Turner Brandon - The book on managing rental properties: a proven system for finding, screening, and managing tenants with fewer headaches and maximum profits

The Book on Managing Rental Properties

Copyright 2015 by BiggerPockets Inc. All Rights Reserved.

Written by Brandon Turner and Heather Turner

Published by BiggerPockets Publishing LLC, Denver, CO

This publication is protected under the U.S. Copyright Act of 1976 and all other applicable international, federal, state, and local laws, and all rights are reserved, including resale rights: you are not allowed to reproduce, transmit, or sell this book in part or in full without the written permission of the publisher.

Limit of Liability: Please note that much of this publication is based on personal experience and anecdotal evidence. Although the author and publisher have made every reasonable attempt to achieve complete accuracy of the content in this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. Your particular circumstances may not be suited to the examples illustrated in this book; in fact, they likely will not be. You should use the information in this book at your own risk.Fin

Any trademarks, service marks, product names, and named features are assumed to be the property of their respective owners and are used only for reference. No endorsement is implied when we use one of these terms.

Finally, use your head. Nothing in this book is intended to replace common sense or legal, accounting, or professional advice and is meant only to inform.

First Edition

Acknowledgments

Thousands of hours go into the creation of any book, and only some of those hours were our own. Therefore, we want to take a moment to thank the many individuals who helped put this book into its final form.

Thank you to Allison Leung, for your many hours spent editing our rough text.

For Mindy Jensen, for your diligent research into numerous aspects of this book, including the 50 state-specific rules/laws at the end. Oophta.

For the BiggerPockets Book Launch Team who helped read this book before the launch and helped us hone in our message!

To Josh Dorkin, CEO of BiggerPockets, for your leadership in this book writing and publishing adventure and for taking a risk on us.

To the leaders in the BiggerPockets community who helped record interviews in preparation for this books launch.

And finally, thank you to the BiggerPockets community, from whos shoulders we have long stood upon. Without your stories, lessons, guidance, and advice we would not be where we are today.

And to anyone and everyone we missed...

Thank you.

Dedication

This book is dedicated to our parents, Rick & Lori and Shane & Rachel. Not only did you raise us to be financially wise, you also raised us to know that there are things far more important that money in this world. Thank you.

Table of Contents

CHAPTER 1 - SO YOU WANT TO BE A LANDLORD?

CHAPTER 2 - THE EIGHT BUSINESS ATTRIBUTES OF A SUCCESSFUL LANDLORD

CHAPTER 3 - INITIAL STEPS

CHAPTER 4 - FAIR HOUSING

CHAPTER 5 - ADVERTISING YOUR VACANCY

CHAPTER 6 - TENANT PRE-SCREENING

CHAPTER 7 - THE APPLICATION PROCESS & TENANT SCREENING

CHAPTER 8 - SIGNING THE RENTAL CONTRACT

CHAPTER 9 - MANAGING TENANTS

CHAPTER 10 - DEALING WITH PROBLEMS

CHAPTER 11 - GETTING RID OF BAD TENANTS

CHAPTER 12 - DEALING WITH CONTRACTORS

CHAPTER 13 - WHAT TO DO WHEN YOUR TENANT MOVES OUT

CHAPTER 14 - BUSINESS ORGANIZATION AND BOOKKEEPING

CHAPTER 15 - THIRTEEN PRINCIPLES FOR BEING AN INCREDIBLE LANDLORD

APPENDIX

Landlord/Tenant Resources for the 50 States

MORE FROM BIGGERPOCKET S

CHAPTER 1 - SO YOU WANT TO BE A LANDLORD?

This book was written for anyone who wants to make more money, work less, and have fun doing it.

For anyone who wants to build wealth while still maintaining a life.

For anyone who wants to travel more, freak out less, spend more time with family, for anyone who wants to maintain stability while rocketing their net worth into the stratosphere.

Thats right, effective landlording can accomplish all these goals and can do so in powerful ways. You might be a first-time landlord, just struggling to get started with your first rental house. Or perhaps you are an experienced property owner, looking to find better ways to maximize your time so you can spend quality hours with your family and friends. Or maybe you are a property manager, looking after other peoples properties for a fee and trying to improve your skills. Whatever your background is, if you want to improve your landlording skills, this book is for you.

We wrote this book for learners, people who dont have all the answers but are continually trying to improve their skills and pick up new tricks. Its for experimenters, those willing to hear new ideas and try them out in their own lives, willing to take the risk of trying something new to find a long-term solution to their problems. And its for hard workers, those who dont believe success comes overnight, who are willing to get down and dirty and not give up with the first failure.

In short, this book is for you. If you want to see the power that effective management can have on your real estate investments and on your personal life, keep reading.

The beginning years of marriage are often the most blissful. Romantic dates, chocolate giftsand real estate?

Thats our story, anyway.

I (Brandon) first met Heather in college and instantly fell in love. Thats no exaggeration: I remember seeing her across the lawn from my dorm room, and I said to myself before ever meeting her, Thats the woman Im going to marry. Less than four years later, we tied the knot in an outside ceremony in the middle of the Quinault Rainforest, two hours from Seattle. Instead of the traditional American story of getting solid jobs, moving to the suburbs, having 2.5 kids, and growing old, we decided to buck tradition and invest in real estate, foregoing law school to pick up a paint brush. After selling the home I had purchased before getting married, we bought a small fixer-upper duplex together in the small logging town of Hoquiam, Washington and immediately jumped into the world of landlording, knowing absolutely nothing about what that really meantother than it sounded like a good idea.

(On a side note, that duplex, we soon discovered, had a very unique history. After repeated complaints from our tenants about people taking photos of the property, we learned that the duplex was the very first childhood home of Nirvanas frontman Kurt Cobain, who lived in both halves of the duplex during his first two years of life. Sadly, this factoid does nothing for our business, but its a great conversation starter at parties and in landlording books!)

Over the next decade, we continued to acquire more and more rentals while continuing to manage them ourselves. We made every mistake in the book (which youll hear about in the pages to come) and learned painful lessons along the way. However, we also discovered that landlording success is NOT a mystery . In fact, managing tenants is fairly routine once we learned how to do it correctly. We built relationships with other landlords to learn everything we could from their experiences, picked more brains than any person on earth should, read every landlording book we could get ahold of, and spent hundreds of hours learning and asking questions on the BiggerPockets Real Estate Forums .

Over time, weve gotten pretty good at this landlording thing. There is rarely a problem we havent encountered before, and most of this has become second nature. Recently, one of our close friends purchased a duplex for themselves in the same manner we originally did. As they began to ask us questions and we noticed them making the same mistakes we did, we realized how new and foreign this whole landlording thing must be for them. As we tried to recommend books they should read, people they should talk to, and paths they should take, it occurred to us that no book existed that perfectly described a step-by-step process on how to be a successful landlord. There are some books with good theories, some books with good stories, and some books with good tips, but we wanted to offer our friends and fellow landlords a book that laid everything out in an easy-to-follow guide.