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Caleb is our third landlord to be featured in the Landlord of the Month series. In his quest to become a property owner, he stumbled into becoming a landlord. He now uses Avail for all aspects of managing his rentals.
How did you get into the business of owning rental properties?
I was entering my late twenties and wanted to buy a place of my own. I could only afford to buy a condo by myself, but condo living did not suit me at all. I had been living on the north side of Chicago with one of my best friends for 3.5 years in the first floor unit of a two unit house, and had grown fond of the little yard and deck we had, as well as the parking spot. I decided I wanted to continue living this way and stay in the city, but couldn’t afford to buy a free-standing building with these amenities. I immediately thought of buying a multi-unit building that would generate rental income to supplement the mortgage payment. Still, I did not quite have enough money for the required down payment, so I decided to solicit my single friends who would be willing to be roommates and landlords together. One of my friends agreed and seven months later we closed on a 3 unit, turn-key brick building in December 2010. We currently live in the first unit and rent out the other two units. It’s a pretty good living situation because I have my room and bathroom on the first floor, and the co-owner has his room and bathroom in the duplexed lower level. In preparation for the future, we developed multiple exit strategies such as selling the building on the open market, buying each other out, or holding and renting out the entire building, just to name a few. Over all, it’s been one of the best decisions I’ve ever made.
What has surprised you the most about being a landlord?
How much some repairmen charge and the subsequent money I would lose if I didn’t do some things myself.
How much time do you spend on your rental properties?
The most predictable, but most time consuming activity is spent getting new tenants. The longest time I’ve spent searching for a tenant (from existing tenant notification to new tenant signing) was 3 weeks, the shortest was 4 days, and I’ve averaged slightly less than 2 weeks. I’ve had success just using Craigslist, but it’s a fair amount of work communicating between all the prospects, as well as being considerate of the existing tenant in order to coordinate showings. Until a new tenant is signed, I average 3 hours a day between inquiry emails and showings. Regular maintenance for me is limited to yard work and snow removal. During the spring and fall I average 15 minutes a week and in the summer 45 minutes a week in yard work; in the winter, I average one hour a week shoveling and putting down salt. Since this is also my home, I don’t consider that type of regular maintenance extra work. Any other time I spend is on ad-hoc repairs, which if I can’t complete myself in a few evenings working a couple hours each night, then I hire a professional.
Did you ever consider hiring a broker or professional property manager to help?
I never considered hiring a professional property manager because that’s not necessary for only two rental units, especially when I live in the building. The idea of hiring a broker to rent out my units was completely off the table when I found out that brokers charge one month’s rent each time they sign a new tenant. For me, that’s too much money to spend for something that I can complete myself with a little work. It’s been over 3 years and both units haven’t gone a day without being under lease.
Are you looking to buy more rental property, or do you think you will in the future?
I’ll definitely buy more rental property in the future.
What’s the biggest mistake or regret that you have regarding your rental properties?
Not calling out the inspector we used for the purchase of the building. The co-owner met with him and told me the inspector did a thorough job, but he did not bring a ladder (we do not have any other way to access the roof) and we still paid him for his services without him inspecting the roof. I should have insisted that the inspector come back, but I think we got caught up in so much other closing stuff and we rationalized it because we had documentation from the seller of the roof’s last resurfacing from a few years prior. Turns out that the roof did not need any repair, but we may have been able to identify maintenance areas that could have been used to further reduce our purchase price.
What’s one tip or piece of advice that you want to share with other landlords?
Never pay contractors more than half for a job up front. Check all work completed before contractors leave and don’t be afraid to ask them to redo something that is not done right. Check the work again, then give them the final payment once you’re happy.
How do you deal with repairs and maintenance requests?
As mentioned, I only hire a professional if I can’t do something myself.
How does technology play into your rental business?
Craigslist and Avail are essential resources for my rental business.
Finally, you’ve been using Avail for over a year now. How has the software helped you?
One of the most critical pieces of any rental property is the lease, and Avail completely relieved my concern of using a lease that may not cover every necessary aspect by offering a lease template that has been reviewed by a legal professional and is compliant with all the rules and regulations of Illinois and the city of Chicago. The template is exactly what a landlord needs and is also customizable, so I can add anything I want. I really like that the lease can be signed electronically, which eliminates the need to schedule an additional meeting when new tenants are ready to sign and allows me to finalize the leasing process as quickly as possible. The software is designed so well that it even coordinates the electronic signatures of multiple tenants on the same lease before being sent to me for countersignature. Avail is a great organizational tool that has tremendously improved my record retention and accessibility to tenant files. Before Avail, I would have to be in my office and pull hardcopies in a filing cabinet just to check when a lease expires; now I can instantly check a lease from anywhere simply by logging onto the Avail website. Also, having a standard application that I can send to prospective tenants to complete online is another nice element I can use to collect all the basic information. The application does not require you to add the credit and background check feature, but I always include this option to be on the safe side, and it’s free for landlords because the prospect pays the fee. I love Avail’ online rent payment feature. Not only did it eliminate my trips to the bank to deposit checks, but it reduced the work for tenants to make payments as well. It’s more convenient for tenants to pay online from anywhere, versus dropping off or mailing a check. Using this software also allows me to receive payment sooner. Tenants can choose to login every month to pay or set-up automatic payment, which will obviously prevent a late payment. Furthermore, even if a tenant does not select automatic payment, I’ve found that late payments are no longer an issue because the system sends the tenant (and landlord) an email as a reminder to make the payment before reaching the overdue date and incurring a late payment fee. Avail has streamlined my rental business and made it much easier to manage in all aspects. I look forward to leveraging Avail as a scalable tool to help me expand with additional rental properties in the future.
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Elliot is the second landlord to be featured in our Landlord of the Month series. He uses Avail to manage the condo that he purchased prior to getting married. He has been a Avail customer for about 18 months.
How did you get into the business of owning rental properties?
I purchased a one-bedroom condo into the West Loop before I got married. After my wife and I moved into this condo together we decided that it was too small for the both of us. After finding a larger place to live, we evaluated the condo market and decided that financially it was better to rent out the condo than it was to sell it.
What has surprised you the most about being a landlord?
I have to say being a landlord is not as time consuming as I would have thought. Once we found a tenant for our condo, the only thing we have had to do is some minor upkeep of the condo. The key is to make sure to take care of any problems with your unit in a timely manner.
How much time do you spend on your rental properties?
I spent a few hours putting together a listing for the condo, showing the unit to potential tenants and fixing a few things before the move in. On a monthly basis, I spend about 30 minutes to make sure the rent payment was processed from the tenant and check email to see if there are any issues that need to be addressed.
Did you ever consider hiring a broker or professional property manager to help?
I considered hiring a broker until I learned about the costs involved. In Chicago, a professional manager will charge one month’s rent for finding a tenant and an ongoing 10% monthly management fee. For the little bit of time and effort it would save, I decided I could do it myself. The condo is close to my work and not too far from home.
Are you looking to buy more rental property, or do you think you will in the future?
I am looking for additional rental properties at this time. I will definitely use Avail for any further properties I purchase since it makes the whole process so much easier and has everything I would need to be a good landlord.
What’s the biggest mistake or regret that you have regarding your rental properties?
The biggest mistake would have to be not finding a handyman before renting out the unit. Having someone who is always available to fix small issues in your unit is key for any landlord. When there was an issue in our unit, I had to scramble to find someone to fix a broken sink at the last minute.
What’s one tip or piece of advice that you want to share with other landlords?
The best advice I would have is to make sure to properly screen any perspective tenants and to be selective. It is your property and you do not want anyone destroying it.
Editors note: Avail has blog posts with tips for screening tenants: Five Questions You Must Ask Your Potential New Tenants, Look Out for These Red Flags When You Show the Apartment to Your Prospective Tenant and The Landlord’s Ultimate Guide to Rental Applications
You have other landlord friends. What do you think they could do differently?
I think most people could do a better job pricing their properties according to current market rates. It only take a few minutes and you want to make sure you are pricing the property correctly to attract as many qualified tenants as possible.
How does technology play into your rental business?
The main technology I use is the Avail website for the initial lease, collecting monthly rent and much more. The website can handle everything from start to finish and I feel tenants expect landlords to use technology these days.
Finally, you’ve been using Avail for over a year now. How has the software helped you?
The software has helped to collect monthly rent, which I never thought of when becoming a landlord. In addition, it was helpful in creating and executing a lease that complies with the Chicago Landlord Tenant Ordinance. Overall there are a lot of features that can help any landlord.
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Amanda is the quintessential Avail landlord. When she and her husband got married in 2011, they were stuck in the position of owning two condos, so they decided to rent one and become part-time landlords. Since then, the couple has acquired a small three-unit investment property. Amanda uses Avail to manage all four of their rental units. We had a chance to chat with Amanda to learn her secrets of being a successful part-time landlord.
What has surprised you the most about being a landlord?
Being a landlord is actually a lot easier than I imagined. We’ve all heard the landlord horror stories – tenants not paying rent, destroying the place, etc. I think what helps us is that we really respect our tenants – we respond quickly to issues, leave fresh flowers when they move in, that kind of thing. In turn, they pay on-time and only call us if there are major issues with the property. It’s a good relationship.
How much time do you spend on your rental properties?
I spend the most time when we have a vacancy (fortunately this doesn’t happen often). We try to set the rent price as low as we can to try to minimize the amount of time the unit is unoccupied. This gets us a lot of leads in a short period of time and I spend time carefully screening the applicants to ensure we get great tenants. Besides this, tenants pay online which saves me time having to go to the bank. The only other thing that requires time is handling maintenance issues, which fortunately happen pretty infrequently.
Did you ever consider hiring a broker or professional property manager to help?
We live relatively close to our rental properties, so paying a property manager 10% of the gross rent doesn’t make a lot of sense for us. If we lived across the country, then maybe we would consider it. As for a broker, it doesn’t make any sense for us to do this. We advertise our properties online and use the Avail application and lease. So the only thing that a broker would do is show the unit for us, but paying a one-month’s rent for showing the property is crazy.
You and your husband recently purchased a three-unit property. How’s that going?
Things with the 3-unit building are going well. We decided to buy the building after having the landlord experience from the condo. There are some differences – the condo building has a maintenance staff who we call for issues whereas the 3-unit building we have to find our own contractors. The biggest change going from one unit to four was realizing how important it is to keep things organized.
What’s the biggest landlording mistake you’ve made?
By far the biggest thing that stands out is something that we almost did. When we first decided to rent my old condo, we received interest from several tenants. There was one guy who presented himself very well and was ready to move in right away. My husband and I weren’t sure how to properly screen tenants at the time, so we told the guy it would take us a few days to figure it out. He asked if we would consider skipping the screening so that he could move in immediately. Fortunately for us, we said no, and we are so glad that we did. Once the reports came back, we realized that he was several months late on multiple credit cards. Who knows what would have happened, but we’re glad we didn’t find out.
What’s one tip or piece of advice that you want to share with other landlords?
The biggest suggestion I have for all new landlords is to spend a lot of time screening your prospective tenants (learn from our near mistake!). A lot of landlords make the mistake of renting to the first tenant they get, but it pays to be selective.
Editors note: Avail has blog posts with tips for screening tenants: Five Questions You Must Ask Your Potential New Tenants and Look Out for These Red Flags When You Show the Apartment to Your Prospective Tenant
How do you deal with repairs and maintenance requests?
First, we try to do as much preventative maintenance as possible. Second, when we bring in new tenants, we outline who is responsible for what and ask them to only bother us when there are major issues. After that, when tenants do have issues we make them log the issue in their Avail account where they can upload photos. When we get the notification, we call one of the handymen who we have developed a relationship with.
You have other landlord friends. What do you think they could do differently?
I get the sense that a lot of landlords don’t view their rental properties as what they are – small businesses. The rent you receive is your revenue, tenants are the customers and a vacancy directly cuts into your ability to be successful as a business owner. I think viewing the rentals as a business also sets a professional tone for how you deal with maintenance and your tenants. Unfortunately some people take things personally when things should be treated as a business.
How does technology play into your rental business?
My husband and I only recently became landlords, so it was natural for us to use technology to make things easier. I imagine that it would take a lot more time and more coordination to do things without tools like Avail. Even prior to using Avail, we were using some technology tools – like Google Docs, but Avail makes it a lot easier. One more thing to add – I think our tenants expect us to use technology. They’re all younger and expect that they will be able to pay their rent online. For us it was a no-brainer.
Finally, you’ve been using Avail for over a year now. How has the software helped you?
As I mentioned, we were using technology for our rentals before learning about Avail. What this platform has done is bring everything to one place – everything from the finding tenants to handling maintenance. It’s pretty awesome because, now with everything in one place, I feel much more organized and on top of things. It’s also saved time because I don’t have to switch back and forth between other things.
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The post Amanda Relies on Avail to be a Part-Time Landlord appeared first on Avail.
]]>The post Avail Landlord of the Month: Amanda appeared first on Avail.
]]>What has surprised you the most about being a landlord?
Being a landlord is actually a lot easier than I imagined. We’ve all heard the landlord horror stories – tenants not paying rent, destroying the place, etc. I think what helps us is that we really respect our tenants – we respond quickly to issues, leave fresh flowers when they move in, that kind of thing. In turn, they pay on-time and only call us if there are major issues with the property. It’s a good relationship.
How much time do you spend on your rental properties?
I spend the most time when we have a vacancy (fortunately this doesn’t happen often). We try to set the rent price as low as we can to try to minimize the amount of time the unit is unoccupied. This gets us a lot of leads in a short period of time and I spend time carefully screening the applicants to ensure we get great tenants. Besides this, tenants pay online which saves me time having to go to the bank. The only other thing that requires time is handling maintenance issues, which fortunately happen pretty infrequently.
Did you ever consider hiring a broker or professional property manager to help?
We live relatively close to our rental properties, so paying a property manager 10% of the gross rent doesn’t make a lot of sense for us. If we lived across the country, then maybe we would consider it. As for a broker, it doesn’t make any sense for us to do this. We advertise our properties online and use the Avail application and lease. So the only thing that a broker would do is show the unit for us, but paying a one-month’s rent for showing the property is crazy.
You and your husband recently purchased a three-unit property. How’s that going?
Things with the 3-unit building are going well. We decided to buy the building after having the landlord experience from the condo. There are some differences – the condo building has a maintenance staff who we call for issues whereas the 3-unit building we have to find our own contractors. The biggest change going from one unit to four was realizing how important it is to keep things organized.
What’s the biggest landlording mistake you’ve made?
By far the biggest thing that stands out is something that we almost did. When we first decided to rent my old condo, we received interest from several tenants. There was one guy who presented himself very well and was ready to move in right away. My husband and I weren’t sure how to properly screen tenants at the time, so we told the guy it would take us a few days to figure it out. He asked if we would consider skipping the screening so that he could move in immediately. Fortunately for us, we said no, and we are so glad that we did. Once the reports came back, we realized that he was several months late on multiple credit cards. Who knows what would have happened, but we’re glad we didn’t find out.
What’s one tip or piece of advice that you want to share with other landlords?
The biggest suggestion I have for all new landlords is to spend a lot of time screening your prospective tenants (learn from our near mistake!). A lot of landlords make the mistake of renting to the first tenant they get, but it pays to be selective.
Editors note: Avail has blog posts with tips for screening tenants: Five Questions You Must Ask Your Potential New Tenants and Look Out for These Red Flags When You Show the Apartment to Your Prospective Tenant
How do you deal with repairs and maintenance requests?
First, we try to do as much preventative maintenance as possible. Second, when we bring in new tenants, we outline who is responsible for what and ask them to only bother us when there are major issues. After that, when tenants do have issues we make them log the issue in their Avail account where they can upload photos. When we get the notification, we call one of the handymen who we have developed a relationship with.
You have other landlord friends. What do you think they could do differently?
I get the sense that a lot of landlords don’t view their rental properties as what they are – small businesses. The rent you receive is your revenue, tenants are the customers and a vacancy directly cuts into your ability to be successful as a business owner. I think viewing the rentals as a business also sets a professional tone for how you deal with maintenance and your tenants. Unfortunately some people take things personally when things should be treated as a business.
How does technology play into your rental business?
My husband and I only recently became landlords, so it was natural for us to use technology to make things easier. I imagine that it would take a lot more time and more coordination to do things without tools like Avail. Even prior to using Avail, we were using some technology tools – like Google Docs, but Avail makes it a lot easier. One more thing to add – I think our tenants expect us to use technology. They’re all younger and expect that they will be able to pay their rent online. For us it was a no-brainer.
Finally, you’ve been using Avail for over a year now. How has the software helped you?
As I mentioned, we were using technology for our rentals before learning about Avail. What this platform has done is bring everything to one place – everything from the finding tenants to handling maintenance. It’s pretty awesome because, now with everything in one place, I feel much more organized and on top of things. It’s also saved time because I don’t have to switch back and forth between other things.
The post Avail Landlord of the Month: Amanda appeared first on Avail.
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