Couldn’t handle it...why I just hired a property manager
Вставка
- Опубліковано 21 вер 2024
- The time has finally come. I finally hired a property manager while I invest in real estate, after 7 years of managing the my rentals myself. Here’s why and what led me to that choice - enjoy! Add me on Snapchat/Instagram: GPStephan
Join the private Real Estate Facebook Group:
/ therealestatemillionai...
Get $50 OFF + FREE Coaching Call FOR A LIMITED TIME: Code THANKYOU50 - The Real Estate Agent Academy: Learn how to start and grow your career as a Real Estate Agent to a Six-Figure Income, how to best build your network of clients, expand into luxury markets, and the exact steps I’ve used to grow my business from $0 to over $120 million in sales: goo.gl/UFpi4c
I ended up buying two houses and a triplex in late 2011 and early 2012. Since then, managing them has been extremely easy. For the most part, it took me 1-2 hours per MONTH of work to manage 5 tenants at the time. Most of this time was spent making sure rent had been paid, cashing rent checks, making sure bills were paid, and just generic accounting. If something broke, I’d just call a contractor to go out and fix it. I also rarely had vacancies..
My rental landlord philosophy was this… I generally don’t raise rent, unless it’s a unique situation or cash flow issue. For instance, on my original 3 properties, I’ve only raised rents when a unit becomes vacant. I’ve had some tenants since 2011 that are paying the SAME rent since back then. Am I leaving money on the table? Sure. But on the upside, I have really, really great tenants that take really good care of the place, treat it like their own, always pay on time, and are all around really awesome people, making it easy for me to manage. They have zero desire to move since they’re paying so much less than they would if they went somewhere else and in return, it’s easy for me. It’s a win win.
But recently the unthinkable happened…a tenant had to move and relocate for work. And now my vacant place needed a little work - just minor fixes, re painting some stuff, etc. And finally, at that point, I thought about it…the time it would take for me to drive an hour each way just to go there, the time it would take to coordinate a walk through, meet and screen tenants, handle payment, etc…just wasn’t worth it. My time was better spent doing just about anything else. And finally, it clicked…I gotta hire a property manager, I just can’t handle it myself.
So I did some research online, found a recommendation…did some negotiating back and forth for a day on prices between that and another company, and settled on a flat 8% management fee, everything included, and I moved forward. My reasoning now is that my time is way more valuable doing anything else other than managing a place, and the money I spend will save me more money that I can make elsewhere.
So I did it…I hired a property manager for my first house. Now remember, I’m still managing my other 4…that’s really easy. But if I have another vacancy, the management company will get that one too. And eventually I’ll slowly phase the management company in to replace all the work I currently did.
I’m only a month into this so far, but overall I like it. It’s amazing to be “Stress free” and have that distance between you and the tenant. I like that someone else handles it all, and all I have to do is simply just collect the check…I’m a little paranoid that something might fall through the cracks if I’m not micro managing it, but I’m doing my best just to let someone else take over.
So that’s the story, and that’s why I hired a manager for one of my properties. If this goes well, I’ll slowly phase it in to everything else and have real estate investing become 1-2 hours per month more passive.
For business inquiries or paid one-on-one real estate investing/real estate agent consulting or coaching, you can reach me at GrahamStephanBusiness@gmail.com
Suggested reading:
The Millionaire Real Estate Agent: goo.gl/TPTSVC
Your money or your life: goo.gl/fmlaJR
The Millionaire Real Estate Investor: goo.gl/sV9xtl
How to Win Friends and Influence People: goo.gl/1f3Meq
Think and grow rich: goo.gl/SSKlyu
Awaken the giant within: goo.gl/niIAEI
The Book on Rental Property Investing: goo.gl/qtJqFq
Favorite Credit Cards:
Chase Sapphire Reserve - goo.gl/sT68EC
American Express Platinum - goo.gl/C9n4e3
Screw real estate, changing light bulbs - where the real money are!
TRUE DAT
Facts
How long to get your light bulb license?
John Boykin
At my Lighting Techs Local 1065 I was told it would take about 3 year as an apprentice, then I’d have to pay $247 a month in dues.
The real money is cleaning and painting cabinets because they are the wrong sheen
always measure any amount of money in subway sandwiches
Subway and gas money = new units of measuring currency
Emily Lam-Mach I legitimately use hot n ready pizzas as a scale for financial fairness
This is how i measure my life now. Am i becoming Graham?
I measure everything in ounces of silver. $7.00 is almost half an ounce!
Or Chipotles ...haha
Treating good tenants well is always a wise move. Greed doesn't get you anywhere.
🙌🏼
Re tenants - buy your own place or treat the property like your own and don't be bitter about it ie take it out on the landlord. It is a simply business transaction - you can live in MY house if you pay me this amount of money. Landlords be respectful and tenants be respectful!
Good tenants are a treasure. Expect a lot and deliver a lot. Good tenants will find you in good homes.
That assumes one can recognize a good tenant. #cancelrent suggests many landlords weren't so smart.
the problem with not raising rents is that your government is raising your property taxes the whole time.
When you have to send a $15/hr worker to replace a $2 bulb and it takes him about 20 minutes to drive to the property using about $1 in gas you begin to realize that the cost of the worker is costing you $5 and the product and gas are costing another $3 then you realize the true cost of doing this.
Why not eliminate this expensive task from your management by requiring the tenants to change their own lightbulbs when they burn out. You could buy a box or two of bulbs and put them in the house before the tenant moves in and tell them that all the lights are working when they move in and they are now responsible for changing the bulb when it burns out. Tell them that you have provided them with a few boxes of bulbs to get them started.
The only time you should be responsible for bulb replacement is when it is a difficult bulb to replace or requires a ladder or a chair and in those instances, you should use a long life LED bulb.
Looks like the light bulb was to be replaced at the same time as other work in the property.
@@notmychannel8602 Exactly, such work is done when all the other work is done too.
I do agree with the responsibility though, in my student dorm certain things are simply not covered by the renter organization, such as bulbs.
When I was a renter...the landlord would not fix anyrhing...we literally had to use mini locking pliers for the shower to work after the knob broke. When a window pane broke...I fixed it myself. The rent was low and heat was included. Now that I own...I still fix stuff myself...heat is not included....no rent...
those are some good ideas.. One additional consideration I would add is regarding safety issue.. this is particularily involved incandescent bulbs in which the buld glass is broken or no longer attatched properly to the metal screw bottom.. it presents a serious safety risk while attempting to remove these bulbs. Andother one is in which watter is gotten into the bulb or the bulg screw bases or parts of it are rusted out with some exposed wires.. I have seen these things.. and this is not a standard unscrew and screw in buld situation. And sometimes the bulbs are hidden behind an encluser that needs to be removed and then replaced, with out breacking it. Many times those enclosures are made of fragile glass. Thankfully the more modern enclusures are made of plastic so they are less prone to breaking and a bit more safe to work with. I agree with you about using LED bulbs.. And they should definititely be used in those harder to reach areas. And in my option all bulbs in the house should be LEDs. They are far more energy efficient .. save you a ton of money in electricity. they last longer , way longer than incandescent bulds, and the price of them has been getting really cheap too.. And some of the new moder wifi LED bulps I think are becoming more in demand because of all the things you can do with them.
Bingo.
When I owned rentals every tenant I had was like babysitting a kid. How they functioned as an adult I'll never know.
Haha!
I used to work for a 250-unit apartment building in which I lived. On paper I don't look so good -- I'm disabled with a credit score of 622 but they should add 100 points to disabled scores. In reality? I'm never late with rent, don't mess up the fire, water or gas, don't leave entrances unlocked, don't have visitors (shouldn't they be screened also?), and no rodent has ever survived entry into anywhere I've lived, killed so quickly that it's not even necessary to call an exterminator. I see landlords renting to #cancelrent people complaining they're going broke but these people wouldn't have rented to me. There's always some landlord who needs money and uses common sense. Most of the landlords who post here I wouldn't want to rent from anyway. We need *landlord screening* just as bad. I think most good tenants and landlords just stay put with each other rather than risk the unknown. So much can go wrong with any new tenant or landlord.
Millenials, screen em out
@@girohead only millenials rent apartments tho. they dont have money like boomers. if millenials had, they would live in bought houses.
@@Redmanticore What state are you in? Not in CA, many rent at all ages (70s) and people in their 50s and 60s have roommates!
You not raising rent is the same thing my Grandfather did, and it works.
Tenants are happy, you're still making a profit, good stuff.
🙌🏼
Yeah but if they decide to stay longterm you will have a problem. My parents rented to a guy in the 80s and never raised his rent. So there we were in 2017 with the guy still paying $170.00 a month. So with property taxes insurance etc. I suppose they lost money. Not to mention the lost rental income from not raising it.
He always said he couldn't afford more.
Dont get too far behind on rent increases
That is an extreme case but at some point if they stay you need to raise there rent.
This is what my mom does aswell! As long as u pay on time and take care of her place,she takes care of u.
@@GrahamStephan Do you still plan to not raise the rent now that State wide CA rent control has been passed. I went many years not raising the rent, and now I have rents below market & can only raise them so much per year. Now I will have to raise them every year.
I don’t raise rent 2nd year but most years after that. My goal is to stay $75 to $100 below market rent as an incentive to keep renewing. However never raising rent is lazy and poor money management
Landlord 10yrs: Son of Landlord 45yrs: My father taught me that same landlord philosophy and it has served me well as I have a 10yr plus tenant in the first house I bought back in 2008 who is still paying the same rate as when he first moved in. Is it far less than market value yes, to the tune of 30%, but the guy never misses a payment and has even improved the property over the years. Treat your tenants with respect and they will grateful in return
Best real-estate/money videos on UA-cam, hands down.
I couldn't hadle it... so i subscibed to Graham
"I still couldn't handle it...so I liked his video"
I hired a subscribing manager
God damn
"Losing money. I don't do that."
Except with bitcoin (; lol.
I actually didn't lose any money with bitcoin! I sold it just over what I bought it for...but I did lose money in Raiblocks/Nano. Oh well.
Graham Stephan
Long story short, I intially invested $23,500, went up as high as $40,000 first week of January in basically 3 weeks time.
Just got out this week cashing out $2000 lmao. I don't ever want anything to do with crypto again. I don't care if it goes 5x to $10,000. It was time to move on as I'm close to getting my bachelors and real estate license.
Pat L litecoin for me 😩
Pat L You sold this week? Oof. I bought some more Eth yesterday
I'm holding onto my bitcoin. I think it'll eventually go back up. if i had more money i could reasonably commit to it right now I would while it's got such large drops in price, for example it recently dropped to it's lowest it had been this and the end of last year, $600 the next day it shot up to $1300. Think of bitcoin as a really long presidential election, it's going through the processes to become recognized and official in every area and place it can. It has lost out in a lot of it's attempts, but it has established a stronger foundation through the ground it has won. Eventually it may gain enough to win over it's opposition.
Having a property manager should allow you to scale without losing your sanity. Worth the bit of profit upfront to make it up big later down the road.
Agreed, we will see how this one plays out!
Michael Jay - Value Investing I was gonna say the same thing
Another way to not have to deal with tenants, are storage units. People store their crap in storage units and have a contract so that if they stop paying, their stuff can be seized and sold to pay the rent of the unit. You just need to pay for security staff, offer them a theft insurance if they want it.
I manage 7 and agree it hasnt been hard at all, and I consider myself shy and introverted which I thought would have prevented me from doing the management. I think Graham will manage the home after the management agreement expires and learning they really dont add a lot of value or need.
@Jacques Gauthier- How do you find and evaluate these storage units for sale. How do you know when a storage is a good deal?
I could understand your point on not raising rents too often when you have good tenants. We've done the same with our good tenants (one of them has been with us for 12 years while the other has been with us for 35 years). Friends of the family would pester my Dad on why he didn't increase the rent EVERY year! However, they never questioned their greed when they would have a couple of their apartments vacant during a renter's market.
Exactly!
grindhouserob
Lol i cant stand people like that, so disgusting.
It's common sense and lack of greed if my landlord raised the rent every year I would be looking for something else too.
I think also.. having good reporte with tenants is a good thing over all.. and if provides good word of mouth reviews and hopefully at some point a kind of AirBNB review system which will allow tenants to rank quality of a propert and management of a property that is being rented. It will attract the better tenants and those will probably be better in terms of overall financial health of the business.. It does not illiminate the owners responsibility to do proper management and upkeep. IMHO.
@@TrentTheCreator inflation increases every year and so does property tax most likely so why not?
I've had prop managers over the years and have been mostly disappointed. From getting bad tenants to overcharging for services, etc. The key is tenant selection. The main problem with prop managers is that they can make a lot more money from you if there are problems with the property. I agree, get a good tenant and handle it yourself.
🙌🏼
I like your landlord philosophy. I have a friend whose rent never been raised, she new even got a dishwasher for the unit with her own money, she fixes everything herself. Just as a sign of appreciation for not raising the rent. I’d do the same.
Woman are the best.
Ligma is the worst.. ruins lives every single day..
It's terrible. No one should ever have to go through that.
What’s ligma?
XboxExtremeModding LIGMA BALLLLLLLLLLLS. GOTTM.
verstamp you’ve bamboozled him
What is ligma
Your rent philosophy is absolutely excellent. I wish all landlords had that philosophy!!
🙌🏼
How many real estate investors does it take to change a light bulb?
😂
issue is that nobody reallly think it coudl be done by renters. and you can pay renters to fix issues.
I’ll change it for $7
changing a lightbulb is rediculous, do u have to keep the fridge full of food too?
@@Wildboy789789 I am wondering if this was en exterior bulb. this then might also require removing some covers and also to mount a ladder or even much taller ladder if it on a high light pole? I think the item does not give enough info from graham about the circumstances.
In the 1980s, I rented an apartment in a building in West Hollywood. There were retail stores below on the ground floor and apartments on the second floor. The landlord used a property management firm. All they did was collect our monthly rental checks by having us either drop off the checks at their office or mail them. They never swept the dirty and dusty hallways or replaced broken windows, etc. After years of this my neighbor tracked down the landlord and told him what was going on. He immediately started making improvements. You probably can guess what I think of "property management" firms...
I just thought a little more about this and now I’m confused. Is your office in your garage? Do you have AC in there??
Office is my garage, but it was renovated as a studio...so even though there's a garage door, it's pretty done up. No AC, but it's well insulated so it stays rather cool....unless it's like 90+ degrees out all day, and the afternoons get hot.
Screw real estate, changing light bulbs - where the real money are!
What a hater question.
I really enjoy your talks. I've watched a few of them full length, and actually thought right on! You're years ahead of anyone I've ever seen your age. I'm 56 and just saw the light on real estate investing 5 years ago. I wouldn't want to be a broker or realtor, but enjoy buying and fixing up and cash flowing so far. Your candid and transparent methods are exemplary and your success, inspiring. I've been self employed for 28 years, so I can relate (to everything except your massive financial success) to your outlook. Kudos and please keep the content about your personal experiences about earnings, rentals. Really, all of your stuff is produced incredibly.
Sounds like you’re good at finding good tenants. Mostly. I‘d like to know what your interview and screening/pre-screening process is.
Proud shrimp, that’s freaking racist. Skin color has nothing to do with the quality of a tenant! Honestly, people were right, racism wasn’t growing, it’s just being shown and revealed. You are wrong for saying that. If graham read that he’d be disappointed in you.
I just had a crazy lady con a fast food burger place. Car was in front of me, she argued for at least 15 minutes. I got a free cheesecake because the joint felt bad for me waiting for this crazy lady scamming for food. She got it too.
Great work Graham. Discovered your channel couple of weeks ago and couldn't help but keep re watching them. Real, accurate and completely honest advises. ! Thanks
Thank you so much Muhammad! Really means a lot to hear!
Yep, I agree w/ you Graham on doing PM yourself for a while so that you know what to value and price everything. So now you can know what minimum effort and results you expect and can articulate to your PM company and hold them accountable and call them out on BS or laziness. :-) I am an RE agent and have 2 rentals for over 2 years each and have learned so much but am getting close to handing it over as well.
A good property manager will make your life so much more pleasant
So far so good!
BMWg84
Key word: “good”
A real blessing
The issue isn't if they make your life easier but rather are they worth the cost. 8% isn't too bad on a 1K property but if the property is being rented for 3K/mo that is about a month's rent lost. Assuming that you are putting in 2 hours a month. That is 120 dollars per hour. Then again, are they going to do a good job?!?
Good point. I just have to deal with it. I will have to manage the first house myself. I cant imagine having a property manager for one home unless it is a multi unit
That is so awesone that you don't raise the rent...l mean they are still paying the mortgage essentially, but having great tenants that care for your properties is definetly worth it. Love your channel!!!
Thanks!!
When dealing with single property’s looking for older high schoolers or local college kids that may stay in the area to manage properties is also a great way to handle the situation you can show them the ropes and make it more of a mentorship as you then fix a lower pay for them and keep a little bit more profits
Pros: More money
Cons: Initial time investment/ new managers more often
Sounds like you're spending almost as much headache managing your property manager
Kuuryo
That may be true
Mbz I was thinking the same thing. It sounds like the company is trying to over charge him without being a great manger. I wouldn't renew the contract after it expired.
My family has been using a property manager to handle 12 properties from my grandpa for about a decade now. We pay 7% and they take 5% and put it in an account for repairs.
We get a check from them every month, and a report. Very rarely do they ever call us with questions. We go months and months without speaking to them.
To go in and change a light bulb is also an opportunity to get in and see what's going on. And it's in our contract anything under fifty dollars gets paid by the tenent. They will learn quickly to change a lightbulb.
@@AcidDaBomb what do they do with the 5 percent repair money that is not spent after several month.. do they cap it and then send you the balance or once a year see how much is in reserve and then make changes to bring the reserve back up to level they and you think is good amount to hold in reserve?
When you do the math , you make more by not raising the rent, vs raising the rent and having tenants moving out or starting bothering you for everything little things.
Agreed!
Totally agree. Your time is always worth way more than the extra money you can save.
So true!
4:50 I love that part of every video lol
GRAHAM DOESN'T UNDERSTAND REAL ESTATE!!! THIS ISN'T APPLICABLE TO THE AVVERRRAGGEE PERSONN!!!
2010drive Hilarious😄 I love that part too
I’m able to focus on other tasks because I have a property manager for my properties. I managed them all for 5 years and now similarly to you it was time for me to move on and let someone start to do it. Best decision ever.
🙌🏼
Probably a good idea to pay for a property manager. It's annoying dealing with people in any investment coming up with any excuse not to pay their bills.
Agreed. My patience for that is pretty much over with. Ain’t nobody got time for that.
Here's an RC Cola for ya . . .
The Kitchen Enchilada, I agree. If you're managing, you have to set the tone... Tell them what you expect. Have late fees in place.. If they don't pay their bills, you can't pay your bills (ie.. the bank etc..)
hearing your philosophy on not raising rent made me so happy. you seem like such a good person, graham. many people tend to think that rich automatically means greedy and mean, but you've definitely showed time and time again that this is not the case 💕
My aunt is buying a condo here in South Florida to become a snow bird. I told her I would be her property manager when she is away and thinking of making it a side hustle down the road.
totally onboard with you on not increasing the rent... Good tenant with low vacancy is the golden blessing for a landlord.....Most of my costs are incurred when tenants move out......
Don't know if this will help but why not get a rental agent? My residential properties are mostly out of state (1.5-2 hours away). I own a good amount of them and I don't use a property manager and I'm able manage them from another state. I've built a team and part of my team is my rental agent and my contractors. Whenever I have a vacancy or buy a new residential property, my rental agent takes care of everything for me. She knows what I look for and she emails me all documents, background checks and phone numbers. I review all paperwork and usually give the tenants a call to get a feel for them and then I say either "yes" or "no". Whenever there's a complaint, My tenants text me and I text my contractors...24 hours later it's solved and I pay them online. This saves a good amount of money because my rental agent only gets paid if there are vacancies and I usually don't have vacancies. And since I own quite a few properties, I usually ask my tenants for referrals and have my rental agent do her thing and this has worked out quite well for me. For Commercial real estate, a property manager is a must.
Where are your properties? How did you find your contractor?
nice. But are you a millionaire yet?
Tong Yang ewww you’re messy. That was a shady response 🙄😂
Rental agent - isn’t that the same thing as a property manager? The only difference being a property management company usually charges 10% of tents collected.... vs what you pay an individual who acts as a rental agent. What does she charge?
Luis Quintanilla ..to not have to deal with most people makes the outrageous housing prices worth it.m
I inherited my brother's home last year and decided to rent it out. I live outside of the US and my parents are in their 80s. I didn't want them to have to deal with any issues that might come with the property or tenants. I hired a property manager. There have been a couple of issues that were annoying, but no big problems.
One of the conveniences is they have contacts for any repairs that need to be done. We had very little that needed to be done before we put it on the market. The costs were surprisingly minimal, but I guess that is because they were cosmetic and not structural.
When they put it on the market, I thought they were asking too much and we'd never get that. We didn't, BUT we did end up getting $200 more per month than I thought we would. The home was rented within 3 weeks and the tenant pays his rent on time. It was the right choice. Now, I get some extra money every month to put in my retirement fund and it will supply me with extra income when I retire.
I'm now inspired to go through the manager statements line by line.
My father is exactly the same. Retaining 'nice' tenants makes life easy for everyone.
I am exactly the same way! No one can do it as well as I can, (anything), so I overwhelm myself because I want to control it because I am the best! lol. I will have to learn to let go of control as I progress.
I COMPLETELY AGREE with your “land-lording” strategy of not raising the rent until a tenant moves out. They do treat the property like it’s their own. Good service on nice properties makes a huge difference. I don’t use a property manager, for the reasons you stated. And great tenants usually upkeep the property, including changing light bulbs!
Agreed!
its honestly to interesting and cool getting to the point in life where your time becomes super valuable and things like hiring managers saves you time and money. idk, i just think that is super cool. awesome video graham!
Thanks so much man!!
I have watched your channel for a long time and have a lot to learn. Something you said in this one I greatly admire you for. You have not raised the rent on your tenants....Thank you so much for renewing my faith in people. When I hear investors say they buy a apartment complex and the first thing they do its raise the rent to make their property more valuable. Absolutely makes me sick. No concern for people. I have a job that didn't get a raise for 5 years. Not everyone gets cost of living raises. So thank you for being a great person! I need a one on one with you, being a 42 year old who grew in fear and parents who never had much nor saved money. I am finding it hard to let go of the little money I have managed to save and "risk it" to get out of my 9 to 5 that will never get any better. So I get angry and depressed and the fear of screwing it up keeps me stuck
I really like the in-depth experience you share on being a landlord, very helpful. I too wanted to be that "cool landlord" and got burned big time. I still need practice setting boundaries so plan on hiring a property manager but find you really have to manage the manager too. I totally agree it's better to keep rents a little lower to keep good tenants. Once I find good ones, I want to keep them.
The owner caring more is true in every business. It's called the principal-agent problem - where the owner's agent cares about their own interests which likely don't totally align with the owner's.
7 usd for replacing a light bulb is also for driving to the house - I suppose.
ita like when i was working for a landscaping company we charged 35.00 to replace one sprinkler. it it was broken completely it was 35(we paid 2.00) for sprinkler for bulk buys, however if just the head was broken($35.00) we had a surplus heads. literally a 1 minute if not maybe a couple seconds and bam, but yeah we charged for "service call, gas and actual labor). sometimes i personally made almost 200 maybe 300 in just sprinkler repairs per day for that company, not including any additional work like a cracked irrigation pipe etc. With alll honesty though sometimes when we did new designs we saved all the working sprinklers and use those rather than buying new ones just use them all up till we ran out.
@@shadowspire did they know and understand they were getting used but in good working condition sprinkler heads? It would not be fun to learn that i was paying for new sprinkler heads but only getting used ones and not being told so before hand.
@@manp1039 yes, most understood that they were used sprinkler heads, plus we tested them prior to installing them. For the used heads we mainly put them for people who were cheap(not to be rude), but those people hardly ever wanted to pay to have a sprinkler replaced so for those we charged 10 for the used sprinkler head, and 15 for a sprinkler body(used) and we explained they were used but if they wanted new ones it was a different price plus we wanted to avoid other issues. We hardly had to replace them out of pocket but when we did it was because their kids would break them again. Little things like that were what was more lucrative than other things mainly because like i said when we bought in bulk we would usually have 15-20 new ones so that was profit for us charge as if we were buying them. And those were mainly for the big clients we had since they wouldn't complain about the price. But yeah we would try to do everything properly, but i did know many landscapers that were really shady(used sprinklers at full price, would get 1 gallon plants(some cost $5 with the business discounts and get bags of dirt, get a 15 gallon bucket fill it half way plant the plant, water it and let it sit for a few days and charge you $40+ for it as if it was a 15 gallon plant) they would never tell their clients and just swindle them out of money. It really depends on the type of people running the company, theres good and bad actors so if you have a lamdscaper i suggest you figure out what kind of corners they cut. its really easy to swindle people out of money in that business they can nickle and dime you for almost anything
Im new to this. I hired property management. It cost me so much money cause the guy i hired didnt do his job. He did half ass job on looking for tenants. End up rent my property out to a bad tenant. Didn’t pay for 3 months. Didn’t help with lawyer and paper work to boot the tenant out either
Thanks Graham. I'm 15, I got interested in real estate when I was 13 because I knew from a early age that a normal 9-5 Job working for someone was boring, I figured it out because I realized that we didn't own the apartment my family lives in, we pay rent every month.We live on a block with 12 identical buildings all managed by a leasing office in the middle of the parking lot with a swimming pool and a playground.Each building has 3 stories with 5 apartment on each floor. I assumed that everyone was paying about the same amount of rent my mom was( ik there might be apartments with only 1 bedroom and stuff like that) and did the math, who ever is collecting all the rent money is earning 2.5 MILLION dollars before he pays the maintenance and management team.
I searched about real estate and in 2 years I learned everything from wholesaling to developing real estate, I also searched other business but I think real estate is the best because of less employees and other factors.😁
Taxes, repairs, vacancies, bad tenants having to pay lawyers and losing time and money, there is more to figure into the equation. Also keep in mind if you don't have some money to start with then you can't buy your first property, so you will likely need to start the 9 to 5 now and work hard and by the time your grams age 21 to 25 have some money for properties. Save and invest everything !!!
Brandon L solid advice, thanks.
@@benjaminchadwick8007 smart observation... I find that the best part about owning rentals is that: God forbid that you are laid-up, injured, and you can't work, your income (the rent) keeps coming in.. Your check doesn't stop. You can vacation as many times as you want during the year and for as long as you want... Then, there's more time for family and friends.. That alone, I believe makes it very worthwhile.
Your tenants are sooo lucky that you do not raise rent yearly! I living in crappy Minnesota and in an old apartment. Leases are all 1 year in my complex and each year rent goes up about 75$/month
Been trying to figure out who Graham remindes me of, finally came to me, a mashup between Tom cruise in Tropic thunder and Stewie.
I always thought he reminded me of Phineas from Phineas and Ferb.
I wish I'd known of you before I got priced out of CA. I'd owned and rented and after selling my 3rd house, I rented and every dang year the rent got upped significantly despite being specifically told they don't do that. There's a point where price is more than the place is worth and they hit that mark so I left. I took care of my disabled friend in Laguna for awhile then my Mom in Indiana needed care, so I chucked it all and moved east. No regrets. CA had changed significantly. Too many corporations (and foreign investors) buying up property and just hiking rent as high as market would allow which then just upped market for everyone til it was just not realistic anymore. I was incensed when SF tried to solve the problem by capping increases but it didn't start til beg. of year so all the landlords just found a way to evict the tenant or grossly up the rent so they'd leave, they slap on a coat of paint and swap out a sink and rerent for what they thought rent would be (if allowed the increases they were used to) in 5 years so basically rather than the increases they'd normally get, they got it all up front and still got the capped % each year after that. Worked out very well for them, but left a lot of people homeless. CA is a great state, and the leadership is good, but that's not something they can control. Greed is hard to regulate when it's rampant. I so appreciate that you don't raise rent for good tenants. That matters more than you know. It's not OK that so many get poorer every year because income goes up 3% if they're lucky but rent goes up 10+ and everything else goes up too so you end up poorer every year. It's such a struggle now to find a place that won't do that to you every year. Eventually, you get priced out of living and that's a way out far too many take. Kudos for you for not doing that to people. I hope you maintain that as your success continues. It matters. Now more than ever. We get so used to 2k or 3k being standard but stop realizing that income just isn't where it needs to be to pay that for far too many people. If the people who staff the businesses making min. wage can't afford to live within an hour of their work, that's a problem. It's a huge problem. They have families too.
$7 , that was a light Bulb moment...
Hey Graham. I am a new property owner and I really like your channel and philosophies on real estates and finances. I bought a vacation condo by the beach in San Juan, PR in the spring, completely remodeled it, and I am AirBnB-ing it when I’m not there to help pay for itself and it’s going extremely well so far. I can relate to your micromanaging dilemma. My property manager is a fantastic lady who Iives in the building who also owns a unit that she rents out. Property management is her retirement gig and she’s great at it. The quote at first was 10% of the nightly plus the cleaning fee(which I would have to pay anyway). As we got started, I was managing all the bookings because, like you, I wanted to be a bit more picky about who was coming in and out of my condo and my building so, she graciously reduced the fee to 5% plus cleaning fee. She greets the guests, is available to them during their stay and turns over the apt which is great when I have same day check-out and check-ins. This compromise has allowed me to feel(a little😉)less anxious and has given me a better sense of control over my investment. I look forward to more videos!
"I'm a stickler for good photography," he says into the out-of-focus camera! LMAO
😂
I'm working on that as one my dream. I still like too learn everything in rental income. Like me when it mine I have high vaule. Growing with the experience. If I can't handle I try. It all a learning curve.
I think it's a good balance of great tenants. Vs. Bad ones. I take good care of my property. But some tenants are nuts I got a call because a tenant had two flys in there place didn't even know what to say to them. Jaw dropping. As far as management there are. Great ones some don't care
Hahaha I'd flippppp if a tenant complained about a fly
Worked at an apartment complex for 21yrs. We had 220 units. Built in the 60's most needed remolding. But we could have cheaper rent than anyone else. That means a lower class of people. We was lied to on a daily basis. Even though we always keep them up, I can understand letting someone else have the headaches. But don't forget a work truck, time and gas to show up. The cost for the light bulb. The tenants should replace it before moving out. 7 $ is not that much. Depends on how you look at it. Maintenance on a bulb is like tires,sooner or later, it will burn out or wear out. They shouldn't have to pay for it while living there. But should have to when moving out. My opinion. Wasn't burned out when they moved in. That's what the deposit is for. Thanks for your video.
i got denied a mortgage because i didn't do my research, turns out i can't have a mortgage until i have atleast 2 years of consumer credit. looks like ill stay living in my car and continue to save for another 2 years before my real estate investing starts.
Correct 😬
Keep hustling and stay motivated. Hopefully after 2 years that is when the dip starts and you will be in awesome position.
This whole credit scam is board line criminal. I own property. Some even paid off. Car paid off. No debt. As I tore up my Credit Cards years ago. Want to refinance on of my mons homes to a lower rate and pay off half at it at the same time. I could Not! Get a new low because I had no credit. Even though I ve paying that her mortgage now for over 5 years to help her out. I didnt even want more money but was going to pay off $100 k on it! The whole system is crooked. Using Credit makes you lose money. Its way I ripped all my cards up in the first place. Save so much I bought my car in cash.
You can get a manually underwritten mortgage. Not every lender is too lazy to do a little research before loaning you hundreds of thousands of dollars.
@@prophetseven728, you're right. It is crooked... You shouldn't have torn up the cards, that lowered your FICO., killed your credit.. Keep the line open, use them, but ALWAYS pay them in full.. even before they're due.
You remind me of me. The easiest way I found two let go, was to have some patience to look at the end result. I felt like that's what you said at the end. As you were happy with their property management process. In my life's journey is the easiest way of found to do this, we all live in our own reality because perception is reality and we all perceive a different universe. That's been my easiest Mantra to I give myself the patience to wait for the end result. I own multiple properties as well thanks for the video.
Liked.
Subscribed.
Take that Graham.
Thanks!!
Taking into consideration, a lightbulb these days is about $3 - $4.00 a piece, depending on what kind of light it was, I wonder if you would change a light bulb for that amount, gas, time, etc. That being said, if your Property Management company is padding their bills, then you’ve chosen the wrong PM company. In addition, did they not specify this in the PMA? I’m glad you chose a Property Manager and you can see the value in their services. There are amazing property managers who really do treat owner properties as their own, but they are few and far between. Good Property Managers know how difficult this industry can be. There has got to be a level of trust between you and your property manager. If you don’t trust and feel you have to “micro-manage” then the relationship will inevitably die. One thing that is also a benefit to using a property management company is, their fees are tax deductible. So, that’s another factor to take into consideration and add to the equation of the pros and cons of it all. :)
My dad has 3 properties and it takes more than 1-2 hours because him and ussually fix it ourselves since it's ussually worth that time in savings.
I love what you’re doing, keep it up. I see you being self-critical on the ability to delegate and it’s something you’re working on, which is great. Just be careful with your “nobody can do it as well as I” thought process because that will only hold you back. There actually are people who can do things much better than you, because they have more time to dedicate to the skill / craft / service. That’s why you hire the best, and use their skills to help you grow yourself. You should be saying “nobody can do it better than this person, and that’s why I hired them!”
A lightbulb is a symbol for an idea and they're a dime a dozen.
I was thinking getting a property manager would mean they literally take care of everything and only charge 8% of the income you receive from the rent but now I see they basically add on whatever the cost is to maintain as well which is sorta discouraging. Might as well do it myself if I'm still paying for literally everything
You also have to worry if they oad the bills on repairs. You basically giving control to them so you dont have to do it. So make sure they have good contacts for professional and reasonable prices and they are honest!!!
Thats just more passiveness to your income
Exactly!
The reason I hear why people that have had rental property get out of the business is that management is too much trouble. If you like managing them yourself, then fine. But if your "passive income" becomes a second job, then I say pay someone 8%-10% to take care of it. It's supposed to be passive income so you can grow your business without limits.
I don't raise rent very often. I agree with Graham. When you raise rent, people are tempted to leave. Replacing a tenant can cost more than the additional rent you would have received.
yes I agree.. and not just that.. if the tenant doesn't feel a connection with the property-manager/owner and if they feel negative feelings toward the owner for other reasons.. perhaps personality or even fear.. they might be looking for a place where they feel safe and comfortable living, in addition to the cost factor, which combined might be the last straw for them. Moving for a tenant is a huge expense, and finding a place to live is finding a home. Some landlords seem to not see this.. i think many of the successfull landlords/property-managers see this connection.. and they, like grapham, try to find good tenants and keep rents stable to help keep them there. I think graham has also mentioned how he feels the tenants are like family to him. I think that attitude come across to a tenant in terms of trust etc.
I chocked on my spaghetti when you said ligma. Always catching us off guard graham....always....
😏
So nice to see a young man doing this. And he is as cute as my cat too. I wish him well and happiness too with peace of mind because renting is hell because of at least half of the population on this planet suck.
Out of all you stated...I’m stuck on the part where you said, you don’t raise the rent 😱😱wish you were my landlord😩
for all credit card, PayPal, western union, cash app, bitcoin funding up to $15,000 or more contact Matty via whatsapp @ +15186023105 OR mattyw193@gmail.com
Don't buy rental property unless you have some mechanical aptitude period. Even if you can hire people to repair stuff for you, you need to figure out if you got a fair deal or got ripped off. Also, you need to inspect the work and understand what the person did in the repair to make sure it was done properly. Many contractors and handymen will do a very temporary fix and you end up fixing whatever was broken again. Also, understand that renters break everything and appliances do not last more than 7 years maximum. Also, it is extremely expensive to hire someone to fix simple things, e.g., I paid $150 for a 10 minute plumbing issue.
Graham, I appreciate all the videos you make. I wanted to get my real estate license, but then I saw your previous video of door knocking. Honestly, I don’t have the personality to do that, are there any other alternatives? Thanks.
Plenty of other alternatives! I have a ton of videos on them, including expired listings, sphere or influence, craigslist, etc. I have a real estate agent playlist you should go through - just watch everything on that!
Good for you on not raising the rent. Less vacancy issues too. Keep your enemies close and your rental locations closer.
Smartphone photos aren't that bad tho. They just take them in a bad way. You can take really good smartphone photos if you know how.
An entry level DSLR will DESTROY the most expensive smartphone in picture quality.
# of course but if you are starting out no need to go spend a lot of money a DSLR camera when your iPhone can take quality pictures
@@elexustilmon the property manager is supposed to be a professional
xybersurfer If you are starting out on something you never did before, you can’t really say you are professional
@@25566 If you shoot RAW and you know what you're doing then no....
I like how I was watching this video while working subway at night when he mentioned that the lightbulb change costs as much a subway footlong 😂. I listen to Graham Stephan’s videos with my AirPods while I’m working so no one notices
Oh I'm a contractor in San Bernardino
I actually totally agree on the keeping the rent the same! You want those tenants to stay and take care of your property and be LOW maintenance. It's a win-win. Just bump it up when they move out. It's worth it not to have to worry about that house.
Yo Graham, this is in regards to risk management: for each of the properties you own, do you have all of them as you as the sole owner? Or did you setup each properties with an LLC and have the LLC pay you with management fees? Wondering what your liability control setup is
What would you recommend? I have heard many saying to split up rental properties into their own LLC.. I have also heard about using an umbrella LLC which owns all the other LLCs which then money can be funnelled to the umbrella LLC for use to purchase additional properties. I have heard some people using C or S Corp for the umbrella entitity.
@@manp1039 starting to sound like tax evasion operation. " using an umbrella LLC which owns all the other LLCs which then money can be funnelled to .. "
Your impressions of people who dislike and unsub are top notch 👌🏻
Something I've thought about would be hiring a college student majoring in some field related to customer service or sales or real estate, and hiring them as a "property manager intern" and paying them less of a cut (say 5% instead of 8%) of the rental income to do the same thing that these property management firms do. Obviously the screening process for anyone to fill this role would be way lengthier and actually going through with it would be riskier than the traditional route, but I'm sure there are students out there who would love to have the work experience and be willing to prove themselves to have you as a reference for later jobs in a similar field after they graduate. Thoughts?
Problem is training someone to be competent in management and real estate wouldn’t be worth it. Also, generally these people are actually licensed property managers.
That's like hiring an accounting student to do your accounting. Risky since usually you'd want a CPA, lol.
I came up the same way. Saving every dime, r-habbing them myself... Always poor and on a budget. But When I hired a property manager things got better, less stress and the tenants where less likely to complain and cause issues when they had a 3rd party to be accountable to. This was especially true in cities where tenant rights are strong and the pay off could be large which, of course, incentivizes tenants to submits claims.
Speaking of photos...what camera do you use Graham? The difference of those photos are drastic. Btw I passed my real estate exam last Monday and I consider you a mentor...I've seen just about every one of your videos and I intend to become a successful agent and investor. Thank you for your dedication in making your videos in details.
Thanks! It was an old canon EOS, can’t remember the model. Congrats on passing man that’s awesome!! Well done!
The Canon EOS D80 DSLR is good but it's like a grand and change but, it's well worth it
Great tenants are worth a lot. Take very good care of them.
You are probably coming out ahead with no rent increases for great tenants.
They don't trash your property, they take care of it.
agreed!
I never want to manage properties. People are so needy. If I'm in real estate it's with a property manager / REIT.
It's not as bad as you'd think. If the place was closer and more money per month, I'd probably still just do it myself.
Love your philosophy of not raising rent, helps inspire loyalty.
Confirmed: I didn't like this video, and I contracted Ligma.
:(
I rent in LA Mid-Wilshire, and our landlord just sold our duplex for 1.6 million. We had been paying about $2200 a month, and our previous landlords barely raised the rent. The new owner/landlord told us he was going to tear the place down but still raised our rent as much as he could (3%). It sounds like Graham would be a much better landlord.
Rent controlled units would be a different matter. I raise rents the maximum allowable on rent control. You have to. As a land lord you put yourself in a very precarious spot if you ever want to sell and get market value with under market rents.
God bless the good landlord that doesn't keep raising the rent.
for all credit card, PayPal, western union, cash app, bitcoin funding up to $15,000 or more contact Matty via whatsapp @ +15186023105 OR mattyw193@gmail.com
This was the video that started it all for me. I was at the gym and trying to find some original music when the UA-cam Algorithm put this on my feed and I've been learning more about money ever since.
An ad every 3 minutes? Damn
5* minutes :)
The ads help tremendously in the algorithm. Look at my socialblade stats...views up 70% since I implemented an extra ad in the video. UA-cam loves that ad revenue.
Get youtube premium no ads ahhh how nice
or an adblocker
Graham Stephan UA-cam doesn't love ad revenue; You do.
Hi Graham, thank you for the video it was really informative. In terms of your current situation, even though you are having an overall positive experience with your Property Manager right now, the effects of their management will not be seen until approximately 12 months down to track to show whether they have taken care of your property (keen to see a video of what you think after 12 months).
In terms of the issues that you were previously experiencing such as conducting walk-throughs, maintenance and fixing of the property you can get current tenants to conduct walk-throughs of the property (advertise a month before the vacate the property). You can get tenants to directly coordinate with maintenance to come out and fix the property so that you do not have to be there. In terms of the day to day management of the property you can get one tenant from your property to act as sort of a Property Manager and report to yourself and assume a bit more responsibility with the management of the property with the above tasks (you can repay them with reduced rent).
Like you said it is almost impossible to find someone that can take care and look after the property as much as you do, so I think the trick is to reduce the stress of property management by using various tips and tricks.
Sounds to me your still managing your manager so what’s the point of the manager ? 🤷♂️
I'm agree. Good pictures are very important, but despite being something so obvious, many people do not take it into account despite being professionals in the sector. The professional photos you sent to the property manager helped them to get more potential clients interested and at the same time increase % the rent.
Install blinds in dining room $90.00 that takes like 5 min insane, Take Care Graham . . . 🦊 😎
😢
It includes the cost of blinds at least
Sounds to me like you made it to the next level of landlording! Stay blessed!
The way I see it, my time I could be spending with my family holds wayyyyyy more worth than 10% of each property
for all credit card, PayPal, western union, cash app, bitcoin funding up to $15,000 or more contact Matty via whatsapp @ +15186023105 OR mattyw193@gmail.com
I was a property manager with a newborn. my new family and i turned a 24 unit dump (drugs, neglected mental health and elder people, bed bugs you name it we changed it and handled it.. my boyfriend quit his job to help with our newborn and we were successful. now its full and sold and kids live there police and neighborhood thanked us. Im now looking into getting my real estate credentials and I really appreciate the videos.
That’s awesome!! Well done!
Almost done ✅ catching up 😂
I think it’s justified to pay seven dollars for a lightbulb because you’re giving the property manager the responsibility of calling the tenant calling a repair man or handyman, scheduling, and verifying the the change or repair. Normally for our contract, the tenant is the one that changes the lightbulb and we don’t charge them any management fee anyways. So if a manager is charging you a fee that doesn’t make sense it’s best to call them or send them an email describing why they are charging you three dollars or four dollars more for a lightbulb, I think that’s ridiculous but at the same time it also depends on what their policy is that warrants that extra cost.