6) Making Real Estate Passive Through Management & Benefits of Inheriting Tenants

Real Estate Investing with House Money

Real Estate Is Easy Interview

John Rutledge, property manager, from Cobalt Property Services. They manage 720 units. John tells us about the “resident life cycle” and what property managers do along that life cycle. Professional property managers charge 6-12% of total revenue as a management fee. You may also see renewal fees, leasing fees, and application fees. John mentioned that you can negotiate these fees, but he would like more transparency across the industry. A very important part of this interview: make sure you’re interviewing your PMs! Ask about how often you’ll speak, fees, property type they focus on, termination clauses, and more. Beyond the content of that interview, though, make sure there’s a general fit. Owners should work with PMs on rental rates – that’s one thing PMs shouldn’t do on their own. John outlines which kind of owners should self-manage, and which should hire PMs. Finally, John tells us how he makes real estate easy: frees up owners’ time!

Mortgage Minute: Jasmine answers the question: what are points?

House Money Weekly

In this week’s house money blog 105 deep dive, your hosts discuss inheriting tenants. There are some benefits and downsides to inheriting tenants. This week, we’re focusing on the positives. Lauren currently has 3 inherited tenants and has had great experiences so far. And she hasn’t had to renovate the units yet. She’s also been able to get small rent increases over time. Tom’s experience is more of a mixed bag. His focus is making properties safe first. Alan points out that vacant units sometimes tempt investors to renovate too much. Alan also adds that closing in the first week of the month means you get most of the rent credited to you at closing, which is about 45 days before you make your first payment. It also bears mentioning that you can always have a vacant property later. Tom has actually made 2 different offers before: one for a vacant property and one for inheriting problem tenants.

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Teatime with Tom

Tom wants to talk about bullsh*t fees. Prime example: ordering a stove for $X, then adding removal fee, installation fee, extra cords, etc. Costco (not a sponsor, unfortunately) has an all-in-one price. Companies are getting creative with these fees. Beware of them. Get curious. Ask questions up front. That’s what Lauren does. Alan, on the other hand, swears by scratch and dent for long-term rentals. The house money podcast hosts are pro transparent pricing.

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