military). That might be a good option for you. For us, it wasn't the greatest fit, because most military want the option to do a 2nd or 3rd year, and we were pretty sure it was a 1-year deal for us. After one year we want to either sell or move back. But, the great thing about this site is that the people searching are employed! with steady jobs! And if you want a longer term rental, it might work out great for you.
-About a week after listing there, we decided to add militarybyowner.com. I always see it mentioned here, and thought it would be a big audience. We did the full listing with 12 pics for $79.99. We got some looks and calls, but ultimately, we did not get the traffic from this site that we thought we would, and it was not worth the cost.
-We were hesitant to do this, but lastly, after about 2 weeks on the above two sites, we put our ad on Craigslist. I was a bit nervous, but reputable realtors advertise on here, and our house was empty, so I figured we really had nothing to lose. This was the motherlode of traffic for us, and ultimately where we found our tenants. I have to say, I never had a quack or other unsavory character contact us. Everyone seemed legitimate. We really had nothing to be scared of listing it on CL. Ultimately we found two possible tenants and several more who were interested from CL. From there, I kind of went with my gut. The first possible tenant seemed like a pain in the butt at the getgo. Then the second one came along. He sounded very nice on the phone, had been transferred to DC temporarily, and was already living in the area. (Lots of calls were from people who had not yet moved to NoVA, so I felt hesitant to rent to someone who hadn't actually checked out the house). I ran a credit check on him, called his employer, and his former landlord. All looked good.
-I read up on property-tenant laws in Fairfax County, printed out a lease from an online source and actually did everything long distance. He and his family have been great! My neighbors have had nothing but nice things to say about them. Our rent is always on time. And the one problem they had, they called the contractors, paid for it, gave us the bill and just subtracted it out of the rent. They are the type that fix the small things and don't bother us about it. In fact, we never hear from them except for them sending us our mail that didn't get forwarded.
So, ultimately we did it all ourselves. If things go wrong, I plan to call the contractors. I think the property managers would pretty much only be putting into a call to contractors for me if something went wrong. For 8% per month, I don't think it is worth it.
My thoughts:
For the 3 weeks that it took to rent out the house, it WAS time consuming. I do not have a job, so I was able to spend lots of time reading up on property laws, looking at the C-D renting forum and other sites, talking to others who were experienced landlords, handle the phone calls, uploading the pictures, sending emails, doing the credit check, filling out the lease, etc. But I could see how someone with a job would not have the time.
On the other hand, I firmly believe that a property manager would not necessarily have gotten me such a good tenant. I felt like I could tell a fair amount from my phone conversations with the potential tenants. And I would have felt left out of the loop if someone else did the screening for me. The first potential tenant met the income requirements, but certain things sent up a red flag for me. I think he would have been a nightmare tenant, and I don't know if the property management firm would have realized it. Maybe they would have, I just don't know.
My takeaway is, have faith in yourself that you can do a good job, read as much as you can about it renting out your home, and trust your gut instinct.
Did you use a realtor to find a tenant for your NOVA property, or did you go it alone? Do you use a property management company, or do you go it alone?
We have a townhouse in Lake Ridge we need to rent out, but I've never had any experience with property management at all and am at a bit of a loss as to where to begin or how to go about it. The realtor through whom we purchased our current house said they could list/show the townhouse and screen tenants and all that jazz for the cost of only one month's rent, so we'll probably go that route since we don't have the time or resources to screen applicants ourselves.
Tips or suggestions?
We rent two condos through craigslist. Never had a problem. I trust myself to screen people more than I trust a real estate agent.
15 years ago, we had to rent our townhouse. We were planning to trade up, and at the time, the market was a buyer's market so our townhouse didn't sell. Our intention was to rent it out until the market changed to a seller's market.
We decided to go with a property management company for a variety of reasons:
1) They would screen the tenants.
2) If there was a problem in the house, the tenant would call the property management company. We liked that as we didn't have to have any direct contact with the tenant. Plus management companies have a list of companies that they can call on when there are problems.
3) They would be better able to judge what a fair rental price would be.
The downside was that they did take 8% of the rent money as a fee. Also, the first company we used (a branch of a major realty company) had a ditzy woman who managed our property. I was amazed at just how little she knew. We ended up dumping them and going with a smaller company. The smaller company did a better job. My one problem with them --- when we decided to sell the property and give plenty of notice to the tenant, the tenant called up the management company to beg for a few more days in the house. The management company asked for it, we said "no", they said "but she's sick". I'm sorry that the tenant was sick but the management company worked for us and shouldn't be trying to lay a guilt trip on us.
In the end, we were glad to finally sell the property. Since we sold it in a better market, it sold in 3 days.
Owning rental properties isn't for everyone. Many people enjoy being a landlord and don't mind the headaches that can come with it. For others, like ourselves, it was something that we could do without.
If you do become a landlord, make sure that you have money in reserve to handle any problems that come up in the property. Also, make sure that the tenant has renter's insurance. One thing I liked about using a property management company is that they will insist on the tenant having renter's insurance and will make sure the tenant has it before signing the lease.
We get tenants on craigslist. Manage our own properties. Just make sure you call the references, the employer and do a credit check. Instead if spending 8% on a management company, we have home warranties on all of our properties in case there are maintenance issues. That's worked great because we don't have to fumble around looking for plumbers, electricians, etc. The warranty companies have contractors they use.
Thank s so much for the responses so far - great inputs!
I don't think we'll go the route of property management for the monthly fee simply because, quite frankly, what we can rent out the townhouse for will still not cover our monthly mortgage + escrow payment, so we're still going to be shelling out about $5-600 each month even when we do have a tenant. I don't want someone else taking another cut!
That said, I do think we might still use a realtor to find a tenant. My husband and I both work full time, my husband takes classes at NVCC (which means homework even on non-class nights), and we have a 5-month-old who takes up any "spare" time we do have (plus fun things in our new house like how we just had to unexpectedly have our water heater replaced...). I agree with points here that I would probably be a better judge for screening than a realtor who doesn't own the property and who will only do things "by the book" as opposed to following their gut, so I really wish I had the time to do the screening myself, but I just don't think it's feasible. The beauty of Lake Ridge is that it's reasonable commuting distance to both Ft. Belvoir and Quantico (one of the neighbors is actually military), so I think we'll start by posting on the military sites (not that military automatically means good tenant, but I feel it's a lower likelihood of a disrespectful tenant). I do already have a sample contract that a realtor sent me, but I do think I need to do some additional researh on landlord requirements in PWC.
Quote:
Originally Posted by mdcrim
We get tenants on craigslist. Manage our own properties. Just make sure you call the references, the employer and do a credit check. Instead if spending 8% on a management company, we have home warranties on all of our properties in case there are maintenance issues. That's worked great because we don't have to fumble around looking for plumbers, electricians, etc. The warranty companies have contractors they use.
This is exactly what one realtor suggested to us. I actually just got a recommendation for a home warranty company from a friend at work who likes hers.
We rented out our house a few years ago, with no significant problems. Also found our tenants via CL. One was super-responsible; the other was kind of flaky and annoying. (Ew, there are crickets in the unfinished basement!) We basically only asked for paycheck stubs (to verify employment and salary) and got lucky. If we had it to do over, I would call references and former landlords--but we were in somewhat of a hurry.
So I agree: If you make some phone calls, run a credit check, and get first/last months' rent plus a solid security deposit, you should be OK. If you're going to be living out of the country, I wouldn't do it.
I'm not impressed with property-management companies. We had to deal with one that manages a neighbor's house, after their tree fell into our backyard during the derecho and damaged some of our property. The company had failed to inform the owners of anything, even two weeks after the event.
Our thought process and experence was pretty similar to michgc's except we found our tenants on military by owner. I agree with the comment earlier that a lot of people there want a 2 or 3 year lease since that is how long they will be in the area. They will usually also want a military clause that says they can break the lease if they get orders out of the area.
We felt we could do as good or a better job screening applicants than a propoerty manager would. I don't see what they would do that we couldn't do for ourselves like running a basic credit and background check and contacting references.
We used a standard rental agreement which is the same thing a manager would do. We had a family member who is a lawyer look it over, but it is basically just boilerplate language.
Showings were time consuming. Especially on the weekends, we had several instances where people called us up and asked if they could stop by in a couple of hours. I don't see how this would be that different with a manager except you might miss some opportunities for showings if people can't reach the manager right away or have less time to pick up before the showing since there is an additional layer the communication has to go through. We rented our place in two weeks and had several more people interested when we signed the lease.
We did the home warranty thing and also already had a list of contractors we had used in the past. For the couple of times there was a repair covered by the warranty, the tenants called us and the warranty company and then took the deductible for the service call off the next month's rent. When there was a repair not covered by the warranty we called up a contractor we had used in the past and made arrangements. I don't think a manager would have added any value with this and might have just made things more complicated and time consuming.
I just don't see where a manager is worth the cost in this relatively strong rental market, especially if you are still living in the area and are only talking about 1 or 2 properties.
We're not planning to use a property manager. I'm planning to use a realtor just to find the tenant, and then the property management is up to us. Once they find a tenant, they are no longer involved. They just handle listing the property, taking photos, doing showings, screening applicants, etc. We do not have the time to talk to applicants, run credit checks, call references, do showings (we now live in Sterling, so the Lake Ridge townhouse is 45-60 minutes away)...trying to coordinate with contractors to get the property ready to list has been a nightmare enough!
We use a property management company, but we do not live in the area, so for us, this makes sense. As for finding a tenant, I do not think the property management company really did much other than list in a few locations (MLS, CL, and MBO). They did the credit check, background checks etc., which would be difficult for us to do living out of the area. Also, when there are issues, the property management company deals with them as opposed to me getting a phone call at 3am. We both work full time and have kids, so dealing with rental issues are not something we want to do. We are able to rent to cover our mortgage and property management fees, though.
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