Tell me about rental property management companies.

[Zero Knievel]

My sister, in my honest opinion, is about to fuck up big time.

 

She wants to move to Charlotte and rent out her Sevierville home.  Frankly, she’d be better off selling it, but her son wants it someday because he likes living in the mountains.

 

Thing is, as I understand it, for a rental property to be profitable, you need to do much of the work yourself or at least have a list of people who can do good work on the cheap.  Yeah, a rental management company can handle this for you, but I’m certain the contract is written so they always get paid, and any repairs come out of your share of the profits, not theirs.  For a single property, my gut tells me this will go badly.  If the management company isn’t getting paid, they’ll likely put a lien on the property.

 

I will tell her to have an actual lawyer who deals with this stuff read the contract before she signs anything, but I won’t be surprised if she doesn’t and trusts oral representations of what’s in the document…then whines a year or so later when she’s not making a dime and the house is a wreck.

 

Never mind that everything in the house will have to be packed up and put in storage…including the stuff in the yard.

[DaveK]

You’re spot on with everything you said. 
 

And - good for you for inserting yourself in her life like this. She must take your advice like we do here. 
 

Such a great brother. 

[SwampNut]

26 minutes ago, Zero Knievel said:

Thing is, as I understand it

 

You don't understand it.

 

Everyone I know with rental properties is making a killing, whether they work on them or not.

 

 

 

 

[superhawk996]

32 minutes ago, Zero Knievel said:

in my honest opinion

as I understand it

There's two great reasons to let her do her thing.

[DaveK]

You guys are such assholes. Mike don’t listen to them. You should be her legal counsel.  And if/when she needs to physically evict them you can put your badge on and be her law enforcement too. When she needs stairs repaired and painted you can be her handy man too. Then when she accuses you of shoddy work and won’t pay you - you can be your own legal counsel. 

You’ve got all the training she will need to

cover everything. Even mail collection after she moves further away from you.  Silly her - making a decision, taking a risk, living life doing new things. 
 

Who the fuck does she think she is? I’m sure you can talk some sense into her - as soon  as your done tarping your trailer. 
 

 

[Zero Knievel]

You guys don’t have to be assholes about it.  My sister lost her “dream home,” her savings, and her husband because she consistently makes bad decisions without doing her due diligence.  She’s not living in a “house.”  She and her late husband had to buy a flood salvaged double wide installed on a piece of land on a flood plain (hey, the last owner had something there so it must be a good spot).  I can only wonder how much $$$ she and her husband would have had if they simply saved their money and focused on paying off their “dream home” instead of running after pipe dream ambitions without regard to the risks.

 

IF it works as advertised (my issue)…yeah, she could make a decent income stream and not have the headache of being a landlord.  I want to know what she’s getting into because I can’t trust her to tell me the objective truth.  She frequently researches until she gets the answer she wants and stops.  I know the management company is going to have the contract written to their benefit, not hers.  I know the management company is going to want to be paid every month…regardless of actual income from the property.

 

My nephew wants the land so someday he can move back to Sevierville.  Well, I say “fuck that.”  It’s not his land until his mom passes, and he would be smart to pick a better piece of land that at least isn’t in a flood plain.  It would be less of a headache to sell the property and invest the money.  Whenever something sounds too good to be true, it normally is…and my sister is looking for a quick and easy fix rather than the best solution to the problem.

[DaveK]

3 minutes ago, Zero Knievel said:

 

You guys don’t have to be assholes about it.

 

This is all I read. And yes…we do. 

[superhawk996]

No DNA test needed.

 

I wonder what she says about him.  I wonder what kind of home buying choices he would have made.  I wonder how she'd judge that vs. living in mom's basement.

[Zero Knievel]

Never mind.  My niece talked sense into her, and now she'll just sell the house and property.

[Zero Knievel]

1 hour ago, superhawk996 said:

I wonder what she says about him.  I wonder what kind of home buying choices he would have made.  I wonder how she'd judge that vs. living in mom's basement.

 

1.  I'd not try to start a business via a THIRD mortgage when I have one house I'm trying to sell (under a mortgage) and a current house also under a mortgage.

2.  I'd not start a business based on 30-year-old market data and ignore current data that says it won't work.

3.  I'd not give a total stranger an open power of attorney to "fix" my economic mess then be surprised when the guy takes several loans in my name and skips town.

4.  I'd not buy property in a flood zone.  I'd not take the property with a derelict mobile home still on the property because I think I can "salvage" parts from it.

5.  I'd take care of my vehicles so I'm not having to replace my car every few years because I don't keep up the maintenance.

 

I could list others, but most of us would learn to stop fucking up by this point.  I love her, but she doesn't own her mistakes...so she keeps repeating them. 

[Biometrix]

16 minutes ago, Zero Knievel said:

Never mind.  My niece talked sense into her, and now she'll just sell the house and property.

Glad it got worked out. Apparently, much ado about nothing. 

[DaveK]

1 hour ago, superhawk996 said:

No DNA test needed.

 

I wonder what she says about him.  I wonder what kind of home buying choices he would have made.  I wonder how she'd judge that vs. living in mom's basement.

 

Good point.  Can you imagine being his real estate agent?  Can you go back and ask them to replace the washer on the garden hose nozzle outside?  I'm backing out of the deal if they don't replace the garden hose nozzle washer. Best and final. 

 

Edited July 30 by DaveK

[SwampNut]

7 hours ago, Zero Knievel said:

 I know the management company is going to want to be paid every month…regardless of actual income from the property.

 

No, you don't know this, and it's exactly opposite of reality.  This is why we're such "assholes" because you make something up and present it as fact.  Of course there could be someone out there doing that, but everyone I know tells me the opposite; they take a percent of collected revenue.  And in fact one of my friends had to fight them against raising the price on a good tenant because they wanted a bigger pie slice.

 

[ironmike]

Been there, done that . . . This was my experience; my current opinion is based thereon. YMMV . . .

 

From '90 through 2017, I was an absentee landlord for a large (mortgaged) house in a desirable neighborhood on the north side of San Antonio, Texas. I did use a management company. At first, it worked out passably well; tenants were almost all military families (overall, great people). At best, I broke even; mgmt fees and routine maintenance ate up any residual profit.

In 2008 the economy tanked--everything changed. Fees increased, then the mgmt company was bought out, the quality of services plummeted, essential maintenance was ignored, and the military cut back on housing subsidies (off-base housing). Local laws changed, disproportionately favoring tenants both in application aspects and "squatters' rights".

The quality of potential tenants, and their commensurate credit standing, declined appreciably, but such issues were no longer adequate (or legal) reasons to deny tenancy. By 2012, I'd had enough. After the departure of the last tenants (with whom I had to threaten legal action), I had to completely renovate the home (to include repairing all the damage and replacing stolen appliances and fixtures--not even a light bulb was left).

No more renting, we kept the house as a second home for five years, selling when the market sufficiently recovered.  

The current atmosphere (2024) is not especially conducive to being a landlord--especially for a house one might care about. Get some squatters in there, and you've lost.

Raw land may well be another consideration, but that's circumstantially debatable. 

No, I have no interest in being a landlord again.

My advice . . . sell the property, pay off any liens, and invest any profits.

[Zero Knievel]

2 hours ago, SwampNut said:

No, you don't know this, and it's exactly opposite of reality.  This is why we're such "assholes" because you make something up and present it as fact.  Of course there could be someone out there doing that, but everyone I know tells me the opposite; they take a percent of collected revenue.  And in fact one of my friends had to fight them against raising the price on a good tenant because they wanted a bigger pie slice.\

 

And yet, rather than give me your experience, you just dogpiled like everyone else.

[SwampNut]

2 minutes ago, Zero Knievel said:

rather than give me your experience

 

Er what?  I gave it, and you quoted it.