MidwestLandlord
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- Dec 6, 2016
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I'm in more rural areas, so location diversity is a big factor for me. Largest town I have rentals in is 275,000 people...smallest is 28,000
My rentals are spread between 4 towns in 3 states.
The smaller towns all have a specific industry that supports them, and did just fine during the recession. Rental demand went UP in my area during the recession.
I use 3 different property managers. Besides being spread out so there is no way I could run them myself, I just don't want to run them myself. I carefully screened the property managers through referrals from other landlords and realtors.
I don't really have any tenant horror stories. I don't buy crap properties, so I tend to not get crap tenants. The biggest problem I've had damage wise is a guy that liked to put holes in doors, instead of his wife's face, and those doors needed to be replaced. That damage was discovered by the property manager when they came by to replace an old screen door. He was military, and was concerned that the damage and eviction would be reported to his CO, so he paid to have the doors replaced, paid his rent in full, and left quietly.
As for financing, I pay cash. Later I have an appraisal done and then take a 5 year commercial loan (not a mortgage. 15 year amortized with 5 year balloon) for 70% of the property value. I have 1 unit that is seller financed though.
All of my rentals are in individual LLC's so that one lawsuit or loan default can't take down the whole operation, only that individual business. Each loan is secured by the property it finances and is not in my name, only the LLC's name.
Each property/LLC has it's own bank account with 6 months of expenses in it as emergency backup. I can survive a 6 month vacancy in each unit before I start having to throw cash at it myself. At 4 months though, if lowering the rent to my lowest doesn't work, I put the thing on the market and sell it.
Each rental is a business and is operated accordingly.
My rentals are spread between 4 towns in 3 states.
The smaller towns all have a specific industry that supports them, and did just fine during the recession. Rental demand went UP in my area during the recession.
I use 3 different property managers. Besides being spread out so there is no way I could run them myself, I just don't want to run them myself. I carefully screened the property managers through referrals from other landlords and realtors.
I don't really have any tenant horror stories. I don't buy crap properties, so I tend to not get crap tenants. The biggest problem I've had damage wise is a guy that liked to put holes in doors, instead of his wife's face, and those doors needed to be replaced. That damage was discovered by the property manager when they came by to replace an old screen door. He was military, and was concerned that the damage and eviction would be reported to his CO, so he paid to have the doors replaced, paid his rent in full, and left quietly.
As for financing, I pay cash. Later I have an appraisal done and then take a 5 year commercial loan (not a mortgage. 15 year amortized with 5 year balloon) for 70% of the property value. I have 1 unit that is seller financed though.
All of my rentals are in individual LLC's so that one lawsuit or loan default can't take down the whole operation, only that individual business. Each loan is secured by the property it finances and is not in my name, only the LLC's name.
Each property/LLC has it's own bank account with 6 months of expenses in it as emergency backup. I can survive a 6 month vacancy in each unit before I start having to throw cash at it myself. At 4 months though, if lowering the rent to my lowest doesn't work, I put the thing on the market and sell it.
Each rental is a business and is operated accordingly.