How To Run A Rental Property And Keep Your Peace Of Mind

Hey, it's Mark Podolski, the land geek with your favorite niche real estate website, www.thelandgeek.com. and I'm really excited for today's guest because she's a little different as far as a guest and taking on a part of real estate that most people consider a total headache. But she does it in a very mindful way. But before we talk to our guests, I'd be remiss if I didn't properly introduce my co host, the professor, the brain, the flight school sherpa, Scott Todd from scotttodd.net landmodo.com Most importantly, automating your Craigslist and your Facebook postings. Postingdomination.com thelandgeek Scott Todd how are you, Mark? I'm great.

How are you?

I'm great. I feel more calm and actually just being in Terry Showers presence. The mindful landlord. Our guest today is Terri Shower. She's a real estate coach. She's the mindful landlord. She has a PhD in nothing to do with real estate, but she's been managing half of managing rental properties half of her life. Terri Shower, welcome to the podcast. How are you?

Thanks so much for having me on. I'm good.

Okay, look, when people say property management, they immediately break out in a sweat. It's a headache. I'm getting a call at 2 in the morning. The roof, the H vac, right. The laundry machine, whatever it is. My Internet's down. Damn it, Terry, help me. Now how on earth do you make this a mindful landlord type experience?

Okay, well, I think there's two things. I mean, so I manage properties for my clients who I guess failed at their little experiment at mindfulness because like, look, rental property, like we, you know, all know passive income is really a good way to build wealth long term. But unfortunately that comes with tenants and then you end up with the whole kind of aspect of providing service for them. And then you know, either things fail, you're working on a budget, or sometimes, you know, if you get unlucky, you have some unreasonable demands at unreasonable times. So, you know, as far as like, you know, some of my clients end up calling me when they basically had enough of those kind of problems. But I guess my goal with you know, some of the bringing out some of the mindfulness stuff on how you can landlord is how you can bring a little bit more Zen into that whole process because it can be like really frustrating and can drive you nuts if you let it.

Yeah, absolutely. Let's just kind of rewind the tape. Terry and kind of tell us how you started, what your PhD's in and how the heck you got into landlording.

Yeah, so I actually, when I was 19 years old, I'm from Montreal in Canada and I moved to Toronto when I was 19 to study and luckily or unluckily for me, there was no space in student residence. So I ended up in this like crazy co op house with no manager. The manager had actually left like a week before I got there. So I came in, there was garbage piling up, you know, people weren't cleaning the bathrooms, like it was just a total mess. And they voted me house manager basically within a couple of days of being there. And so that started me down this path of property management without me really knowing about it. Um, and then, you know, kind of from one, one, one step to the next. Like when I stopped studying in Toronto, I, I thought, okay, well, I'm kind of good at this. Let me rent a house and set this up. So as I moved on to do my PhD in Vancouver, I, I rented a house and thought, okay, I'm going to set this up, you know, to help pay some of my school fees. And then after that I moved back to Montreal and thought, okay, well, I've been doing this now for, you know, six, seven years and now I'm ready to do it for profit. And then borrowed a down payment for my first investment property and then kind of got on the same thing. And so one thing led to another. It wasn't like really a. I didn't have a master plan when I got into it. It was kind of the thing that I just like woke up one morning and I was like, oh, look, I'm kind of good at this, I know how to do it and let's do it full time. Wow.

Fantastic. Fantastic. So what would you say is the worst advice you hear given in the landlording space?

That's a really good question. Worst advice. I mean, I think that, like in the real estate industry, very often people put pressure on others to, you know, acquire as much as they can with the best ROI possible and with the property management perspective, like, I think what ends up happening is that people end up closing on properties in sketchy parts of town or taking on either maintenance or tenancy issues that they're not prepared for. So I think that if you try to grow too fast or if you're a little bit too aggressive by only looking at the numbers and not looking at the human and the physical side of things, I think that's where I see, like, A lot of people kind of get tripped up, so definitely that. And then, I mean, the other thing, not, you know, industry advice, but let's say more landlords speaking to each other. Like, you know, sometimes people will really sweat the small stuff. And I guess, like, the number one tip of being mindful is be able to prioritize between what's small stuff and what's not small stuff. And your peace of mind is worth way more than a 5, 10, 15 bucks more in the bank. So before you get really, like, worried and bent out of shape over something, just, like, get some perspective. Yes, it's frustrating, yes. People weren't respectful, but, like, what is this really costing me? So maintaining perspective, I would say.

Scott Todd, what are your thoughts?

Oh, I have many thoughts. Like, I like the idea. The thought of tenants does scare me. Like, I don't know, I don't want them. I see nothing good from tenants at all. In fact, I had a rental home, you know that, you know, I had a rental home and it worked out okay. But at the same time, like, the tenants just seem like they were a pain in the butt. Right? Like. Like everything Mark said, like, oh, this went wrong or that went wrong. And I'm just like, I don't like it, I don't like it. But it's obviously, if you're gonna do homes or, you know, in that space, you're gonna have to deal with them. And so you. I think you do need the strategy in order to do that.

Yeah. I mean, Terry, what makes. How, how do you sort of vet a good tenant from a bad tenant? Because you've been doing this long enough, you probably can just look at somebody, be like, no, you're a pass.

Well, that's actually, that's a great question. And it's one that, you know, as I'm kind of coaching people, like, into starting out as investors, I really feel like you can't overstate the importance of choosing your tenants carefully because you're really choosing your quality of life when you let someone into one of your units. And I don't know, you know, it's not the same, really, across all markets. But I know that, you know, here in Montreal, like, there's kind of this old school mentality of, like, let's just settle on a handshake. And people kind of don't always do their due diligence. And so my recommendation would be really, you know, take the time, fill out a proper application if I can look at just one data point. I like to look at credit history Because I find that, you know, independent of like references from employers or previous landlords or whatever it is, like those are important data points, but the credit is really just going to give me a neutral look at how that person's handling their responsibilities. And you know, I see people who've ruined their credit for like, you know, a $200 collections bill from a cell phone company. And when I see that, it's basically telling me like, how is this person handling their affairs? And if they're willing to ruin their credit for 200 bucks, you know, for a cell phone bill they didn't take care of, what's it going to be like when they're in one of my units or one of my clients units? So I really like, I really like the credit score kind of as a, as a data point. And then the other thing is that as I'm going through the application process, I really treat that like a little bit like dating. You know, that the person from a human point of view is going to be trying to show you their best foot forward. And if somehow that process isn't seamless, if they're not returning phone calls, if they're trying to negotiate weird things or like being unreliable, even in the application process, once they're in my unit, it's not going to get any better. So I would say like those two things definitely, like how they're, how they're humanly like handling the application process and then just the hard data of a credit score.

Yeah, yeah, absolutely. Scott. Todd, you're kind of shaking your head.

Okay, so look, I agree that the credit score is a big thing. How would you handle this situation? Right? Like, I mean, going to go run someone, I tell somebody, listen, I'm going to run your credit credit check. And he's like, whoa, whoa, whoa, whoa, whoa. Hold on, hold on. Before you go do that, can I please provide you with a copy of my credit report? And the reason is because I had a bankruptcy two years ago from my business failing. I had a bankruptcy. And, and every time you pull credit, it lowers my score and I'm trying to get my score back up. What would you say? You are shaking your head no, but like, it sounds like you're like, no, no.

So it's actually, that's actually a good question. There are many third party sites. So the way credit works is that if someone else is pulling your credit score, it will affect it in a negative way. But if you pull your own credit score, it's actually not going to affect it.

Right. That's what he was saying. That's what he was saying.

Yeah, but what I don't like about that is there's no way I'm going to let someone else provide me even less with a paper copy of their credit score. Because I mean, you know, with, with Photoshop now, like anybody can do anything. But there exists for this third party sites that allow the person to order their own credit, therefore not affecting it, and share it to you on the third party site. So actually on my, I wrote a blog article about this a little while ago with a link on my website to one of those specific agencies that does that. And when I have people who like give me that kind of excuse, I'm like, okay. And you know, actually, actually explain to people in the application process, if we run your credit, it's going to dock you a couple points so you can pay for your own credit score and share it with us. And we're totally okay with that. So I think that's kind of a good solution to that kind of weird answer. And then if the guy's like falsified his own credit score, well, he's just going to disappear on his own. So.

Right, okay, so, so now that, now that I get his credit score, right, what's the magic number? Because I'm looking at the credit score. The guy filed bankruptcy. Does that mean he's a deadbeat, shouldn't be in my house, or am I looking for the fact that, okay, he owns his own companies, he's got some money coming in, I can see it, I can see the money. Or am I only looking at the credit score? And if so, what's the magic number?

Yeah, no, that's again, good question. So, you know, I'll tell you, we've had this situation come up a couple times. Obviously depends how competitive the rental market market is. Like If I have 10 people to choose from and Mr. Bankruptcy is number nine, sorry, but I'm going to go with the best person who's on the list. If it's a unit for which there's less competition and like, I've had this actually happen twice, that somebody who has a bankruptcy that showed up on their credit score. And you know, if I have a choice between somebody who ruined their credit for 200 bucks to a cell phone company and somebody who had, you know, whatever, a $200,000 bankruptcy because they had a problem in business, I'd almost rather deal with the person who had a big problem because first of all, they were credit worthy at one point. And then in that, in that kind of case. Like, look, if he's the only person and I haven't had another application for a month, I'm going to then look at the other data points, which would be like, you know, previous owner, his current employment history, and then also you can get. You can get a cosigner. So if you have somebody else who's on the hook and usually someone who's, like, not in an awesome credit situation, they will be able to provide you with someone else who's going to, like, guarantee the lease. And in that case, if they have payment problems, I have someone with solid credit that I can go after, so.

Gotcha. Gotcha. Okay, good.

Very good. So, Terry, is there something that you believe is normal or wise or cool that other people will think is just absolutely crazy?

Like, in general or in landlording specifically?

Landlording in general?

I don't know. I wouldn't say that. I have super crazy views on things generally. I don't know. I mean, maybe one of the unusual views or unusual ways of looking at things is like, I'm a big fan of incremental progress, and I think that the world right now does us a really big disservice with this whole idea of overnight success. And I think that applies to investing, obviously. Like, you know, I have a sports background as well, and when I look at, you know, the sort of the talent myth, where people are kind of saying that, you know, you're not the best rookie at whatever, or if you don't, you know, do a hundred deals in your first year, your first two years, just give it up, there's no point. I think that's really a big. Kind of a big. A big lie, and it's a disservice to people. So, you know, and I'm really a big fan of incremental learning, and I feel like that's not necessarily super fashionable right now, but if I had to pick a wild and crazy view, I don't know, it's not too wild and crazy, but.

I love it. So if I was gonna get into landlording or Scott was gonna get into landlording, and we can only have one book to read prior to going into it, which book would you recommend?

Can I recommend my own book?

Of course.

Yeah. Okay. So I have a book called Mindful Landlord coming out on June 1st. And so I would say half the book is really the nuts and bolts of managing tenants and handling property issues, and then the other half is about mindset, so be it from overcoming the fear that stops a lot of people from getting into investing to then after, once you start succeeding, knowing when enough is enough, I think those are some kind of issues that often in other investing materials, they kind of get left to the wayside. So that's what I would recommend.

All right, great, great.

All right, so what is your tips to help someone who's having fears overcome them? Like, just to go do it? What's your tips? What's your process?

Well, I hate to be a little bit morbid, but I think the first thing is to take a deep breath and realize that we're all here for a limited time. And that whatever fear you have, be it fear of looking stupid or fear of not knowing your finance math, or fear of, you know, going out and talking to people, whatever it is, you know, when you put that in the perspective of the fact that you only have one chance at this, so just, you know, gonna sound like a Nike commercial, but just do it. You know, gotta just realize. And there's actually one chapter on this in Mindful Landlord. So if I had to give one tip, that's what it would be. Of course, I could talk for much longer about it. But, yeah.

Yeah, I have. I have the same philosophy, by the way. I feel like every moment so precious. Like, do you. Are you really gonna let your ruin your day because 1 out of the 7 billion people on earth said something that upset you? Like, seriously?

Yeah, yeah, yeah.

It's funny. It's funny because, you know, ultimately I think that what happens is there's a lot of people that like what you said. Like, are you fearful of what someone might think of what you said? And what. It's so funny because, you know, like, you go through your life and you worry about what other people think or remember. And you know what the reality is? They don't remember anything because they're so focused on themselves and their own lives. They really, really don't care about you. I don't mean to hate. I mean, we care about you, but, like, honestly, people don't care about you. Like, they don't care. Like, it's over with, it's done. They've forgotten it and moved on with their life. Because guess what, they got to worry about what they're going to eat for dinner tonight or whatever. So I do like that. I think that whatever you're struggling with, just freaking go do it. Because then, you know, you said you could say, I did it, man, as opposed to, oh, I surely wish I would have done this when I was younger. No, just go do it now. Have fun with it. And if you fail, who cares? Fail big, Terry will still rent you a place.

Exactly. Better to fail big than to fail small.

Yeah. Don't fail over a cell phone bill.

Yeah. I mean, Terry, can we get geeky for a second?

Yep.

All right. Is there a way. Do you automate collecting your rental payments? Do you use any kind of property management software that you recommend? How do you actually manage the day to day of this?

Yeah, so we've been using property management software for I guess, three, four years. Before that we kind of tried to do everything with Excel and Google Docs and I mean, I don't know, I feel like there's been such a big explosion in the kind of software technologies that are available to. I think by all means it's a great time saver. We use the software called Buildium, which of what's out there I found for what's, you know, available at what price. I find it's a pretty good, you know, the value for your money is pretty decent. And it has like, for property managers, these great functions of the tenants have a portal so when they have a maintenance request, they can just snap some photos of like the toilet or the faucet that's leaking, put in the request and then I can just forward it to whatever maintenance person is necessary. So that saves us all kinds of time. And you know, the. It also allows you just to email people. There's an app that's connected to the phone so you're never without a phone number. Like, it's just, I don't even know how we worked before before having a decent software as far as like automating the other stuff. I was actually talking to another investor who has his whole application process like streamlined and, and, and you know, his application form is online and then it like automatically pulls the credit and then he's actually got another app. And I'm not going to remember the name of the app, but it like integrates all the other apps. So for example, when you like receive a credit score, it's then going to say, okay, you now need to put that in this Dropbox and you know, email this person and this person and this person. I think it's called Zapier. Actually that's the name of the app.

And so this like love Zapier.

There you go. So like I'm not the most technology, like cutting edge on technology but like I'm definitely going to start looking into that because if you can map your workflows once, then you kind of go through and you're just saving so much time. And, you know, the other thing is, like, now that we have all these tools and these apps that do individual tasks for us, the real challenge is how do you get them talking to each other and you end up then being the interface between all these apps that if there was just a way to like mastermind the apps, then you could really automate everything. So.

All right. Fantastic. Fantastic. Scott, Todd, any. Any final question before we go to our tip of the week?

I don't think so, Mark. I think this is good. And zapier. Man, who doesn't love that website? I know once Terry gets to do it, she's going to be like, this is nutty. Why haven't I been doing this all the time?

Couldn't I streamline the whole maintenance headache process? Just giving my tenant, you know, say, look, I've got a home warranty here. Here's the number of the company. When they come out, you just pay 50 bucks and they'll come and fix it. Like, don't bother me with it. It's on you.

I mean, if you have like a real. I don't know what kind of, what kind of guarantees, like, you know, let's say new constructions here in Quebec, when you purchase something like a new property, I think there's either like a 5 or a 10 year guarantee on stuff. So for sure, like, if you can, whatever. I feel like whenever you can empower tenants to like handle anything themselves, you should do it and they're actually going to be happy about that. Like, we do that actually with some of the units that we manage in condo properties. So if I can put the tenant directly in contact with the person who's in the condo association, who's taking care of maintenance, as long as they're not like incurring expenses to my client as they want to, by all means, I try to empower them as much as possible. And then like the manager or the owner, you cease being the bottleneck for the solution and their frustration gets directed at the person who deserves the frustration. So be it the Internet provider or the guy who didn't cut the lawn or whatever it is, if they can directly communicate their frustration to them, that's frustration that's not falling on you. So by all means, yeah, delegate.

All right, great. Well, I feel a lot calmer about the idea of landlording. What about you, Scott?

I'm ready to try it. Not really, but I'll give it a try.

Not really? No, no. Yeah, I mean, I think you've got to Have a certain personality. Like, I just lit some incense, and I've got some. Some. Some tantric music playing in the background. I still feel very anxious about the idea of a tenant.

Hey, Mark. I mean, I mean, I guess. I mean, like, I know that we. We put a lot of strain on it and a lot of drain. Drain and strain. You know, like stress strains, all this other stuff. Because there are people that do it. There are people that hate it, but there are people that have it figured out, too. Right? Like, you know, like what you just said with the home warranty. That's like. That's a great little hack there. Listen, there's a home warranty. You know, you're responsible for any deductibles that take place because it's on your watch. Now, if they know that going in, well, then that's the way that it is, and they've agreed to that, and so be it. You know, I think if you try to change it downstream, whatever. I know that there's people that have run rental homes where they're like, listen, I never, ever, ever have to deal with my tenant at all, because I use a realtor to do it, and the realtor collects everything, and the realtor handles all the maintenance and all the other stuff. Great. I mean, I'm sure that's a great way of doing it. Obviously, there's a cost component associated with that. I think, like 10%. Okay. So, you know, if. If. If that's a concern of yours, I know there's ways to shortcut it. I do like that little niche out there where you can have kind of the same thing, but never any tenants or toilets or termites. Man, if there's some way you could just, I don't know, sell land, vacant land, that'd be great.

Yeah. But thank goodness there are people like Terri Schauer that love it, teach it, and, you know, because raw land is not for everybody. And I think this is really a valuable resource for a lot of people. So good on you, Terry.

Great.

But we are at that point now where we are at our tip of the week. A website, a resource, a book, something else, actionable, where the art of passive income listeners can go improve their businesses, improve their lives. What have you got?

Okay, so I would say for my tip of the week, a little bit of something is better than a lot of nothing. So if you're ever sitting there and thinking, you know, I don't have time to run 5k or I don't have time to learn this piece of real estate, Knowledge, I don't have time to read this book. Do whatever you can. And if those little five minute things that you do will add up and they will put you further ahead over a long period of time than if you do nothing. So that for sure.

And you're preaching in a choir here.

Yeah. And there's actually my favorite book on this topic is called Incremental Change. And that I think is encapsulates really this idea very nicely that if you work at something consistently like let's say you eat 100 calories less a day, you're not even going to necessarily feel that pinch, but the pounds are going to add up over time. And if you make the mistake of doing the opposite choice and eat an extra 100 calories a day, you're going to see the negative effects of that as well. And I think that applies for sure to investing or to any kind of like, you know, financial or learning endeavor in the same way.

Fantastic. Yeah. One of my newest favorite books is Atomic Habits by James Clear. It's kind of a similar idea that just this 1% incremental improvement, your habits will make such a huge difference in the long term. Scott Todd, what's your tip of the week?

Well, just to build on that, just one last thought on that piece is that I actually had a boss once who told me I never have to like be a rock star. I just have to be 1% better than anybody that I'm going against. So just 1% better wins the race. That's all it is.

Right.

But mark my tip of the week for you. It's for you, it's for other people too. But I'm sure that you'll love this is. What if there was an equation that was like a miracle made all of your decision makings and goals possible? Like, wouldn't that be cool if there was an equation?

Yes.

So check out this book. You'll love this. The Miracle Equation by Hal Elrod. Yes. You know the guy. You love the guy, Mark.

I do love the guy.

I have a new book that you can go buy right now and start with your miracle equation.

Oh.

The two decisions that move your biggest goals from possible to probable to inevitable. I love it. Holy. There's so many good books out there right now, aren't there?

Yeah. Yeah. It's a struggle to find the time to read as much as we could be.

Yeah, it really is. Wow. All right. Done and done. Well, my tip of the week. Learn more about Terri Shower and the Mindful Landlord at of course, terryshower.com nobody can spell it, so don't worry about it. I'm have a link to it in the show notes and you just click on the link and go to her site. Also, I just want to remind everybody, today's podcast is sponsored by flight school. Learn more. Just go to landgeek.com training start executing with the Land geek Sherpa himself, Scott Todd. Real time in Flight School Live. Get her done in three days. Where you start mailing, you start marketing, you might even sell a property in three days. Learn more thelandgeek.com Training Also, if you're getting value from this podcast, help us out. Send it to a friend, email to a friend, throw it out there on social media. I'm loving this podcast. I'm learning so much. Also, the three things you can really do to help us is simply subscribe, rate and review the podcast. Send us a screenshot of that review. To support thelandgeek.com we're going to send you for free the $97 passive income launch kit. Terry Schauer, are we good?

Yes. Thank you.

Thank you. Scott Todd, are we good?

We're good, Mark.

All right, you ready to do this?

1, 2, 3, let freedom ring.

Thanks, everybody. Terry's like, man, these guys are geeky.

We said that we would alternate, but we didn't say who was going to go first.

So that is true. That is true. All right, thanks, everybody.

Thank you.