“Someday changing filters, fixing light bulbs, and answering phone calls for plumbing issues at 2 a.m. will cause you to exit self-management.”
“I tried to add up all the hours I worked on my properties but gave up after six and I was only talking about my renovation.”
As a non-shy 27-year-old investor who proclaims loudly of my self-managing and Empire Building status, I hear those and more comments often — if not daily — and they make me giggle every time. While self management has had its ulcer-inducing moments, over the years I have learned 10 tricks to make doing it myself (DIY) as a landlord save my time. In fact, sometimes it feels it pretty passive. While not quite as passive as hiring a property manager, since I get two calls (repair man/tenant) to their one (property manager), it has become passive enough that doing it myself is still worth the savings.
10 Tricks to Optimize Your Time as a Landlord
1. Clear Concise Contract To Prevent Unnecessary Stress – In the beginning, one of the worst parts of landlording was how everything felt like a debate. I was always getting a text that said, “Do you have a moment? I want to discuss something with you and find a solution that works for both of us.” It drove me nuts because we were always renegotiating the darn lease or handling situations that should never have came up but weren’t in my lease. Plus, like always, it was never in my benefit (if it’s not spelled out in your lease or not local or state law, you have no recourse)! So I quickly ended that. I create a 16-page lease and covered everything. Now, on the off chance something comes up that isn’t covered, I handle it and then I add to it for the next renewal or tenants (you can’t change a binding contract while tenants are currently in place). After that, there was no more discussion, mostly no more phone calls. Three hour discussions have become five minutes.
2. Institute Penalties – The next important key was to have penalties. I was always told that without spelled out penalties in the lease, there was nothing you could do when your lease was violated except evict, which the tenant knew wouldn’t happen. So before, I had a tenant who I would have to either evict or put up with. Now I have a third option, I charge them a fee for violating (think traffic ticket) and they continue on occupancy.
3. Charge Your Tenant For Your Time – Your time is worth money; don’t undervalue yourself. I have started instituting a handling fee for having to organize carpet cleaning, vent cleaning, landscaping, filter changes, etc., at the end of the tenancy. The reason I started this was due to many tenants saying, “just take it out of my security deposit.” So I was having to handle things that should have been their responsibility. Now, if I have to do it, they are paying me for it, since my time is worth money.
4. Hold Their Feet to the Fire – I do not put up with ANYTHING from my tenants that violate my lease. I always equate it to the parents with rules/expectations have the well-behaved kids. Once I created a 16-page+ lease that had all of my expectations AND held my tenant fee to the fire, self-management got pretty easy. Most of my tenant management problems went away. Even now, the only time I have regrettable tenant interactions were due to not following my own advice. I have also found that people respect you holding their feet to the fire.
5. Repairs – I have a policy that my tenants are responsible for the first $100 of any repair. While I wasn’t a believer at first regarding deductibles, I am now. While this hasn’t prevented any of my tenants from reporting a valid repair, it has reduced the silly ones, like the broken refrigerator call due to not understanding what an ice maker sounds like. It also puts skin in their game for them to treat the appliances like one should. For example, using the trash can and not the garbage disposal.
6. Handy Man – While we do some large repairs in our rentals (check out our tips from doing our tile shower project), day-to-day repairs go straight to the handy man. We text so its super easy and totally worth not having to do the in and out repairs.
7. Day-to-Day Maintenance – We have a specific section in our lease that goes over their expectations regarding filter, batteries on the thermostat, smoke alarms, etc. That is not our responsibility and the occasional time we get called over an issue like that it goes right back to the tenant.
8. Create Efficiency Systems – I have my tenants text rather than call as much as possible because I can multi-task with text much better. It is easier to answer a tenant request while at the vet or on the go. I keep old paperwork and reuse the same wording over and over again. Once I find a system that works amazing, I do it over and over again.
9. Lower Rent for Quicker Tenant Installation – This is the biggest time consuming part personally. For me, the reason it is time consuming is because I try to max out my rental price. Instead of going for a number I know will rent out within a day, I go for the top market. Meaning more showing, messing with the rents, and tenants who are trying to shop around. On the other hand, if I really want it passive, I make it a little below market price so it’s a deal. It is gone instantly with one showing or maybe even a site unseen tenant and no more issues.
10. Move Out – In my lease, I have gone into great detail on what I will charge and expect on move out. I have less issues because it is all laid out — steam cleaning, vent cleaning, housekeeping, pet damage, etc. I simply write a letter referring back to the offending items.
On the other hand, here is my list of things that have nothing to do with self-managing nor even a property manager, therefore should not be thought of when trying to decide if you should self manage or not.
- Acquiring Property – Acquiring a property is tons of work — from researching the right place to finding a mortgage. None of this is done by your property manager and therefore should also not be expected to count against you when you are thinking about self managing.
- Refinancing for Any Reason – Deciding to refinance to get a better rate or buy more property is an investing choice. All of the work that comes along with it was a choice, not a requirement, to keep your rentals producing investments. Therefore, while it can add value, it is alot of work that is not required.
- Renovating Property as Part of an Acquisition – Deciding to buy a house that needs a lot of work as part of the renovation was a clear choice. It has nothing to do with self managing because you could have bought a ready-to-go house.
- Doing the Repairs Myself – Your property manger does not do the repairs themselves, so if you do the repairs yourself that is a choice and not a requirement. You could easily hire a handy man.
While it is true that hiring a property manager greatly reduces your time requirement, with these quick tricks you can do it yourself with less work while still saving the money in your pocket.
P.S. Need some resources to get your lease passive investing ready? Check out these two great resources.
First – My post on How to Create a Rock Solid Lease in ONE Evening.
Second – My Ebook. Wishing there was a resource that had explanations and addendum with the lease language already written for you? Check out my book, The Everything Lease Addendum How-To For Landlords. This is where I share all 37 of my lease addendum wording and explanations that I have put together over the years of ulcer-inducing moments, learning the hard way, and participating in forums. I create this with the hope this saves you a few of the challenges I have experienced along the way.
What are your tricks to keeping your real estate investment passive? How do you optimize your time as a landlord?0
Leave a Reply