Streetwise Landlording & Property Management

Insider's Advice on How to Own Real Estate and Manage It Profitably

Mark B Weiss, Dan Baldwin

• Publisher: Adams Media
• Year: 2003
• Print ISBN: 9781580627665
• eBook ISBN: 9781440519321
• Topic: Business
• Subtopic: Business General
• Index: Business

As appealing and lucrative as property ownership can be, it isn't an occupation to be learned through trial and error. It's essential property owners understand all the ins and outs--legally and financially--for their own welfare as well as their tenants. Streetwise Landlording and Property Management addresses all aspects of the business, from the practical to the strategic. Property management is a 24/7 job with high risks as well as rewards. Streetwise Landlording and Property Management helps you assess whether or not you're cut out for the job.

PART I



Is Property Management Right for You?

Topics covered in this part:

• What it takes to be a successful landlord.

• How to assess your property-management skills and experience.

• The pros and cons of getting involved in real estate.

CHAPTER 1 DO YOU HAVE WHAT IT TAKES?

CHAPTER 2 THE PROS AND CONS OF BEING A LANDLORD

Chapter 1

Do You Have What It Takes?

1: DO YOU HAVE WHAT IT TAKES?

2: THE PROS AND CONS OF BEING A LANDLORD

Managing a property is no piece of cake. Before you get into it, it’s important to evaluate your capacity for becoming a landlord. The ultimate rule for success in any part of life is to “know thyself.” You need to assess your skill set, personality characteristics, and the investment opportunities that are available to you.

You need to assess the investment opportunities that are available to you.

You are either a businessperson with the necessary skills to survive and thrive in real estate, or you are not. If you’re not yet ready, don’t lose heart. Provided you’re willing to make the investment of time and energy, you can acquire the knowledge and experience needed to build that successful career.

This book will help you get started on the right foot. First, consider these questions:

• Do you have the ability to say “no” and mean it?

• Can you handle different personalities?

• Are you capable of controlling your expenditures?

• Is the up-and-down life of an entrepreneur right for you? Your family?

• Are you willing to stay on top of changing economic developments?

• Can you be realistic and honest with yourself?

• Do you trust your own instincts?

Surprisingly, your answer to the last question is perhaps the most important factor in determining whether you have the necessary skills and abilities to succeed in real estate. An instinct for real estate is an internal capacity and one a smart property manager will develop. If you can’t trust yourself, it’s unlikely that you’ll be successful trusting or earning the trust of others.

The Right Personality

Property management requires a tremendous set of people skills for long-term success. Do you have the personality for owning or managing property? You have probably seen a movie or two that portrayed an evil landlord who bullied all the tenants, ignored their needs, flaunted the law, and generally got away with every dirty deed. It’s not like that in the real world. People have rights, and these days people are aware of those rights.

A good property manager has to be adept at handling all kinds of different and volatile personalities. It’s just part of the job. Sometimes you have to change your own personality from one door to the next. You might have to be the “good cop” at Apartment A and then switch over to the “bad cop” at Apartment B. You can’t take anything for granted when it comes to dealing with people. They will continually astound you.

A property manager has to look at things with a mature attitude. He (or she) must be emotionally removed from the professional duties of the job. You must develop a thick skin. It’s important that you become once removed from the people you have to deal with. If you can’t get over this hurdle, you’ll find that the chief reason for selling your property isn’t to make a profit but to get the heck out of property management.

Evaluate Your Business Skills

Moving into any business activity unprepared is dangerous to your financial well-being as well as to your mental health and family life. Real estate is full of wonderful opportunities. It’s a great way to build wealth and security. However, if you don’t know how to play the game, there are just as many opportunities for disaster.

Developing Your Skill Set

If you do not know what skills you need, you will need to do some research. Obviously, you’ll need a good understanding of basic business. That begins with the fundamental law of all business: Your income should exceed your losses. In other words, make more than you spend. That’s obvious advice, but you’d be surprised at how many otherwise smart people get so wrapped up in property management that they forget to apply it.

Family and Personal Life

How your career in real estate affects your family and personal life depends on you. The key to balancing a successful business and family life is to never forget that you’re running a business. Yes, you may be providing a roof over someone’s head, an opportunity for a business to grow, a retirement nest egg for yourself or some “nice little old lady” investor, but you have to put the “warm fuzzies” aside when it comes to managing the business.

You’ll also need to know what kind of rental applications and disclosures you are required to use for tenants in residential property. It’s against federal law to discriminate, as defined in the Civil Rights Act of 1964. If you demonstrate that you have problems with certain kinds of people, the law could make certain kinds of problems for you. You’ll also need to know the local and state requirements in this area. Your research will involve a lot more than checking out locations.

Furthermore, you’ll need to find a good accountant, lawyer, and banker. Get to know the real estate brokers in the area. Participate in community and real estate industry programs geared toward new property owners. There are more resources, many of them free or at affordable prices, than you can probably imagine right now.

In addition to the classroom-style lectures, you can gather up a wealth of printed material on everything from sound business practices to local rules and regulations. Books, brochures, fact sheets, and all kinds of handouts can provide all kinds of essential information.

Go Back to School

One of the best ways to acquire hands-on experience in property management before you make the full commitment is to attend classes that your local board of Realtors sponsors. You’ll find them well worthwhile for many reasons. They’re great sources of information and are usually taught by licensed real-estate professionals who know the “book learning” and the “real world,” as well as the differences between the two, particularly in your local area.

One of the real benefits of these classes is the opportunity for cross talk with your peers. Many of these folks are in your position, just learning the ropes, but others might be old hands brushing up on their facts and figures or getting a look at a new business arena.

Never be afraid to ask questions at these classes. The only dumb question is the one that’s not asked, and that’s especially true in property management. Another benefit you’ll reap will be the “dumb” questions other participants will ask. You’ll be surprised at how much valuable information comes out of those question-and-answer sessions—you’ll frequently hear people exclaim, “I never even thought of that!” Learning even a small bit of information can often be worth thousands of dollars or even more once you get into business.

Adopt a Business Attitude

Success demands that you act and react as a businessman or businesswoman. That often requires you to act in ways that might seem offensive to friends and relatives who see you in action. That’s okay. You’re not dealing with friends and relatives but with people you depend on to do a day’s work for a day’s pay. Your tenants depend on those folks too, but you’re the one who’ll get all the grief if the job’s not done right and on time. You must be willing to be firm and conduct yourself in a businesslike manner.

Adopting this attitude doesn’t for a second mean that you have to become angry, mean-spirited, or gruff with people. It just means you have to treat business people as business people. They expect it and respond to it. And with most people you’ll find there’s plenty of room for common courtesy once the business relationship is established. State your needs plainly and honestly. Your objective for the given task is efficiency, thoroughness, and thoughtfulness in owning and managing your own property.

Always Be Prepared

Realize now that you will at some time have to face challenges and crises that you do not necessarily know how to deal with. You’ll find unexpected opportunities. You’ll enjoy a sense of freedom unknown to many people in today’s business world. Despite all the challenges that may arise, you will be in a position to call your own shots, be your own boss, and control your own destiny. Although this book does not have all the answers, it will offer you a lot of assistance along the way. More important, it can help you be really prepared to face and overcome the problems you will likely face and to help you excel in your new career.

People Skills

Property management involves many things: location, market trends, real-estate taxes, “crunching numbers,” projected rents versus actual income, maintenance and repair, depreciation, and many other physical and financial concerns. But the most important aspect in any building or real-estate transaction is the ability to deal with people. If you don’t learn how to handle them, they will surely learn how to handle you. The better you are at dealing with people, the better the deal will be for all concerned.

How Well Do You Deal with People?

The answer to that question will give you a pretty good view of how you’ll likely deal with people in the real-estate business. Remember, the stress of the job doesn’t come from the task at hand but from dealing with other people. The crack in the bathtub isn’t the real problem. The real problem is the guy threatening to sue if the entire tub isn’t replaced before breakfast. The problem is your plumber, who decided to take a week off to go hunting in Colorado without telling any of his customers. The problem is the new kid at the supply store who doesn’t know where the tub-and-tile section is located. People looking over your shoulder, second-guessing your judgment, and expressing unrealistic expectations are your real problems.

There are many personality challenges out there, and this book will come back to some potential problems. For now, it may be sufficient to note that it’s important to curtail as many of these types of problems as soon as they arise. For example, when it comes to dealing with workmen, it’s important, and sometim...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Contents
• Acknowledgments
• Introduction
• PART I: IS PROPERTY MANAGEMENT RIGHT FOR YOU?
• PART II: WHAT YOU NEED TO KNOW TO GET STARTED
• PART III: THE INS AND OUTS OF MANAGING PROPERTY
• PART IV: ENLISTING PROFESSIONAL HELP
• PART V: OTHER ISSUES TO CONSIDER
• APPENDIX A: Additional Resources
• APPENDIX B: A Few Comments on Federal Law
• APPENDIX C: Property Management Forms
• APPENDIX D: Glossary of Terms
• About the Author