415: Landlord Best Practices, Hybrid Property Management, Tenant Selection, Eli Secor

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It is my pleasure to welcome Eli Secor. He is the co founder of Landlord Gurus and we're going to talk today specifically drilling down on some great management management techniques and strategies, some tools you can use and especially we're going to go into what I think a lot more of you should be doing and that is self managing your properties remotely from a distance. As Bette Midler would say, I've done it for years. A lot of our clients do it, but not enough of our clients do it. And oddly we have found that it is actually sometimes easier and less time commitment to self manage your properties than to manage your manager. You can do it either way, as you know through our network, but we really want to recommend the self management idea. Eli, welcome. How are you?

I'm well, thank you Jason. It's a pleasure to be here.

It's good to have you. And you are coming to us today from tenant friendly Seattle where nobody wants to buy rental properties.

Yes. Yeah, we are an island in terms of landlord tenant law, that's for sure.

Yeah, good stuff. Well, hey, you know, just give us a, like a broad view. We'll drill down on things, you know, just in terms of your general philosophy about landlording, some of your favorite tools, wherever you want to start and we'll go from there.

Okay. My philosophy and philosophy about landlording is that I want to provide a great product and also an experience for my, for my tenants while at the same time being able to do other things with my life. I believe in quality and at the same time, you know, I've got lots of other things I'm doing and landlording is a part time project for me. I do it for a relatively small number of units but I'm all about finding better ways to manage and having a, having more time in my life.

Right. So what are some of those better ways, those best practices?

Well, we write a lot about, you know, property management software and we found that those products can really streamline the process of managing property. I go to the property, you Know, a fraction of the number of times that I used to. I'm not carrying paper anywhere anymore and you know, products, I'm using a bail right now.

You know, we have relations on the show.

Yeah, you have. Yeah, yeah, they do a great job. We have partnerships with most of the other products out there and it's a, you know, some are a better fit for, for other people. You know, I mentioned pay rent to you not, you know, before we started. And they're great if what you really want to do is get that electric funds transfer every month to your bank and we found that everybody likes it. So if that's just what you want to do, pay rent is great avail. I use because it does the full, the full spectrum. I can go from listing, you know, broadcasting, syndicating my listing all over the Internet to screening to collecting rent, writing a lease, you know, the whole deal.

And most of them are doing that nowadays. I mean, hemline does that. A lot of them do that nowadays. You know, of course, using software can be very powerful tool and it can do a lot for you. But other than the tech, which we've covered a lot, or that technology of various software, you know, management software programs, what else? Like any best practices in terms of marketing your properties, screening your tenants, relating to your tenants and dealing with them and things like that.

Yeah, I'm sure this is obvious, but good, good photos are.

Oh, that's not that obvious, my friend.

Yeah, it's really important. You know, you got to get the lighting right. And I don't do anything sophisticated. You know, it's all on my phone. But, but I do manage the light. So you get, you get a good representation, you know, that getting a clear and thorough listing so that the, you know, the renter has a good idea what they're getting, even though they almost never read it. But having that all clear, presentable, the photos are the first thing that that rental shopper sees and it determines whether or not they look at the listing and reach out at all.

One of the things we recommend is that people hire a real estate photographer. There are photographers that are just real estate photographers and pay, you know, 149 bucks, which is about all it'll cost. Okay. To have them come when your property is looking its best, right. And get that set of photos for your property. You can use it for years and years and years and years through multiple, multiple tenant turns. But if you just purchased a property and it's all turnkey and it's looking good, spend that money, get a professional Photographer to do your photos and you will use those for so, so long. It's fantastic. You know, if you were at a time in your property ownership where you just did some improvements to the property, that's an ideal time before a tenant moves in to get a professional photographer over there and get that set of, you know, 30 pictures for your rental properties and have, you know, these on each of your houses, label them in your computer. You'll just use them over and over. Pictures has a thousand words, so I couldn't agree more.

Yeah, I'd suggest adding video to that at this point.

Sure. And they do that.

Different platforms enable you to add a video and others don't, but to have it and every, every one of them. And I'm talking about Zillow and you know, apartments list and all those and Craigslist, not all of them, you can support video at this point. But to have it, you know, it is invaluable and you can send it to somebody. So another best practice in my mind is to have a, a bit of a discussion which with each of the people who reaches out to you where you just establish a little bit of rapport. I value niceties, you know, thank you for your inquiry. And I find that depending on how they people respond, some people just won't want to take the trouble to even kind of have a dialogue. And in that I always ask three questions and there are many more that you could, the pre screening questions which get you set up to figure out on both sides whether or not this is a fit. And I keep it simple. Do you smoke, do you have pets and do you make a multiple? I use two and a half times the rent, you know, each month after any large debt service. Basically, you know, obligations. So if I, if I do those things, I then have narrowed down the, the pool significantly to the people who, who are willing to do it and, and can answer those questions in the way that I want to. So that's a, that's another step. I also really value meeting attendance, ideally.

In person, but, but again, you're talking local management. Well, that's true nationwide management. So. Yeah, you know, I'm glad you brought that up because I tell you folks meet them on Zoom. Yeah, just jump on Zoom with your tenant and record it. Okay. So you have, you know what these people look like. Okay. And this is not for an applicant because that'll just, that's take way too long once you've chosen someone. I mean you could do it for applicants. God forbid if you get like a Criminal. Right. You know, you got them on video. Right. So that's good, right. If you ever need that, which I can't imagine you would, but you never know in this business. Something could happen. But you know, you get them on there, you have like a talk with them, you have an understanding. And because it's a face to face, even on Zoom meeting, sometimes it's much more effective. Actually, on Zoom, you really are setting the stage for the way that relationship is going to work.

I have done that a couple times. The pandemic led me to do that. But even more common it has been the scenario where a renter is moving from out of state and they just can't coordinate being, being there to look at in person. So I've done video tours with, with prospective tenants and, and you know, an upside to that is that especially somebody who's relocating, they got to move and it's a little harder for them to find a place. So if I, if I make it easy for them, they're more likely to want to rent for me.

Right.

And you really, you're right, you, that you really can get a pretty good feel for people. And that falls under the category of meeting, meeting the tenants in mind.

Yeah, I agree, I agree. And you know, if you meet them on Zoom, unlike in person, I mean, here's an advantage of the virtual meeting, right? You're probably going to get to see their house. Is their house a disaster area? Is it a total mess? You know, do they have a meth lab operating in the background?

Right. Yeah, yeah.

So you might be better off meeting them on Zoom than in person. See?

Yeah, yeah.

I remember one landlord, you know, this was in the old, old days when everybody thought of it as a local business. And you know, I mean, this was when I was like 19 years old. And I remember one investor talk from stage at a conference I was at, he said, always walk out with them to their car and see how they're. They keep their car. Is it unwashed, dented up mess with fast food wrappers strewn all over, or is it a car that's like in, you know, presentable condition? Right. That's probably how they're going to keep your house. But I will tell you that my own mother does not care about her car in the least. Her house is impeccable. So I don't know.

You can't, you can't.

Nothing is foolproof, you know.

Right, yeah. That actually goes along with that. A little bit of email dialogue that I was mentioning before. Like if you, if you Find somebody who can write in complete sentences and.

And doesn't type in all caps like they're yelling at you.

Yeah, yeah, a little bit of punctuation, you know, and it, it just says a lot in my, in my mind here.

Right, Yep. Good stuff. Okay, so you know, you're talking there more about screening or setting the tone once you've accepted a tenant.

Right.

And the application's accepted, just setting that up. What about ongoing management repair issues? A lot of landlords have said that they have good success with basically making the tenant responsible for all like minor maintenance. And then they, you know, they just never get any calls, which, you know, that's what every landlord wants. Right. What do you do? What are your practices?

There's, I've moved in that direction as I mentioned to you. I've got a, you know, background in construction. So I just, by hearing about what's, what's going on, I can kind of diagnose. But what I do mostly at this point is to put my tenants in contact with the, with the vendors. And most of them are willing to do that. They want, they want that, that I agree. Work around their schedule and it keeps from having to triangulate, you know, that.

Agreed.

Three, three different people. That's a benefit of some of the property management software platforms is that there's a rental module or a maintenance module effectively where you can bring in, you know, the service provider as well. So you're all, you're all talking together in this basically, you know, chat area.

But you know what else is really good for that? And I was so pleasantly surprised to find that on Yelp last time I hired an H vac air conditioning person on Yelp. They have a whole interface for that now.

Interesting.

And it really just makes it very easy to hire these people remotely. Now of course you can use some great tools are thumbtack, taskrabbit, Yelp, we have Angie's List. You know, we have all these great tools nowadays that make it so easy to remotely manage your properties. And the amazing thing that I found is when I started self managing the first time, my first long distance self management experience was about 14, I guess 14 years ago now. Yeah, happened by accident. And I found that the tenants are like your best resource. They will find vendors, they will shop vendors, they will read their reviews. You know, they. Most tenants are good people, right?

Yeah.

We've all heard the stories of the bad apples, but the vast majority of, you know, 98% of them are just great people that just want a nice place to live.

Right.

And they're our customer. Right. We have to remember that. Right. This is our customer. Okay. You know, they'll just do that work for you, like, get bids and recommend the best vendor. And, you know, they tell me, like, their impressions. I get an email. You know, I met with three air conditioning contractors that came by yesterday, and I really think this one's the most professional. I looked up the reviews on Yelp. I mean, I couldn't believe it. This is more than my property manager would have done.

Yeah. Yeah. Well, that's real research, which. My only quibble with, you know, the Angie's List and those types of platforms is that there's some unknown quantities. So somebody who, who, who will use a platform like that but then take the extra step is. Is really invaluable. I had a tenant who would collect the quarters, you know, from. From the laundry machine, because that was three hours away and the laundry machine was always filling up with quarters, and then it stopped working. So I'd have him do. Do that. And I've also found that if I find the right handy person that I can get them to cover, you know, when I'm off on vacation. Yeah. And I make it. I make it good for them. And it's win, win. You know, tenants get to know them as well and, and, you know, it's a. It just goes smoothly.

Right, right. You know, tenants like to have a sense of ownership. Like, the good ones are happy to take on some responsibilities. Okay. And do some of this stuff. So. Yeah, that's great. Talk to us about some other best practices, if you would.

Yeah, well, just based on what you just said, I have one. One comment, and that is that I have a lot of tenants who say that they really like dealing with me a lot more than the management companies that they've dealt with in the past because it's so impersonal. And that doesn't mean I'm perfect every time. It just means that they have a. They have a contact to go to one person and the same person every time. And I think that may go into what you're saying about how they're willing to do the work to help out, you know, and get. And get it done on their schedule, you know, to some extent. Extent, too. But another best practice would be when you're writing up a lease. Yeah, I guess I'll just comment a little bit on. On our market. I really believe in belonging to the local rental housing association.

Yeah, like. Like the Apartment Owners association or Rental Landlords association in your in these local communities. And you know, you can join those from across the country. That's something that we have found. A lot of our people have done that. You know, they'll live in California and they'll own property in Florida and they'll join the Florida Landlord Association. Right. And you know, it's 40 bucks a year or something like that. And that'll just be a nice resource for them because they'll have eviction attorneys, resources, networking, all kinds of contractors and service providers and education too.

Yeah, I just found a paving contractor recently. But on the, on the forum on the local rental housing association, which is great here. And one of the things they do for us is they keep the lease documents absolutely up to date because the laws are changing. So those are the very best lease documents that we can get for this, this location. So, yeah, like you said, there's a lot of value to that. They do seminars, references, documents, you know, that, that, that really is a benefit, I think. And you're supporting an advocacy group as well. They do a lot of lobbying and you know.

Right. That are, they're lobbying your, your local government or your state government to get the right laws passed in your favor. One more thing. I want to comment on something you said a moment ago, Eli, and that is about how the tenants like dealing with you. And most people hear that and they think, oh my God, that's the last thing I want to do is talk to tenants. Right. I would really encourage you to re examine that belief. And here's why. Like I said before, most tenants are great people. They are. The vast majority of them are wonderful. Okay. And when they have that social pressure of maintaining a relationship with you, their landlord, they don't ask for a lot of stuff. When they have some amorphous property management company, you know, and they see an aunt in the house, they're gonna, you know, send a thing or call them up and say, hey, send an exterminator. Oh my God, you know. Right. Which I wouldn't do. Right. You know, but when they're maintaining that relationship with you, a person, they tend to just take care of stuff themselves much more often than not because they have that social pressure of making sure that relationship a good one. And with a management company, it's not this way. It's. It's just a different. It's a different avenue. And so many of our clients, and definitely myself, have been surprised that it actually takes less time to self manage a property than it does to have a property manager. Can you comment on that?

I Can I, can. I have some experience with hiring property managers as well. And if nothing else, I think the contact, you know, a maintenance request for, for example, there, there are more steps to it. You know, I can, I can resolve an issue with a tenant with. I've got the tenant who's willing to cooperate with me, help out, you know, on timing, you know, maybe contacting a vendor. And I've, you know, ideally it'd be nice if I had the vendor there already. I can, I can put the three, the three of us together really quickly and get, and get it done. Whereas I find that I often want more information from the property manager before I give the go ahead on a repair because I want to understand it.

Yeah, right, right. There are times in life when a middleman is beneficial and there are times when it's not. And in the property management world, a lot of times it's just better to be directly dealing with the tenant. Okay. It depends. In some things it's better to have a middleman. Right. You know, like, it just depends what it is in life.

But yeah, brokers, you know, you need people who, who know the field really well and are all set up.

But, yeah, but, but it's not just that. It's, it's the ability to like take for example, a broker. Right. If you have a real estate broker in a deal, you know, that broker can follow up with a potential buyer if you're a seller or the other way around without appearing anxious. Right. And giving away your negotiating position, giving away your cards because they're just anxious to make their commission. Right. And everybody understands that that doesn't sort of give away how motivated is the buyer or seller in the deal. Right. But if you're dealing directly, then the counterparty is going to know like how anxious you are. Right. And hey, I got to do this deal, you know. Okay, well, we'll raise the price, you know, so that's helpful too. So it just depends. It's different with different things in life. Isn't.

Absolutely is. And before we started, you mentioned that finding a realtor to help out in a local market when you're across the country can be a great asset. And I agree with that. Like I said, if you have a handy person as well, that's great. If you've got two of those, you're really set to have a pretty smooth ownership, I think.

Yeah, you definitely are. And I love how you keep saying the politically correct handy person. And I mean, I heard a lot of handy people in my life. I've Never had a woman come. It's always a man. Just pointing out the reality. It doesn't seem like women want to do that crappy job.

There may be something to that.

Yeah, they'd rather work in a nice office with a Keurig coffee machine, I think.

I won't comment.

Yeah. But anyway, the hybrid approach to self management, you alluded to that just now when you talked about having a realtor in that local market. And this is the exact strategy we recommend. So when we recommend self management, as we were talking about before we started today, we recommend that you have a realtor or even a property manager, but a property manager offering a la carte services.

Yeah.

Where all they do is handle the tenant turn. Okay. So your tenant gives notice, they say they're moving. You call up your realtor or email your realtor in that local market. They, you introduce them to the tenant, they go over there, they inspect the property, they manage the move out dates, you know, they, they manage the access to the property. Once that tenant is out, they do the walkthrough, they send you a bunch of pictures, they tell you you should really charge them for this, that and the other thing. And then you can send that email to the tenant notifying them of what the deductions are going to be from their security deposit. They'll line up the contractors and the workers to do whatever needs to be done. They'll advertise the property and market it. They'll screen the tenant if you want them to, or the advertising and marketing you can do remotely now with the software. It's really quite easy to do it, as you mentioned, and I agree with you. And then they'll do the walk through for that tenant before moving them in. And then throughout the year, the next two years, as long as that tenant stays, they'll be a local contact for you if something comes up, right?

Yeah, yeah, absolutely. And, and like you said, you only pay for what you need in that, in that case you're paying, you know, a la carte when you have, when you have a need. And we've used that model even where we'll do the, the advertising and then so that the person, you know, the local person is opening the door and showing the tenants around, you know, now you can just send the interested party a link to apply online and pay that pay themselves for the screening. There's no, no application fees, which here in Seattle are illegal. And you can take as much or as little of it as you want. And at this point you can do a lot of it remotely. And one thing that we find that people like is a visibility into the operation, even if they want to leave a lot of the responsibility with the local person to write leases or screen or any of that type of thing, you now can use the same piece of software and be able to see what's happening, who the applicant is, what their reports look like. And all your maintenance is on a platform as well. Then you can see that, you see the pictures come in that get submitted.

It's great. Some of these platforms are very handy and I really do think they are displacing the property managers, which is either going to get some of these bad property managers out of the business, as it should be, or it's going to make them up their game and offer a different suite of services. Because really, it's a very enabling tool and you can do this remotely. And it's just really quite easy, folks, I'm telling you, I've done it myself. I do it myself now and it's great. So I really recommend it. Eli, wrap it up for us with just anything else. Any questions. I didn't ask you any things you want to share, share that we didn't talk about.

The one thing that came up in terms of best practice is that I believe in calling references. And it doesn't have to be you who does it. To your point, you know, you can find people that, that will do it, but we, we always recommend calling at least one employer reference, excuse me, and one residential reference. And again, when you ask for those contacts, it may weed out the people who know that they don't have people that will say nice things about them. And I keep the questions really simple. I've got a, I've got a list of the questions and even tell us.

What some of your questions are.

Well, they have to be pretty simple. Now, a lot of property managers, if you contact them, they could pretty well just say the yes or no. So they have to be simple questions. But so I verify the basic information. Did this person live at this address from this period to that period? Did the rent amount that they cited agree with what they were actually paying? Was that, you know, is it true? Did they make payments on time? Did they meet their obligations otherwise on time and satisfactorily? And did they cause any disruptions to other tenants or neighbors?

Right.

So there. I think I have a few more on my list, but that covers it. And it's easy for people to reply and they generally do.

So here's another technique that I hear sometimes Some landlords will say if you're going to call references, don't call the current landlord, call the one before that. Because the current landlord, if they're bad, they may want to get rid of them. They may say good things just so you'll take them. What do you think about same with employment, by the way, folks? It's the same thing with.

Well, that's truth. Yeah, I, I try to contact as many as I can and that I will include, you know, current landlords and employers. But I go back as far as, you know, two or three of each employment and residential and you may get a mixed bag. And that's telling as well.

Yeah, good stuff. All right, well give out your website and tell people where they can learn more.

Yeah, we're@LandlordGurus.com no punctuation or anything fancy. LandlordGurus.com and you know, we've got contact form there. If you got questions, you know, get in touch. We're pretty accessible.

Good stuff. Eli, thanks for joining us.

Absolutely. Jason, pleasure to be here.

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