Do you have any experience as a landlord or property manager, or are you aware of someone's personal experience as a landlord? Are there any notable experiences you can share from purchase to finding tenants and the daily operations of renting out property/ies?
Are the problems that come with maintenance of rental property, problem tenants worth being a landlord? Are there any laws that can help smooth things out?
What are your best practices in property maintenance and looking for tenants? Is there an association of landlords, lobbying for the landlord and tenants' rights and transparency in the local/national government?
What are the safety nets or advice you can give to prevent the pitfalls/headaches of renting out properties?
My main sideline to feather my secret accounts is property flipping and leasing.
As a landlord, here are my main operating points:
1. I do not acquire rental property that will rent out for less than 70thou per month.
Sa experience ng Lola namin who owned different blocks of apartments renting to low-income to higher middle class -- the low rentals yielded the least profit but gave her the biggest aggravation. So yan natutunan ko, no judgment.
I also do not buy rental property that is not within a well managed and secured village/townhouse compound/condo. A well managed association is a partner in monitoring that your tenant is following your rules as to use, no.of people residing. It also prevents mga sudden departures of their furniture, etc.
2. I have a trusted broker on board every lease contract Zi enter into.
She deals with inquiries, has Serious potential renters fill up my background check forms, & does initial background checks. She also insists on my requirement for a minimum 2 or 3 year lease contract, and gets the renter and me on the same page.
She also gives me good feedback and advice as to what current high-end renters are looking for. So her info is 1 of my major inputs to which properties to unload and/or buy and improve.
3. I really do thorough background checks on the potential renter. Check with his banks, references, company, the Bu of Immigration if a foreigner, previous landlords, and the Credit Bureau (bounced checks, Estafa cases)
4. My business is incorporated. Even if you can't do that at the start -- be sure you can issue receipts.
A lot of renters now are so matapang if a lessor issues no receipts. May mga will strip your house/condo over not paying utilities and rent for months , and even destroy your house -- kasi the BIR is another big problem if sumbong ka nila -- so that's their threat if you go after them.
5. Have a comprehensive contract drawn up by a competent lawyer.
I myself check the contract prior to signing to be sure no word or segment is altered or left out by my secretary.
Once signed, be sure to have the contract notarized
6. I incorporate as attachments to the contract, any photos of the garden, exterior and interior as well as equipment & furniture that may go with the house/townhouse/condo. These are signed by me and the renter too, dated -- each and every photo.
Parang on turn-over, wala nang argument kung may sira, more than wear and tear, or missing/lost.
Mahirap kasi interpret what is ok or not if no photos. Eh madali if may photos upon turn-over and the contract says: return & turn-over to Lessor in the condition turned-over, less normal wear & tear.
You can even have the tenant pay for a neglected garden. Mahal din plants and landscaping ha!
7. I am strict about security and rent deposits. In addition, rent is paid in advance. Mahigpit din ako with rent payments. I require PDCs. My accountant in charge of depositing the checks does so within the first 3 days of the month. So, within the first 3 days -- she pretends to be out of the office to avoid taking any calls for requests to delay deposit. PAg bounce, deposit agad. My lawyer writes after the 2nd bounce & gives 7 days to give cash payment or else we will have the house/townhouse/condo padlocked and hindi sila puedeng pumasok sa premises.
8. As a landlord, you must also be vigilant in the preservation of your property.
My accountant chcks every 15th if the monthly dues and utilities are updated.
She goes to check once a month with a male assistant of mine on the rented properties to see if anything contradicts our contract, or any repairs to the house must be done
We have quarterly pest control.
If there is a swimming pool, we provide the person who services it 3x a week, including chemicals -- chargeable to the tenant.
9. An impt part of my contract is the 2month transition to turn over period.
My contract minimum is 2 years, thereafter - renewable on an annual basis.
If a lease will not be renewed -- inform me at least 2 months before contract end.
My contract provides that I can already show to prospective tenants, and undertake repairs during this period.
It also states that the last 7 days -- the property must be free of all furniture and equipment and the tenant/his staff focuses on cleaning parang 2 days before turn over - spic and span as we turned it over at the start (except normal wear and tear).
We again photograph whatever violates our contract upon turnover para Walang confusion on the amount of the security deposit to be returned by me.
10. There have been instances I decide to keep a property vacant, until I get a good tenant.
IMO, better zero income and expenses quesa greater probable expenses and aggravation later on with a lousy tenant.
11. If you cannot manage or oversee your rental property -- do not go into this business. Ma baboy lang your asset. Sure, I have an accountant, a maintenance crew on call, and a male go-fer checking up for me. I have systems in place. BUT I check on these people. I require those checking for me to give me monthly videos/photos. I do monthly accounting checks; and at least every 3 months -- do an ocular inspection myself.
12. Be systematic and conscientious with even just 1 rental property. That can easily grow to many more if you can handle it well.
13. My personal rule: I don't borrow money for properties I buy and/or rent out. But that's just my preferred strategy for maximizing my opportunities and investment returns.
Others may have other strategies -- good for them; there are many ways to skin a cat ika nga.
Good luck. Kaya yan basta matiaga, ma pasensya and trust your common sense (hwag pa bobola sa nice words ng wannabe-renter).
