This article is transcribed from The Accidental Landlord podcast. You can listen to the full episode, here.
Welcome, Brent! What was it that got you and your wife into investing?
In 2015 I had been working as a children's pastor at a church and didn't get paid a lot. You don't get into it for the money. I started reading Rich Dad, Poor Dad, and that got the wheels turning. I started listening to relevant podcasts and realized there was a whole world out there of real estate. It sounded like a dream to me. I thought surely there was a way to make it happen.
I started telling people what I was doing and my parents mentioned they had a piece of property they wanted to sell to buy rentals. They offered to partner with me. I found a fourplex and became the property manager that way. I simultaneously fell into another property at the same time and it's been fun.
Do you still have those properties with your parents?
Yes, I do. I don't manage them myself anymore, and turned almost all of my properties over to property managers at this point.
That's a big decision. Some people view management as an unnecessary expense. It sounds like that's how you started; is that accurate?
Yes. At first, you're just praying nothing like a water heater breaks. Because, what do you do? At first we didn't think we could afford a manager.
We got the properties in 2016, and we got a management company in January of 2021. We ended up getting to the point of owning eleven rentals. I talked with another investor who told me that it was a huge benefit to him to hire a manager for his properties. I thought maybe there was something to it, and three months later I made the choice to hire a manager.
What are some other lightbulb moments for you?
A lot of this is mindset. I think we all have limiting beliefs on what we can take on and do and so it's been a stretch. One, you need to actively go do something to get leads. And two, you don't have to do all the work on your own.
What was hiring someone like for you?
My wife was managing the properties and I was doing maintenance. When we finally decided to do it, my wife met with the management company and they hit it off. There was a lot of alignment on our hopes and how they do things, so we decided to do it.
We had a bit of a trial period for a few months where we gave them one property, and then handed the rest off. It's been about a year and a half and since then, we've only visited the properties once because a water main blew and was unavailable. We didn't have to do anything but just checked on the tenants.
Do you think the company is doing a better job? How do you assess their success?
They're doing their job. We haven't had any turnover. We hadn't raised our rents at any point on our tenants, partially because we didn't want complaints. We handed it to property management, and they raised rents after three months and all of the tenants are still there. Everything is taken care of and they're likely doing a better job than me. Property management wasn't my main jam, and it all had to be me fixing things on my own. Now they have a team to do it, and things are generally cheaper.
a limiting belief I see for accidental, self-managing landlords is that they are conflict averse with tenants and don't want to raise prices. the downside of this is that you can fall behind on rents by thousands of dollars.
In our area, our units would rent at around $1,400, and we were still charging $750.
To listen to the full episode, click the link.
