Every Landlord Should Have ThesePeople On Their TeamBy JD Esajian on July 12, 2019
For many real estate investors buy and hold is their primary strategy. Instead of getting involved in short term fix and flip deals, they focus on long term rental properties. As much potential upside as rentals offer, they are not without some potential problems. Issues with the property, tenants and maintenance can make an average rental property turn into a nightmare. Depending on the problem it can drain you of time, money and focus. Before too long you will look to simply get out of the property and move on. Fortunately, this is the exception and not the norm. With the right team around you, owning a rental property can yield tremendous long-term gains for years to come. The better your team, the easier owning a rental will be. Here are five people that every landlord should have on their team.
- Birddog: The first step in buying a rental property is finding one. Much of the success with a rental starts with getting the property at your number. Not every property makes a great rental. You need to understand all the expenses and numbers and if they don’t work walk away. You should have a handful of reliable lead generation sources. It is not enough to rely on your real estate agent to find good deals. A birddog is someone who will pour through fsbo listings or find disgruntled landlords online. They will tee the deal up so all you have to do is step up and knock it down the middle. For whatever fee you work out, it is worth it tenfold in the long run. Finding good rental property deals that generate cash flow and hold potential appreciation are worth it. Get someone on your team who is motivated to make money and find good deals.
- Lender: Financing for buy and hold properties are not the same as quick flips and rehabs. For rehabs you are only looking for short term capital and don’t necessary care as much about the rate, fees and costs. You know that you will only need the money for a few months and will turn it over quickly. For buy and hold deals you will need long term capital for as many as 30 years. It is a good idea to connect with a few local lenders to get as many options as possible. A mortgage broker has access to many banks that can change the down payment and credit score requirement. Depending on the number of units you will be forced to put down anywhere from 10-25%. Local banks are better with straightforward, single family properties. You may be able to find a better rate with reduced fees. You should also reach out to local credit unions to see what programs they offer. The more lending options you have the more likely you will find the best program you. On a long-term loan, a half a point can equal thousands of dollars over the life of the loan.
- Attorney: Owning the property is just the beginning. Before you get to the closing you need a good attorney who will protect your interests. Not knowing something on the contract, or with the town, can throw a monkey wrench in your plans. It is imperative that you reach out to a dedicated real estate attorney. The best trial lawyer isn’t a good option in a real estate dispute. It is also important that they can walk you through constructing your lease and potential tenant issues. You probably want to get tenants in your property asap but you need to protect yourself. The wrong language on a lease or omitting a section can cause real problems down the road. Sure, you can find a generic lease online for free but paying a few hundred dollars for an ironclad lease is worth every penny.
- Property Manager: There are a few different ways you can go with rental property management. The most common is to manage the property yourself. If this is your only rental, your job offers flexibility and you are handy enough to tackle maintenance issues, this should be a consideration. However, even if this is the case you should still consider a dedicated property manager. A property manager handles almost everything with the property. They will find and screen tenants, schedule maintenance issues, collect rent and much more. Most property managers get 10% of the monthly rent received. Depending on your situation and level of involvement with the property this can be considered a bargain. Even if you want to try managing the property yourself, you should still talk to a property manager and find out what they can do for you.
- Handyperson: Whether you have a property manager or not, you are still going to need to find a handy person. In every rental property there will be the occasional clogged toilet, broken lock or busted dishwasher. Having someone you can call in a pinch that can quickly make it out to the property is essential. The longer you make your tenant wait the more the will lose confidence in you. This can lead to a hold up in the rent and not telling you about minor house issues. There are plenty of good handy people in every market. Line yourself up with a few you know can do just about everything.
The stronger the team around you the easier rental property management will be. At a minimum, find these five core members and start from there.