| This mini guide for real estate investors is written to | | | | the newspaper, so they may drive by and talk with |
| help entrepreneurs like you with the mystery of | | | | our tenants. The prospect applicant should come |
| property management career. The investment risks | | | | ready, wanting to rent the apartments from us, |
| are higher when decisions are made without enough | | | | because we take good care of the tenants and the |
| information. By now you know that you want to | | | | apartments. |
| invest profitably in real estate or already started the | | | | This is what I want with my ads. |
| process. All the motivation is coming from your desire | | | | "My town, clean 1 bedroom apt. $500 plus deposit, |
| for financial independence. I know that, because I am | | | | utilities included, A/C, coin laundry available, 123 Main |
| with you right on the very same goal. | | | | Street, (222) 333-4444" |
| Assume you have just purchased your investment | | | | They have the address for the location, that the |
| property. It does not matter whether it is a 10--unit | | | | utilities are free and my cell phone number. Here are |
| apartment building, a small office building or a | | | | examples of first conversations over the phone with |
| single--family home. It is an attractive rental property | | | | the potential applicants (PA). |
| and you are asking a fair market value rent. | | | | PA: Hello, is the apartment available? Me: Yes, when |
| You should have no problem attracting tenants and | | | | you want to move in? My name is Ernest. PA: |
| maintaining a high level of occupancy. What happens | | | | Thanks, my name is Mary. It is for my son John; He |
| with the tenants once they move in is going to | | | | is planning to move soon. Me: Sorry, is it a strong |
| depend on you. | | | | reason way your son can't call himself? |
| The problems with property management are not | | | | (My experience tells me I may stop here and deal |
| caused by the business itself, as much as by a lack | | | | with the real party later, the relatives or friends have |
| of education. The property management is the most | | | | a different agenda sometime. In reality, I continue |
| misunderstood parts of real estate investing. If you | | | | giving information about renting.) |
| do not have good property management, then you | | | | The son is calling me later. |
| will have high management costs, bad tenant | | | | PA: Where is this apartment located? |
| relationships, high vacancies and that will be the end | | | | Me: At the corner of Main and Grand, next to the |
| of your business. | | | | gas station, across the Seven Eleven. Look for |
| You would consider these ideas in making your | | | | apartment no.30. You can drive by and get from |
| managing investment decision; I did it when I started: | | | | "Take One" box, an application with info printed the |
| | | | other side. PA: Do you accept pets? |
| 1. The money you save, by doing property | | | | Me: What do you have in mind as pet? (Reptiles, |
| management, may mean the difference between a | | | | rodents, dangerous dogs, etc are not on my list, I |
| positive or a negative cash flow for your rental | | | | ask because the applicant will talk and I can mind his |
| business. | | | | her personality). |
| 2. Managing your own properties, at least in the | | | | PA: It was my aunt' cat an she is 10 years old, etc. |
| beginning and learning the management business is | | | | Me: Yes, we accept a qualified cat with a "Pet |
| something to consider. After you become familiar | | | | agreement". The nonrefundable fee is $175. Do you |
| with the manager responsibilities and acquire more | | | | have some pay stubs from your job? That will help |
| properties, you will be able to do a better job of | | | | us to check your employment; or |
| managing professional managers. | | | | PA: No, I receive social security checks, I am on |
| 3. More management and investment resources are | | | | disability. |
| available at my website. | | | | (To assume when renting real estate that all tenants |
| How I start my property management? I went to | | | | on assistance or seniors will be bad is wrong. Some |
| school to gain my knowledge before facing the real | | | | may get a cosigner.) |
| life competition. I start my property management | | | | Me: Sorry we only take applications if the total |
| from the bottom up. My previous experience with | | | | monthly documented net income is 3 times the rent. |
| real estate renting was being a good tenant for | | | | The nonrefundable application fee is only $20 and we |
| about five years in two different places. | | | | do a credit report request and pay a different |
| Eight years ago I passed the real estate agent state | | | | company for that service. (Some applicants just gives |
| examination and I worked for two brokers and | | | | up after this phrase.); or |
| managed properties on the side to build experience. I | | | | PA: Yes I work two jobs: manager at Mac Donald |
| got my associate broker license in real estate about | | | | and telephone marketing at night. My girlfriend is |
| four years ago. | | | | working as telephone marketer. Together we make |
| We resettled in the U. S. A. coming from communist | | | | $1400 a month. |
| collapsing East Europe, in 1990. Our assets at that | | | | (This is a border line situation, they may pay for a |
| time were intangible, mechanical engineering education | | | | few months and something is happening and girl/boy |
| and big hopes. | | | | friend is gone. He/she no longer qualifies by income |
| We did not have this game of "getting rich with | | | | requirements. In this cases if the vacancy is hurting |
| properties" in the socialist economies. Actually, it was | | | | me and I cannot wait for a better applicant, I might |
| forbidden to even think about owning properties. It | | | | take them, but the lease will have a clause: "If he or |
| took me five years to comprehend there is a less | | | | she intends to leave any time, they both must leave |
| risky way of investing by using real estate properties | | | | at the same time"); or: |
| and rentals. | | | | PA: Yes, I work part time at "Printing Nice" and I am |
| For $50 and about one hour conversation with our | | | | full time student. It is my fist time out of home; my |
| previous property manager -- a very nice lady -- I | | | | mom may cosign the lease. |
| was in business. The management forms I received | | | | Me: OK, bring your mom when you want to see the |
| helped me to build my forms and gave me enough | | | | apartment. |
| confidence before the closing on my first apartment | | | | PA: We want to see it, Saturday morning at 12 noon, |
| building. I was on my way, investing in real estate and | | | | it is our time to look for apartments.(PA may put |
| managing my own properties for profit. This is how I | | | | some pressure on you) |
| started my property management career. Now, I | | | | Me: OK, see you then, at apartment no.30 second |
| appreciate a property management career or a job in | | | | floor, a sign "For Rent" is in the window/door. |
| property management a lot more. | | | | The potential applicant interview is very important. |
| I am not preaching here to manage your rentals | | | | You have to see face to face the potential applicant |
| yourself forever. For us, property management is | | | | and their pet. Watch their car how clean is outside |
| part of getting the necessary life experience to | | | | and inside and get an idea about how much that |
| succeed in this new country. | | | | person care about personal staff. |
| Dealing with people and their needs gets messy if | | | | My "good tenant" definition is: A good tenant is |
| you do not use a system. Qualifying the potential | | | | paying always on time, takes care of apartment, is |
| applicant over the telephone saves time and money. | | | | friendly and comprehends "quiet enjoyment" words. |
| Renting real estate is the toughest part of the | | | | It is bettor for me to wait for the right applicant and |
| property management job. Here is how my qualifying | | | | do not rush to make a buck. Also, I discovered that |
| filter system is working: | | | | the service to society, the humanity we share is |
| The local newspaper classified ads bring most of my | | | | coming after you take care of our business. |
| renting real estate applicants. I call them Potential | | | | Otherwise you will not be in this business for very |
| Applicants (PA) before submitting the rental | | | | long time. |
| application. I give to potential applicants enough info in | | | | |