Managing Rental Properties (for newbies)

**stevenl** · 12-25-2010, 10:57 AM

I just started investing in rental properties and here are some of the things that I learned.

1. I have to be very organized in keeping income and expense records for tax purposes and the various insurances needed. I only have one rental property right now so the work is relatively easy, but if I get more rental properties, it would be hard for me to handle.

2. I have to handle the renting of units, from advertisement, applicant screening, etc. I learned quite a bit about checking credits and references. I am glad that I don't have to do this often.

3. I have to manage tenants. I've heard scary stories about getting phone calls in the middle of the night, but that has not happened so far - knock on wood. I have to admit though, when my phone rings in the evenings, my first thought is, "Is this a tenant calling?" Thankfully, the group that rehab my properties is standing by.

My monthly cash flow from this rental is okay but I am beginning to doubt whether the managing work is worth it.

**Carla Hailey** · 12-28-2010, 12:41 AM

Hi I'm Carla and I'm new here. Thanks for sharing this nice information. This is a great help to those who want to start investing on properties like tax lien and other things about real estate.

**Becky** · 12-29-2010, 07:38 AM

I'm beginning to dabble into the investment side. What kind of return is standard (if there is one) before investing into a rental?

Basically, how much money should you be making percentage wise for it to be worth the head-aches involved?

**Matthewbrown** · 01-07-2011, 04:18 AM

Very nice information.It will be helpful to those who want to invest money in real estate.

**cfbinc** · 01-21-2011, 04:56 AM

Stevenl, thank you for sharing that.

One of the things I would like to add on the list is respecting your tenants. The Golden Rule of do unto others..., when it comes to landlord/tenant relationship makes things much easier. Treating them as clients and showing them concern for their well-being makes them conscientious of how to treat you in return. And it makes things so much more pleasurable knowing that they're happy to live there.

Becky, the answer to your question regarding how much is worth the head-ache really depends on you. I'll give you some figures on Investment Properties in Buffalo New York. Doubles in a decent condition ("decent" meaning at closing you may not have to make repairs, if any, it wont be over $5k) can be bought for $55k. With 25% down, your mortgage would be around $400/mo (tax included). With sanitation, water and insurance, it's an additional $100/mo. So that's a total of $500/mo on expenses.

Rental income may range from $500 to $600 on average, for our calculation, let's say $550/mo per unit. So that's a total income of $1100/mo.

That gives a cash flow of $600 ($1100-$500). A property manager may ask for 8% of the total monthly income. So that brings your final cash flow of about $512/mo ($600-$88).

So now, the question is, is pocketing $512/mo worth the headache? That includes the property manager lessening the headache of course.

If you'd like more information on these types of investment properties, please contact me. The homepage of my website has pictures of these types of properties.