The BEST Ways to Protect Your Rental Property & Keep Tenants Safe

this is real estate rookie episode 397 tenants can often times be the issue but sometimes tenant safety can be the issue as we will uncover in today's show my name is Ashley care Welcome to the Real Estate rookie podcast where three times a week we give you the motivation inspiration and stories you need to hear to get started in real estate investing wait until you hear how many emails were sent to this tenant and when does a tenant burden become your burden as the landlord if you have a story that you want to share that's about a tenant a deal gone wrong a contractor anything real estate related submit your Horror Story for a chance to talk with me for a oneone therapy session at biggerpockets.com slrep Eileen welcome to the show we are excited and anxious to get into your Horror Story But first I want to talk about what you're doing with Bigger Pockets thanks for having me um so I am the property manager business consultant for Bigger Pockets um essentially helping connect our investors to investor Savvy property managers and we're doing that all across the country and we're getting ready to launch that up this spring so you've probably had a lot of interaction with property managers by now yeah yeah quite a few and what would you say is you know one or two uh value ads as to finding a property manager through Bigger Pockets Ah that's a good question um you know learning landlord best practices if I didn't go you know I did my due diligence but if I didn't go with my property manager I know having a data analytics background the research that I do I still wouldn't have been able to find some of these state laws that um they've been able to share with me and just the little Nu es of best practices for uh being a landlord well I have to say that's very convenient having somebody else do your due diligence on a property manager I could have used that about three and a half years ago so I'm glad that's a a resource available now so Eileen tell me a little bit about your portfolio because I understand you have done a couple deals before you actually got into your Horror Story So set the tone for us uh what were you doing before Bigger Pockets and before this Horror Story yeah absolutely so um first property came in 2017 and at that time we were in Jacksonville Florida um we were able to buy a home at 185 and we put in about 20 to 25 Grand in Renault and sold that property for 325 in late 2021 wow yeah that that was the time to sell in Jacksonville we used the VA home loan and actually with that property we were house hacking and I had never even heard of house hacking when we were doing it so I didn't even know that we were doing house hacking but during the pandemic uh you know before we sold the property I was doing like many other people was researching you know how can you build wealth over time and that's kind of when I you know stumbled upon you know investing in real estate so I convinced my husband after he came home from deployment to sell that property in 2021 and we wanted to be more in between both families I'm from up North he was from Florida we both really like the seasons and I've been doing quite a bit of research in the western North Carolina area um and I said this would be a great place to invest so that brought us to Asheville North Carolina and we used the VA home loan again after selling that one in Jacksonville to buy one in just outside of Asheville and then we also use those profits to buy a a an investment property in Lake junaluska North Carolina which is kind of by Wayville Great Smoky Mountains area and then about a year later we used the entitlement for the VA H laand that you get and we moved again so lots of moving and he went back active duty in late 2023 so we moved again and bought our fourth property here in Pensacola Florida is where we're currently at okay real quick for first of all can you just describe some of the benefits of the VA loan real quick there's so many benefits um a 0% down you get to use you can reuse the vi home loan over and over again the entitlement that you get so for example we had 700,000 that we could use from the VA home loan we used a portion of that for one primary residence we move to be closer to a job and we use the remainder of that to buy another primary residence and you don't have to put the zero down so you can really start to like slowly build a portfolio using the VA home loan so that entitlement that you're referring to that's up to a a certain amount that's like your max that you can use the VA loan right exactly okay so any of these properties that you mentioned are any of these actual Horror Story yes okay so um when we move to Asheville now this property is just outside of as asille we're about 8 minutes away from the river Arts District 10 minutes from downtown in the builtmore if you know the area so we really liked it and we were just outside of that Asheville uh city limit so good tax break there so we got it at in 2021 so it was of course one of those 2.75 uh interest rates your typical craftsman style new build home but it was great because it was really convenient to everything and we had a private drive going down to our little CU a sack of these five new Built Homes so when we purchased that we were the first ones and slowly people started moving in and making their space their home everybody was upgrading their backyards so we lived in that property for about 15 months and we met that criteria where you were now able to rent it out if you wanted to so we decided to do a long-term rental there fast forward to August of 23 and we found a great tenant single woman she was in her late 40s she was pretty high up in an IT company she's very smart it was a perfect match for us she came in and as she drove into our CU of sack she saw the deer out in the front yard and she said it looked like a Disney movie which it really does um and so you know she got along great with our neighbors which is great because we were we're still very close with them as well so everybody is making their home their their house their home and my neighbors in the middle um this is worth noting my neighbors in the middle of the cue saac put in about $50,000 into backyard Renovations and this is an area where um when it was complete they had a fire pit and everybody would kind of like gather and you know have a glass of wine or something now there's a Street behind us that was about a half acre away and you couldn't see this gentleman's door and we'll call this gentleman Bob um you couldn't see Bob's front door from our yard but you could from my neighbor's yard so my tenant is getting along great she's you know mixing doing happy hour with the neighbors down at the fire pit and um Bob starts joining in on them and you know when we were there and living there we always just thought Bob was kind of a goofy guy um didn't really think any anything of it but he he's in his late 60s early 70s and he I guess developed a crush on my tenant um and my tenant was very you know kind about it she said you know I guess he asked her out on a date and she was said thank you but no thank you she was like you know I think you might have gotten the wrong impression and uh this didn't go over very well so what happens is my tenant goes away on a business trip and she had to get a rental car for this business trip and as she's getting in her car one day she hooks up her phone and she gets a notification and I'm not it Savvy she is very smart and she knew immediately from this notification she said this doesn't look great I think I'm being tracked um someone's tracking me so I guess this had happened a couple she returned back to Asheville from her business trip and then it happened a couple more times and she found out she was able to trace it back to Bob so Bob had been tracking her location so from her phone he was tracking her how does this happen so mind you my husband and I don't know that any of this is going on we have no idea when we do hear about the story our tenant tells us I think it happened when I met him down at the fire pit um and he said hey hand me your phone feel free to text and reach out to me if you need something around the house you don't have to bother Steve my husband to come by and in that interaction she handed him her phone and he did something to where he was able to connect into her location and had access to her internet oh I know this wild um so from there he started you know he was really upset that she denied his you know invitation to go steady I guess I don't know and he started sending really explicit emails like pornographic emails and it got to be to a point where he was starting to harass her 50 hundreds of emails he had gotten into her internet he had hacked into her phone he somehow got into her work email and was starting to send them through her work email and she worked remotely and again single woman by herself she finally confronts him about it and says I know it's you I need you to stop like please leave me alone this really got him upset and it got her upset because it went from hundreds of emails to thousands of emails a day that he was sending her these images and one day she got really upset and I don't recommend doing this but she changed the domain name on her internet to Fu Bob and when I found out about it I was like why did you do this oh so like her when you would go and sign up for her Wi-Fi login that was what you see if anyone was looking at Wi-Fi oh my gosh yeah so it got worse and finally you know this all started happening I guess back in November of 2023 so not too long after she moved in she got really close with the neighbors and all this started happening and we were texting each other you know Happy Thanksgiving Merry Christmas we had no idea this was going on she finally gives me a call or my husband a call and I talk to my neighbor because I was like I got a weird voicemail from our tenant what's going on with Bob and so my husband's talking to our tenant and I'm talking to our neighbor my neighbor decides to call me as well because apparently Bob is tracking their phones and it's gotten and these poor our poor neighbors they're a a retired couple again and they put all this money into their backyard and now she's afraid to go outside because Bob will be out on his front porch and he's just staring at my tenant and at the neighbors and it's jeez it's making it a very uncomfortable scene so as I'm listening to this on the phone down in Florida I'm thinking I just saw this episode on Dat line so you know how can what do we need to do and I guess at that point in time where do you feel like it was your responsibility not only morally and ethically like I want to be a good person I want to help this person but at any time did you think of what were you thinking of as the landlord like I need to what is your responsibility as the landlord in that situation were you thinking right you're wearing both hats you're a landlord and and you're a human um and the landlord hat kind of went off and I was like okay yeah do we need to call the cops um do let's get cameras out there and and I kind of I guess I would say didn't really go out of the Hat because that's what I just would have done anyways as a landlord I just wanted to make sure she was safe I was going based off of her judgment and off of my neighbors you know you know I I don't want this to escalate to anything to where you you could be harmed um so she didn't want the authorities involved so we did not have them involved but I said let me let's get my handyman out there um he came out that day and and hooked up and installed some security cameras for her and we also offered hey what about some ADT security system installation in there you know I was willing to to do that that that wasn't an issue for me um cuz again I just want to make sure she's safe at this point you know no no you don't need to do that I guess as the landlord me making sure that like your safety is my priority was a reassurance for her and us getting our handyman out there that day getting some cameras installed she did mention hey I I got to get out of here we're totally okay let's help you get out of there so they both kind of went together I guess instead of going out the window so as in she needs to get out of there she mean she's looking for another place to move right right yeah and at that time was she in uh locked in lease how much time was left on her lease agreement at that time yeah so this was this was only a few months ago um you know we had the conversation in January early February and um she still had till August and she goes know I might be able to stay till August and I looked at Steve my husband I was like no like this doesn't sound like a very good situation so I was like you know we'll work with you on getting some get getting you out of there and relisting it and getting someone back in as much as we possibly can so in the state of North Carolina if you break a lease early the tenant is still responsible to pay out um until a new tenant comes in and she was totally understanding of that and like I said we were willing to work with her also on that yeah because of the the circumstances and that's where it does become so difficult and it can make you vulnerable as a landlord as to where that human compassion vers following what your lease agreement states right yeah it is very hard not to get emotional and you know there there's different ways that this can come into play as to far as you know a a single mom who has three kids and you know maybe her husband just left and she's saying I can't pay this month I'm sorry as to like where do you draw the line as to your compassion as to where there's somebody else who it's excuse after excuse or they don't even tell you they're not going to pay things like that and I've had more empathy for somebody who does come forward to me and let me know ahead of time this is what's going to be happening or this is the situation and this is what I think needs to happen or whatever it is giving me the heads up instead of in your circumstance this lady could have just said you know what I'm out of here I found another place I'm gone like try and come after me but this is what has happened blah blah blah I will sue you because I wasn't safe here different things so it could have been it could have been way worse instead of having a resident that you're working with and you know having that relationship built between the both of you to find the best solution having that communication so when they decided to move out your tenant how bad did it actually get as to what was kind of the last thing you know that this guy was doing he was sending about 50,000 emails a day does he have like three virtual assistants in the Philippines or something that's doing I don't know how this guy is doing this um and then pretty much giving like the stare at everybody in the cold the sack from his front porch so it's very creepy scenario very disturbing yeah oh my gosh so what ended up happening with this property has she moved out by now and moved on Yes actually just recently she moved out we're getting ready to relist it for rent and this is where property manager really came to help this was our first long-term rental so we've bought these four properties we've had a short-term rental for a couple years but this was our first longterm rental and I asked my property manager who at the time was only helping us with onboarding but now us being in Florida I was like okay I I you know we work so well together that I'm going to pass the Baton to full service for you and U but he's he was great in telling me you know all of these things like about the state laws and about you know what uh what would be best practice in this scenario and I said you ever come across this and he said Noe that that's a first one for me but um and him having you know uh rental properties of his own I was like ever heard of a tenant like this said no this is definitely a first timer for me but um but every it did end up working out so she is out she is safe we're working with our property manager to find someone who is going to be a a good like the best fit for that home probably not a single woman just so we don't have any kind of repeats of that scenario just for their safety yeah and how do you kind of navigate that with um dealing with fa housing laws and things like that kind of are you just notifying people when you're showing the house of the previous situation yeah you know if something like that were to come up because it our property again is about a half acre to like three4 of an acre away from this gentleman it's blocked you really can't see him or come in contact with him until you go to our neighbors but if someone like a a single woman were interested me and my property manager would say of course we would want to rent you but this is the situation that we've had in the past of re your safety we're going to highly recommend that that maybe keep looking in the area um and I think pretty much everybody would agree with that and my last piece on this did the cops ever come or did anything ever happen with this guy yeah so the cops couldn't you know we we did speak to the authorities about it um you know they did not come or anything um but because he wasn't trespassing um and with other laws in place you know they couldn't do anything about it but just wanted to touch base with those guys and see you know what would be next steps if that were if something were to happen so unfortunately he had so a little bit of brain damage from a past job is what my neighbor told me so not everything is clicking and my neighbor we work really well with our neighbors in communication and they're you know trying to get him help as well well it seems like they won't be having any more um parties at their house with coming over any un after this deal yeah well thank you for sharing that experience with us so eile what are some of the lessons that you have learned from this experience yes no great question so um you know we we develop a system um all of us as Real Estate Investors and business owners my husband and I we developed subsystems um and we do that for us personally with our our portfolio size we do it by property so for example our short-term rental we use um the slage door knob and home app which allows us to have up to a 100 different codes that we can send our guests checking in and out multiple master codes and we also have a notification every single time the door is open so we know who is coming in and coming out and we're able to unlock and lock anywhere with Wi-Fi so that's always a great safety feature in there to make sure our you know our guests are the ones who come are coming into the home um for long-term rentals you we did start offering you know if our guests wanted ADT service or if they would like to use our handyman to come in and help install their um cameras on the property when they move in and then my husband is actually uh going to school for it and we've also been offering our other long-term tenant hey would you like uh us to help with a personal VPN just to kind of help further protect your tenants online privacy because we all have our probably logins and passwords on our laptops or you know mobile device so keeping that extra layer of privacy there well first of all I'm pretty sure after listening to this episode no one's ever gonna hand their phone over to anyone to get their phone number ever again do that so yeah that's a another great piece of advice as to being able to protect yourself um you know all your passwords and everything uh not letting anyone hack into your email is getting you know your VPN set up or different ways to protect yourself online too not even if you're just a tenant but every everybody should right be doing that and then um too there was something I had seen um about doing using solar panels too for security that you're using yeah so for our short-term rental um we installed a ring camera has solar panel Chargers so it helps make sure our camera is always on and that we don't have to we our cleaners handymen don't have to worry about oh the batteries died they're not able to get there till next week There's that kind of like uh like uncomfortable feeling that like you know you're not sitting there looking at your phone watching the camera but just making sure who's going into the property is the person that should be going there um yeah so that's always a great feature to have if you have rain camera set up on the outside of your property I think that's also a great advice for a light too another exterior light if you don't have electric run to a pole or something my dad has um this land with a cabin he built and it's actually all solar electric but there is um this big pole he put like in the driveway or whatever and it has a solar light on it and it just illuminates the whole thing and he never has to worry about charging a battery or actually running electric to the pole to have it it's just constantly will turn on every night when it's dark and um I think there is like a remote or something for it that you can turn it off if you want to but I never actually thought about that for short-term rentals of just adding in more lighting we have an A-frame it has this long Twisted driveway and it actually would be a great idea to put a solar light at the end of the driveway as to like here it is pull in here you know for if anyone's arriving at night too okay so what about the neighbors um dealing with this situation your neighbors do you have any tips or advice or lessons you learned from that experience so another one would be you know for rookies out there know your neighbors for multiple reasons you know having a personal connection with your neighbor helps deescalate issues that could snowball um you know either whether it's with them or with the tenant or you know it just helps deescalate any kind of situation also gives a second opinion on what's going on so in this example of my Horror Story my husband was talking to our tenant but I was able to talk with our neighbor and kind of hear like okay spill the tea like what what's going on um and also it gives another like set of eyes looking at your property because you're going to take care the best care of your property not you know but your neighbors are also probably going to look out for you give us a call hey you probably want to get a tree trimer over there this one's leaning especially if you live in the wooded mountains like we did up there and then the third take way I would say you know from all of this is investing in a property manager for the onboarding and offboarding process if you're new to this or only if you've done it a couple of times like I said we've learned a lot of tricks in the trade but one of those like for example um our property manager up there have mentioned that it's better to show a vacant home versus a home that has all your stuff inside even if it's clean I you know the first time around scrubbed it it was spotless but even with stuff inside it makes the desirability of rent for someone to rent it faster when it's vacant because they can see their stuff you know another thing we learned is you know educating a tenant on again nuances about the property so hey when you turn on the dishwasher you might get a little bit of less water pressure upstairs and the upstairs shower versus them calling you so it's little things like you a property manager making sure you educate your tenant knowing your neighbors and then digitally making sure that they're safety is protected yeah the little bit there about like informing your tenants of little nuances that are in the property is such a great idea to set that expectation forward as you know most likely not every house is going to be perfect even a new build property that you're buying there's still going to be little things but if you um so we provide a tenant handbook as to here's the water shut off here's you know where the electric panel is and then also just like some common howtos that aren't actually that common as do the a an outlet won't work okay first track make sure you know the breaker didn't flip and little things like that as to go through this process first before submitting a maintenance request um and now what about like building your team in place so you do you have any advice on that as far as a lesson learned is you lived near the property and then you guys moved and you're kind of a lot more hands off so you know we have our a team established you've got your cleaner your handymen but having that B team and C team there even though it's only been a few months that we've been away it's been such a blessing that we have them there and over time I would say how do you get all of these people on your team and again we've got a spreadsheet with everybody's name number on there but going to our local uh real estate investor Association getting on Bigger Pockets forums um really networking and see who's you know the best fit for what and then we also hired a couple of these B Team Z team people um to do a couple jobs for us that we needed to have done anyway before we moved so we got a chance to like see their work and um we did got a chance to like develop that relationship with them okay and then kind of my last if you have any lessons for this would be about doing new construction or new development yeah I know it's very popular to do something like the bur strategy um but with two kids under two and working a full-time job and all the chaos that comes with life new construction just happened to be something that we found works for us um and I would say in growing areas specifically like Western North Carolina and down here in like the Pensacola Pace area using either assumable loans or um the primary resident home loan benefits or taking advantage of the Builder incentives quick example this property here in Pensacola we closed on January 29th of this year and they offered a 4.99 interest rate all appliances included um blinds installed new construction you get that one-year home warranty so a quick tip on that is any time you have a new construction home always schedule a second inspection on that 9 10 month before that home warranty ends that way you know any little you know things that great advice yeah it's a great idea one question real quick on that 4.99% interest rate is that advertised over 30 years in a fixed rate for 30 years wow yeah yeah so I mean there's a ton of benefits of and with this being you know if you choose your Market wisely and location and going back to due diligence um and research but if you choose your Market wisely you can cash flow a little bit so we will cash flow a little bit on this property that I'm at in Florida right now and you know with the hopes that it'll appreciate over time because we see the growth around us and it's tremendous so it can work out for some people it's not that like forced appreciation like the bur but um still lots of benefits with new builds yeah I mean it can be less of a headache with you know less Capital Improvements less maintenance not having to do a manager rehab project things like that definitely a whole different strategy in itself compared to to doing a burr and it doesn't mean that one is right or wrong and that's why it's so important to figure out what your why is why are you investing and what are your skill sets and what can you bring to the table and what do you want your lifestyle to be like because you know there's people like oh wholesaling can be the best way to get you started because you're just making money you can have little money invested into it but do I actually want to go and knock on people's doors no I don't you know so finding you know what your why is what you want your lifestyle to be what skill sets you bring and kind of incorporating that into helping you pick your strategy is such an advantage as to thinking oh I can maximize my return by doing this because in the long run you might actually make more mistakes and be way more miserable and part of being a real estate investor is that you get to be happy and you get to live the lifestyle that you want and sometimes it's hard to you kind of lose focus on that we were probably one of the younger couples at our real estate investment Association up there in Asheville and um but it was great how the the older generation really wanted to help us out they knew like where what we wanted to do but new build is a great way for families with very small children like I said 200 so very small families to start getting their portfolio up and going to let's talk about the Asheville Market what are some of the advantages if I decide today I'm going to invest out of state into Asheville what are some of the reasons you would say this is an advantage to invest in Asheville the population growth one is just off the charts you know we saw in covid that people were coming down to Florida now we're kind of seeing a little bit of an exit to that in some areas but the population growth in North Carolina in that area of North Carolina has just been increasing over year after year and it has been even before CO as well um there's companies coming in like Pratt and Whitney just built a 1 million square foot facility um right outside Asheville city limit so there's more company bigger companies coming there a couple other things year round activities if you like the outdoors Asheville is perfect if you like craft beer wait are you describing Denver or as yeah I know it is the Denver I always thought of it as the Denver and Portland meets the east coast and probably more affordable too probably it's gotten a little pricey but it's probably more affordable than uh Denver yeah but um you know it's you can go hiking just about year round up there pretty much any outdoor activity you can think of theid Surfing but the builtmore the Blue Ridge Parkway and if you've got short-term rental up there which the Great Smoky uh mountains which I've heard you know we've heard it on the podcast before but it's made for Hospitality so you really can't go wrong there and we are booked through the year with our short-term rental I will say that uh word to note is um Asheville buncome County uh the county that Asheville is in they are going through some short-term rental restructuring and um rest so that would be mindful to keep an eye on if that was your strategy going into that market but um the other thing I did want to mention is I love that area because you get the perfect amount of each of the four seasons without any extreme weather things it's not like snow or anything like that yeah very rare very rare does that happen and um no you know you might get the tail end of a hurricane come up or like a bad storm but nothing like extreme is happening over in that part of the country so um Insurance costs are also low there too and what about is North Carolina a landlord friendly state or tenant friendly landlord very landlord friendly states that was another reason why that we chose that area as well so crossing your tees and dotting your eyes there yeah yeah well Eileen uh thank you for that insight into the Asheville market so what is next for you guys what do you plan on doing you know this won't come to fruition for a few more years but we are working with our Network up there with a few other experienced investors and we're hoping to build some more affordable housing um the asille market has gotten pretty pricey for firsttime home buyers you definitely have to have a little bit of a higher income to you know if you're a first-time home buyer so we're looking at building um some affordable housing communities up there wow that's awesome well Eileen thank you so much for joining us and for sharing your story if you want to learn more about Eileen uh we will link her information into the show notes and this is coming soon we will be able to find you guys a property manager on biggerpockets.com Eileen has been working hard to vet and do the due diligence work for you guys on finding property managers that will fit your portfolio to manage oversee them and operate your properties for for you so make sure to check out biggerpockets.com for when this will be available so if you have a horror story or like a therapy session with me to talk about a deal gone wrong a contractor that did not show up or ran away with your money or you know maybe you have a neighbor that is harassing your tenant go to biggerpockets.com slrep and uh please fill out the information and we can get you onto the show to talk about the situ that you encountered as an investor so others can learn from your experience well e thank you so much we really appreciated having you on I'm Ashley and we'll see you guys next time on the next Real Estate rookie episode up your games nobody SE all this time ain't nothing to change [Music]

Channel: Real Estate Rookie

Views: 2,370

Keywords: rental property, rental, rental properties, rentals, real estate, real estate investing, how to invest in real estate, real estate investing for beginners, real estate portfolio, investment properties, property management, property manager, property management business, long term rentals, short term rental, landlord, real estate horror story, new construction homes, real estate tips, new investor tips, investing, invest, biggerpockets, real estate rookie, real estate rookie podcast

Id: CWCGz2Tp9C4

Length: 37min 9sec (2229 seconds)

Published: Thu Apr 25 2024