New York City Living & Landlording: Count the Cost
“Suppose one of you wants to build a tower. Won’t you first sit down and count the cost to see if you have enough money to complete it?”
Jesus Christ (Luke 14:28)
Shortly after I graduated college, I moved to New York City (NYC- aka the “Big Apple”). “If I could make it there, I could make it anywhere.” Wow! It was definitely an experience.
Honestly, I was a little scared. All the television shows and movies that had criminals crushing the common folk were in NYC. I grew up in NJ, but my parents really never took me into the big city so I wasn’t sure what to expect. The mafia and gangs could just be waiting for fresh meat to show up so they could take my lunch money every day. Who knew?
Fortunately, my physical safety was never really threatened. My issues were more on the economic side. I wasn’t making much money; I was in a sales job and wasn’t selling anything. My manager nicknamed me “rowboat”… because I had no sales (get it?). The lack of cash inflow was tough.
And the cash outflow required was excruciating. It was the $3.50 for a small apple at the corner bodega. Then buying a round of 5 drinks after work that ran $90.00 (without tip). I used to joke that it cost me $20.00 to cross the street. Geez, it was an expensive place to live!
Good deals were hard to come by. And breakfast at the food cart on the corner of my street was one of them. $2.00 got you a large coffee (with milk and sugar) and a huge cinnamon raisin bagel with butter. It was my go-to meal every morning that I’d take on the subway into work.
One morning, there was a couple in front of me in line at the food cart. I could make out parts of their conversation; it was apparent that they were visiting from the Midwest somewhere. When the man was placing his order I could see him getting agitated. Then he said something that I’ll never forget:
“$1.00 for a cup of coffee??? I’ve NEVER paid $1.00 for a cup of coffee in my life!”
That’s when I knew that he was going to absolutely hate this trip to the big city. I almost felt obligated to get him in a cab (and pay for it) so he could immediately return back home. If $1.00 for a cup of Joe was cause for righteous price indignation, he was due for a heart attack later that day.
He did not count the cost of what visiting New York City was going to do to him.
Unfortunately, the same can be said of being a Charlotte landlord.
The investment real estate gurus preach that you will be a millionaire through rental homes! Buy as many properties as you can! This is the way that you build residual income that will last a lifetime for you and your children’s children!
They just don’t tell you that it is a cash-poor business. All of the above can be true, but the trick is the ability to stay solvent for year upon year as things break and wear out. All the financial models go out the window when a messy eviction happens or your HVAC unit needs to be replaced (just happened to me this month- the dreaded $5K phone call…).
Carpet will not last forever and will need to be replaced. The entire house will need to be repainted at some point. Appliances only last so long. The roof too…
Long term real estate investment can be a wonderful, profitable endeavor (you’ll love your net worth!), but don’t let anyone fool you- it can and will cost you money. So before diving in too far, count the cost. A few miserable days in NYC can be remedied with an early flight home to your 25 cent coffee vendor. Several broken-down rental homes saddled with mortgages in a buyer’s market is a little tougher to navigate out of.
Happy Landlording!
Learn MoreSorry, Draymond- Landlords are Looking for Cool Lovers, Not Fighters
“Blessed are the peacemakers, for they will be called sons of God.”
(Matthew 5:9)
Draymond Green is a great basketball player. There is no denying that. He is a vital cog to the Golden State Warriors and instrumental in them wining two of the last three NBA Championships.
His professional accomplishments are many:
3-Time NBA All Star
2-Time NBA Champion
Defensive Player of the Year
All-NBA Team Member
USA Basketball Selection
But he also has this statistic line: 11, 13, 15, & 15. Those are the number of technical fouls he has received in the past 4 years which puts him among the league leaders. He‘s a fighter who is prone to argue with officials and other players, often to the detriment of his team.
With Draymond and his enormous talent, you take the good with the bad. If he was an average player, he’d probably be out of the NBA for his conduct. But that’s why his coach, Steve Kerr, gets paid $5M/year to channel his “passion” into the confines of a winning basketball team.
Property managers, most who are making well south of $5M/year, also need to make sure they have a “good team” of tenants in the properties they manage. This starts with screening tenants and picking the ones who will pay their rent on time, maintain the property, and get along with their neighbors.
To help determine this, one of the main screening criteria is culling information from past landlords. We sometimes hear some version of this from prospective tenants:
“I gotta be honest- if you call my past landlord, Bernie, he’s not going to have nice things to say. And there’s a simple explanation for that- Bernie is a complete jerk! What a loser. I was the best tenant he ever could hope to have- I mean I fixed the kitchen faucet without even asking for anything from him; of course, I got no love from him. He was just impossible to deal with!”
So, I’m guessing, the tenant is hoping I’m hearing:
- Bernie is not cool. However, the prospective tenant is cool. And it’s tough for cool people to get along with uncool people. If I’m cool, I understand. And I, of course, am really cool, so I understand.
- The tenant can fix a faucet without us sending a plumber
- I am a much better landlord and person than Bernie so I can be confided in
- If the tenant fixes the faucet (or some other repair on his own), show him love. It’s what cool people do and will make it possible for him to deal with me.
However, what I’m hearing:
“I didn’t get along with my past landlord. I blame him for that and have no problem badmouthing him to strangers to further my own ends.”
By contrast, this is what a lot of prospective landlords say about tenants when we contact them:
“Jim and Jane are such a great couple! They always paid their rent on time, took care of repairs on their own, and were such a pleasure to deal with. I’m so sorry they are leaving! Great tenants!”
Jim and Jane sound very cool to me. They seem to value a peaceful relationship with their landlord.
Draymond Green is one of the fifteen most talented basketball players in the world so he can get away with not getting along, at least right now. However, there are 60 people moving to Charlotte every day looking for rental homes, so they are not as rare.
At the end of the day, property managers are looking for cool lovers, not fighters, for their rental homes. Settling for someone like Draymond is just not usually necessary.
Happy Landlording!
Learn MoreLandlords & Lease Renewals: Don’t be Like Spectrum!
First of all, this is not a blog of a Spectrum (formerly Time Warner Cable) hater. I actually don’t have strong feelings either way about them. I was a user of their internet and basic cable and was relatively happy. The service worked decently and the price was reasonable. I put my bill on auto-pay and lived my life.
Then about 6 months ago, I saw a change in my $20.00 basic cable bill (aka the cheapest plan where I get about 10 channels). They started billing me $4.00/digital adapter (I have 2) for some cable boxes they made mandatory for me to use a year or two ago. While $8.00 isn’t life-changing, I brushed up on my middle school math and computed it was a 40% increase. That’s substantial in percentage terms.
Still, changing services is a pain. I could eat a 40% increase ($8 is still $8, no matter how alarmingly you dress it up). I was not pushing the panic button (thank you, hot Charlotte real estate market).
But when that happened, I actually started looking at my Spectrum bill each month. A few months later in the “Spectrum News” section on the front page of it (I didn’t previously know there was a “news” section I could be enjoying each month!), I see the following verbatim:
Your current promotion is ending, but your savings will continue. As a valued customer, we have automatically extended your preferred rate.
(good so far…)
Important Billing Update:
Effective for your next billing statement, pricing will be adjusted for:
- Starter TV Service from $20.00 to $23.89
- Broadcast TV Surcharge from $7.50 to $8.85. This reflects costs incurred from local Broadcast TV stations.
- Digital Adapters from $4.00 to $4.99
Not good.
We’re up roughly another $4.00 on 10-channel TV, not to mention another $5.00 for internet service (not previously affected). I don’t even need to do the percentage math anymore. We’re above a 50% increase in less than 6 months on my lame cable TV plan.
Now, on general principle, I’m trying to leave Spectrum cable TV service due to a large increase which appears to be largely meritless. So I fish out some $10-$20 antennas I bought from Amazon a year or two ago and see if I can make them work. Viola! They work like a charm after I put in a little more effort in this go-round.
I call Spectrum and cancel my starter cable TV service. I won’t lie; it feels good. Injustice was made right! Then they tell me that my internet service is not only going up $5.00 next month, but because it’s not bundled with TV anymore, it is going up another $20.00. Touché Spectrum! I have to have internet service, so they may have won this battle. But I am not a Spectrum cable TV customer any longer.
Unfortunately, now my resolve to rid myself of Spectrum in its entirety has built. I wrack my brain for a solution. Wait! Who was digging up my front lawn 6 months ago to my son’s delight? Google Fiber! They’re boasting $50/month internet service! So my dream of a “Spectrumless” home may become a reality next week.
But… my true thoughts on my mini-“SpectrumGate” are how sad and unnecessary it was. I was fine being a Spectrum customer. I paid my bill every month, they collected the money, and everyone was happy. It just seemed to me that they got greedy were trying to stick it to me.
To be fair, I don’t know Spectrum’s economics. They may be losing money on customers like me and it’s better for them to lose me than to keep me at a lower monthly fee. Fair enough. That’s business.
The purpose of this story is I see landlords use similar tactics on tenants during lease renewals. The tenants pay their rent on time every month and take care of minor repairs on the rental home. But when their lease is up, the landlords try to stick the tenants with a 10%+ increase and additional fees. The tenants feel betrayed and don’t renew their leases on principle. Both parties lose.
We’re in a rising real estate market, I get it. But the grass isn’t always greener on the other side. New tenants don’t always pay the rent on time and take care of the home. Plus the fix-up and other vacancy costs could more than devour any surplus a higher rental rate from a new tenant might offer.
If you have good tenants and are making money, keep any rent increases between lease renewals within reason. There is no reason to endanger the money flow. Most tenants understand that landlord costs go up a little bit every year too.
However, if you are losing money and need to stop the bleeding, I get that too. A rising market could finally bring a new tenant to get bring positive monthly cash flow back into play. Business is business.
Happy Landlording!
Learn MoreLike Dr. Bull, Sometimes the Best Property Management Looks Bad
I occasionally watch the television show, Bull. Dr. Bull, played by Michael Weatherly (formerly the affable “Tony” from NCIS until he left to get his own show), is a “jury consultant” who helps his criminally-charged clients pick a jury who will be sensitive to their plights and vote “not guilty” when the time comes. He and his talented team of specialists measure jurists’ reactions during the trial and change defense strategy based on their body language and other factors.
Of course, like most TV shows, things always go from bad to worse in the first 45 minutes of the show. “The client didn’t tell them he was romantically involved with the deceased!” or “Not only was she the CEO of the pharmaceutical company who would benefit the most from the stolen formula of the new cancer drug, she also happened to be the hired dog walker of the pup who had to have its irritated stomach operated on in which the stolen cancer pills were discovered!” (OK- that storyline hasn’t made the show yet…) But Dr. Bull and his team are inevitably able to pull the strings in the last moment to get the favorable outcome we all hoped for, no matter the odds. Bravo, Dr. Bull and associates!
But real life isn’t always so neat and uplifting. I remember in 2008-2012 we had clients asking us to sell their homes that were saddled with loans that were 25% more than the market value of their houses. So, much like Dr. Bull making magic for his clients… no, we actually couldn’t find anyone to buy them.
But that’s just the part when things go from bad to worse- it’s like TV, right? So we thought like Dr. Bull and came up with the silver bullet to just rent the unsellable houses out in the meantime. Yeah! That will work…. But the market rents (and our fee for management included) left the rental homes negative cash-flowing a few hundred dollars a month for our clients…
Well, this is the season cliff hanger, right? Where things go from bad – to worse – to much worse – before the glorious ending? This is how excitement builds, right?
So our next Dr. Bull-like epiphany is to hold the property for years while it negative cash flows. So, not only are these clients losing a few hundred dollars a month, there are also losses due to repairs, maintenance, and vacancies. And this goes on for years…
OK, this sounds like a downer, a depressing TV show that needs to be cancelled!
But, the funny thing is, I always felt like our best work happened back in those years when it could be argued that the results were the worst. We were able to fund stable tenants in a tough job market and economy to keep income flowing in. But it didn’t look pretty.
I haven’t seen any episodes of Bull where the good doctor gets a slam-shut life sentence case knocked down to only 20 years in prison for his client. Or a 20-year sentence knocked down to 5 years. That doesn’t sell. But, if he wasn’t a fictional character, it might be some of the case work that he was most proud of. There’s maybe some skill in taking really bad situations and turning them around slightly to make them better, albeit still imperfect.
It’s been on my mind as we’ve had some of the aforementioned underwater homes from almost a decade ago sell in the past few months. These long term clients who mucked through some tough market times with us walked out of their closings with $50K-$75K checks in hand. Not too shabby!
So maybe there is a future Bull storyline here after all?
Happy Landlording!
Learn More
Golden State Warriors’s Recipe for Property Management Excellence
The Golden State Warriors won the NBA Championship! They displayed a level of dominance that the league had never seen in its history by winning 16 out of 17 games in the playoffs. And in the only game the Warriors lost, the Cleveland Cavaliers had to set several offensive records to beat them.
How did they do it?
The easy answer is the players. They certainly have great ones- Charlotte’s own Steph Curry, Kevin Durant, Klay Thompson, Draymond Green, etc. With that amount of talent, it could be argued that they could win by managing themselves. From a property management perspective, if you have great tenants who pay rent on-time without being asked and do their own repairs, it makes the job much easier!
But there is something to be said about the ownership group and management (including coaches) that make for a winning organization. It is truly a top-to-bottom effort to become a champion. Ownership and management need to be supportive of each other and have a common vision.
Owners Supporting Management
The majority owners, Joseph Lacob and Peter Guber, treat their employees and players well. When their head coach, Steve Kerr, had back problems the last 2 years (which caused him to miss half of last season and most of the playoffs this year) ownership showed unwavering support. They put no timelines on his return; they just wanted him to come back when he was ready. There was no coaching change controversy. They believed Coach Kerr was the right man for the job and he’s brought them 2 NBA Championships in the last 3 years.
Property management can be viewed the same way. Property managers work for home owners. And sometimes property managers make mistakes. We recently had a longer term tenant who we believe started running an illegal business out of the rental home; we don’t know why and exactly how it started. However, instead of getting angry and blaming us, the owner offered support as we worked to get the tenant out of the home as quickly as possible. We do our best, but will inevitably fail at some aspect of management. Having ownership support gives us the ability to do what needs to be done to right the ship and get back to a profitable equilibrium.
Owners Making Strategic Investments (aka Spending Money)
When the Warriors fell short in the NBA Finals last year, management felt they needed to improve the team; that meant spending and reallocating money on other players. With complete ownership buy-in, management went and signed Kevin Durant to a $54M guaranteed 2-year contract in the offseason. They were willing to spend money to potentially get better. There was no guarantee that Durant would mesh with the existing players (who had already won a championship 2 years prior without him). But they spent the money anyway. And Durant wound up winning the NBA Finals MVP!
Property management is no different. No one likes to spend money; I certainly don’t enjoy spending money on my personal rentals. But strategic investments are necessary to maintain and improve rental properties to keep them competitive against other rentals. When property managers make recommendations to spend owner funds, it is difficult to win when there is constant owner pushback. I guarantee Golden State ownership had financial questions about investing in Kevin Durant, and that is understandable! But no organizations can succeed in the long haul by practicing persistent parsimony (how’s that for alliteration!). And, really, it is much easier to not recommend needed maintenance and upgrades. The Warriors only missed winning the NBA Championship last year by losing Game 7 (so close- and they were even up 3-1 before eventually losing)- but everyone in San Francisco is ecstatic now that the organization didn’t rest on its laurels and aggressively pursued Durant.
The Golden State Warriors and successful property managers share a common recipe for consistent excellence- owners and management working together to make smart decisions for the long haul.
Happy Landlording!
Brett Furniss is a property manager at BDF Realty (Charlotte Residential Property Management), the trusted real estate advisor for Charlotte landlords & Home of $100 Flat Fee Property Management. BDF Realty utilizes their innovative Pod System for exceptional customer service in residential property management, home repairs, and home sales for single-family homes, Uptown condos, and town homes in the Charlotte-Metro Area. Contact Us Today!
Learn More“Rudy” is a Great Movie, Just Not a Great Rental Application
Rudy Ruettiger (aka “Rudy”) was the subject of a great movie in 1993 about his improbable story of getting into Notre Dame and then playing on their football team. It’s a true testament to the human spirit as he played high school football (not recruited), went to the Navy for two years, worked at a power plant for two years, and then after not getting into Notre Dame for low grades, went to Holy Cross College for two years before being admitted to Notre Dame on his 4th try! Whew!
Then he walked on to the football team and made it(!), got beat up on the scout team every day at practice, and then got on to the field his last game and picked up a sack. What a story!
Of course Hollywood embellished the story a little bit as Joe Montana, a freshman quarterback at Notre Dame at the time, said in an interview. No players were taking off their jerseys demanding that Rudy get in the game, it was typical for seniors to get into the last home game, and the players carrying Rudy off the field in triumph were just playing around. And Rudy’s legendary work ethic? “He worked his butt off to get to where he was and do the things he did. But not any harder than anyone else,” Montana said.
The truth is that Rudy should have never gotten into Notre Dame due to his bad grades (4 tries! Where did he get the money to pay the college application fees? Does “no” ever mean “no”? Did he finally get an admission officer who was napping?). He never should have been on Notre Dame’s football team (He was 6 years older than everybody else. He was 5-foot 6 inches tall and 165 pounds! He’s lucky he didn’t get killed in practice.). “Rudy” should have never happened and a movie was made about him because somehow it did.
As a Charlotte property manager, we sometimes get rental applications that I feel might have been inspired by Rudy. And I’m not saying that to be mean. I really feel that if we approved some of the applications we received, we’d essentially be ruining the applicants’ lives. For example:
We had a rental house on the market for $1,400.00/month. We received an application where the prospective tenants had several credit cards almost maxed out, they had been late 8 of the past 12 months on rent, and the rent they were currently paying was $1,000/month on a smaller house. How was adding $400.00 in additional rent (not to mention higher utility costs for a bigger house) a responsible move for anyone- landlord or tenant? It would just have made life much harder for everyone.
Even as romanticized as Rudy was, the chances are no one would have wanted Rudy’s life prior to running through the tunnel and getting into his one Notre Dame game. He was studying all the time to pass classes that were too difficult for him, while walking around with a beat-up body from banging into guys that were too big and strong for him to compete against.
Rudy may have learned character, perseverance, and many other worthwhile traits (while being the subject of a great movie!), but it was a hard journey. He was able to walk away with a Notre Dame degree, a great memory, and a lucrative speaking career after the movie came out. But I’m not sure there are any rewards for taking on more housing payment than one can afford. It’s stressful, and hurts families and relationships. Usually, it leads to evicted tenants and fired property managers.
We all want to root for the underdog, but Rudy is best seen in the theaters and not experienced in real life. Denying unworthy applications can sometimes be a great act of kindness.
Happy (& Responsible) Landlording!
Learn MoreThe Rental Bachelorette: What is She Looking For?
“I would just want someone who is genuine and makes me laugh and is my best friend and ultimately someone who is going to love me as much as I love them.”
Former Bachelorette JoJo Fletcher
JoJo apparently found that “someone” in the arms of NFL quarterback Aaron Rodger’s brother, Jordan, in the last season of the Bachelorette (so says the cover of a tabloid magazine next to Harris Teeter’s cash register). Good for her!
Many people have differing ideas on what women want from prospective male suitors. I’ve seen some lists as short as:
- Rich
- Good-looking
This list is written for the rich, good-looking guys typically by the less rich, less good-looking, jaded guys.
And there are some deeper lists written for the less affluent, average-looking guys (who might buy magazines with articles like this). This “Top Ten” list is courtesy of www.topyaps.com:
- Not being desperate or clingy
- Being a friend first
- Manners & hygiene
- Respecting her space
- Chivalry
- Sincerity & loyalty
- The ability to protect
- Sense of humor
- Intelligence
- Honesty
Wow! That’s a much tougher list to mull over. At first glance, it seems like I’ve blown it in the past by actually following items #1 and #4 by “not caring” and “being distant.” But I digress…
As a Charlotte property manager, this is a question we get often from potential tenants:
“Before I spend $75.00 on a non-refundable rental application, what are you looking for?”
The three things we are looking for in potential tenants for our properties:
- Pay rent on time: #1 criteria
- Maintain the property: change air filters, mow the lawn, make reasonable repairs on your own, etc.
- Get along with the neighbors (and property manager!)
If tenants can do these 3 things, we will like them a lot and the tenancy should go very smoothly.
Tenants do not need to be rich or good-looking, but we’re always impressed with chivalry and a sense of humor.
Happy Landlording!
Brett Furniss is a property manager at BDF Realty (Charlotte Residential Property Management), the trusted real estate advisor for Charlotte landlords & Home of $100 Flat Fee Property Management. BDF Realty utilizes their innovative Pod System for exceptional customer service in residential property management, home repairs, and home sales for single-family homes, Uptown condos, and town homes in the Charlotte-Metro Area. Contact Us Today!
Learn MoreLove, Kindness & Gratitude: Setting the Tone in Property Management
“Beloved, let us love one another, for love is from God, and whoever loves has been born of God and knows God. Anyone who does not love does not know God, because God is love.” I John 4:7-8
Man, it’s nice when people are nice.
We have a tenant, Monica, who just goes out of her way to be easy to work with. If we need her to do something for us, she does it. There is no complaining, back biting, or procrastination. Communication with her is a joy. And she is soooo nice and gracious. When we perform repairs (aka our job), she is so gracious and thankful. Her rent is always on time. She and her family go out of their way to perform maintenance to the house. And at the end of her positive and funny e-mails, she always includes the Bible verse above.
We have another client, Mike, who goes out of his way to compliment us for working on his home; once again, for just doing our job. Small things don’t escape his notice. His level of graciousness is astounding. Truthfully, we should be thanking Mike much more than he thanks us. We made a good amount of money working for Mike: we helped him buy houses, repair them, manage them, and finally, sell them. These are all things we collect fees for. But he would let us know how much he appreciated our efforts, even if the work was imperfect at times.
I think back to how our relationships started. It would be easy to say that they were “good folks” and that they get along with everyone (they probably do!). But why?
They set a positive tone with us early. Early conversations were easy, paperwork was complete and accurate, and meetings were punctual. They were easy going about details as we got to know each other. They got the things they needed from us, but their requests were made in a graceful and kind manner.
Property management can be a difficult business. At the face of it, a property manager is the middle man between two parties with divergent interests, the owners and tenants. Both would prefer that the other party pay for anything that breaks. The owners want the rules of the lease followed precisely to protect their investments, while the tenants want to use the house as they see fit. The property manager is hired by owners and is tasked with protecting their investments, but can’t get it done well without tenant involvement and buy-in. It’s a balancing act that produces many colorful (and costly) stories of when the relationship breaks down.
But Monica and Mike also show that it can be a rewarding business with warm relationships.
As the property manager, our job is to always set the tone early with kindness, love, and gratitude. The tenants need to feel this from us, their point of contact, from the moment of their first inquiry. Even if we wind up having to reject a tenant application, we can do it kindly. But if we wait for the clients to set the tone, it might not happen. And it needs to.
So set the tone early! This will allow landlords to reap the benefits of a mutually fulfilling partnership and make property management a joy.
Thank you to our clients (Monica, Mike & many others) who make coming to work a pleasure.
Happy Landlording!
Brett Furniss is a property manager at BDF Realty (Charlotte Residential Property Management), the trusted real estate advisor for Charlotte landlords & Home of $100 Flat Fee Property Management. BDF Realty utilizes their innovative Pod System for exceptional customer service in residential property management, home repairs, and home sales for single-family homes, Uptown condos, and town homes in the Charlotte-Metro Area. Contact Us Today!
Learn MoreBeing a Duke Hoops Recruit & Landlording: YDKWYDK
As much as I hate to admit it (being a UNC guy), Duke University is a worthy rival on the basketball court. A big part of that is their ability to recruit great high school players. They go after the best of them and have been very successful in landing them in Durham. Many of them were so good that they only played one year at Duke and then left early to play in the NBA for millions of dollars.
But, for others, it didn’t work out that way.
Point guard Derryck Thornton was one of those Duke recruits. He was an esteemed 5-star recruit who was finishing his junior year of high school in 2015. Duke was thin at point guard for the upcoming season and they convinced Thornton to “reclassify”; this allowed him to graduate early from high school and join the Blue Devils for the 2015 season.
It was a great honor. The defending national champions needed him to come early and play. He was only 17 years old! So he said “yes”, enrolled at Duke early, and was starting at point guard. It seemed like he had the world at his fingertips!
But, YDKWYDK (You Don’t Know What You Don’t Know). A year later (when he originally should have been starting school at Duke), Thornton was transferring out to play basketball for the USC Trojans. It was allegedly a combination of factors he could not have seen coming: his freshman year didn’t go as well as they had hoped, certain Duke players inexplicably didn’t go pro (that would have made more playing time available to him), and other more heralded recruits joined the 2016 team. He went from being really needed to being really expendable. So he was gone.
YDKWYDK. By definition, it’s hard to protect yourself against the unknown. This is especially true in property management when there are so many variables; renters (people) are complicated and they are all so different! It’s best to have someone who might know what you don’t know because they’ve been there before. Experience counts!
I know I’m biased towards using a property manager, but I understand the self-management side of it as well; I’m all for saving money! It’s cheaper if I fix the sink, as opposed to my plumber, but what about if I miss something and it causes a leak behind my wall? Then I’ve got a bigger, much costlier problem. YDKWYDK
And if property management is merely a hobby, it’s really tough to know what decisions can be costly down the road:
“My friend/co-worker wants to rent the property. He seems like a good guy. Should I rent it to him?”
“Should I allow any pets in my rental home? If so, which ones are okay?”
“Is it important to do credit checks? If their score is low/high, is that an instant denial/approval?”
“Do I need to do home inspections? If so, what am I checking for?”
If Thornton had been told in 2015 that he would be transferring to another college after his freshman year at Duke, he probably would have had a good laugh. But it happened. The same can be said of many decisions being made today by landlords who dabble in property management; the unforeseen long-term costs of seemingly innocuous choices might make the expense of having a property manager seem very reasonable!
YDKWYDK. Happy Landlording!
Brett Furniss is a property manager at BDF Realty (Charlotte Residential Property Management), the trusted real estate advisor for Charlotte landlords & Home of $100 Flat Fee Property Management. BDF Realty utilizes their innovative Pod System for exceptional customer service in residential property management, home repairs, and home sales for single-family homes, Uptown condos, and town homes in the Charlotte-Metro Area. Contact Us Today!
Learn MoreReplace the Butter with Margarine and Nix the Washer & Dryer Please
Americans demand to have their food made-to-order. We no longer live in a culture where you eat what’s put in front of you; rather if you don’t like an ingredient and would prefer to have other ingredients instead, it is deemed socially acceptable to make the food preparer bend to your individual whims. Burger King based a multi-million dollar advertising campaign on (and trademarked the phrase) “Have It Your Way,” and now every restaurant does the same. I feel for the workers in the restaurant industry who have to put up with all of us creating our own menus.
I read an article about how the French chefs despise American tourists even more now. We walk into their 5-star restaurants, look at the menus (which we expect to be written in English), and have conversations like this:
American Tourist: How’s the escargot?
French Waiter: Magnifique!
Tourist: What are the snails cooked in?
Waiter: Excusez-moi?
Tourist: I mean, I’m trying to cut down on butter, so I’d prefer the chef uses low-fat margarine… butter is bad for the heart, you know. And garlic gives me gas, so let’s cut that out too if it’s in there… Try to keep the salt to a minimum. And were these snails bred and treated humanely before bring cooked?
Waiter: Sacre bleu!
This thinking has permeated into real estate as well. At BDF Realty, we were selling a house for one of our Charlotte property management clients. An investor came on to the scene who loved the house and wrote a contract to buy it. It was a great offer and we wound up accepting it with minimal negotiation. However, the investor did have one demand that caught me off guard and was not negotiable- the washer & dryer needed to be out before closing.
Now, if the washer & dryer were on their last legs, I’d understand. But our client had bought these about a year ago; it was a nice set that worked perfectly. But the investor was adamant that they needed to go. So, it made me ponder: why wouldn’t the investor want these as an asset for his future tenants?
I thought about the prospective Charlotte tenants who contact us to rent our houses. Not many of them ask about a washer & dryer. I don’t think we’ve ever had a deal fall through because a house didn’t have them. We’ve had conversations with prospective tenants about the issue of moving the washer & dryer that was already in the house so they could use their own that they were bringing (that’s a pain!). And having a washer & dryer in the house didn’t allow us to charge more rent.
Furthermore, I recall the repair requests we get from tenants who have washer & dryers our owners provide. We send out appliance repair people that, at times, have cost our owners hundreds of dollars. Sometimes the washer & dryers are not repairable and have to be replaced which costs our owners even more money and drains their ROI.
So, if tenants don’t act like they want washers & dryers and it costs our owners money to have and maintain them, maybe this investor was on to something? He makes a compelling case to get washer & dryers out of rental homes and let the tenants fend for themselves.
Maybe it is smart to “have it your way” when you’re buying. Experts do say that too much butter is bad for the heart!
Happy Landlording!
Brett Furniss is the head property manager of BDF Realty (Charlotte Residential Property Management), the trusted real estate advisor for Charlotte landlords & Home of $100 Flat Fee Property Management. BDF Realty utilizes their innovative Pod System for exceptional customer service in residential property management, home repairs, and home sales for single-family homes, Uptown condos, and town homes in the Charlotte-Metro Area. Contact Us Today!
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