12 Apr Ep. 53 Deciding Whether to Rent or Sell Your Current Home

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In this episode, Realtor Adam Kruse, Realtor Shannon St. Pierre, and listener Henok Tekle discuss all the factors to consider when deciding whether to sell your home or turn it into a rental. Find out what to do if bad neighbors are turning off potential buyers.

Email questions to PODCAST@HermannLondon.com

WHAT’S INSIDE

0:45 Adam introduces Shannon St. Pierre

0:51 Adam introduces Henok Tekle, long time listener of the podcast.

1:45 How to decide to sell a home or rent it. Will it cashflow? Will it at least pay off the mortgage? Will the property appreciate?

6:20 What is the goal when buying investment property?

7:45 Can buying a building pay for a college education?

9:45 Is it possible to buy another home without selling the current home? Do you have enough down payment to not pay mortgage insurance?

12:08 What are general expenses to consider when buying a home? Mortgage payment, insurance cost, repairs, maintenance taxes, HOA fees, property management fees, vacancies, commission, advertising.

13:44 Should you always keep adding to the emergency maintenance reserve fund for a rental property?

15:44 What is a typical fee for an agent to rent out a property? What if a tenant stops paying before the lease is up? What is a renter guarantee? What is a lease breaking fee?

18:08 Are you okay with being a landlord? Are you emotionally attached to the home you used to live in?

21:20 Will the market go up or down? Should you cash out now?

24:00 Can you keep the current house and take out a HELOC to buy another property?

25:33 What makes a good renter? Credit score, criminal history, work history, employment verification, contact previous landlords, and bankruptcies? What are protected classes?

29:50 How do you deal with bad neighbors when trying to sell a home?

41:25 How do you deal with all the leads that come with listing a property for rent? How does scheduling an open house save a lot of time when trying to rent out a property? What’s the best way to handle multiple rental applications, especially when it will cost the applicant money to apply?

 

 

TRANSCRIPTION

Live from the rooftop of the Hermann London real estate group in beautiful downtown Maplewood it’s the St. Louis Realtor podcast with your host Adam Kruse welcome welcome everybody to the St. Louis Realtor podcast live from the rooftop of the Hermann London real estate group in beautiful downtown Maplewood Missouri I’m your host Adam Kruse broker owner of the Hermann London real estate group here with me of course is my co-host Shannon St. Pierre know what we’re excited today because we have a very special guest every every podcast we always ask people to email and their questions and this longtime listener was willing to even come in and ask a bunch of questions I want to introduce to everyone my friend head oak tech Leigh hey thanks for being here today sir thanks for having me absolutely so you started out by asking you emailed in two specific questions and if it’s okay with you we’ll kind of share those questions answer them one by one keep asking questions the whole time we’d love to hear your commentary and I know you’ve made some more questions while you’re sitting there so ready to get started yeah okay so head oak if I can give you can I give the people a little background on you yeah all right so you are a home owner you are investment property owner as well and you’re thinking of kind of doing what we would call moving up yes right and so the first question that you wrote is how to decide if you want to rent your home or sell it and what to consider yes because the home that you and your wife live in you’re saying should we rent it should we sell it I don’t know right yeah it’s like you said it’s just a little small right now and only property is and our goals that we want to have have a couple more properties and why not keep it because it’s in a really good school district so those are the things that we kind of considered but I’m sure there’s a lot of things that not thinking about that you guys could help us out with sure I think there’s a lot of things that come into consideration you know like I’m curious why you would even consider keeping it and renting it it sounds like you’re saying hey I want to own rental properties right and so we’re gonna kind of jump around here and answer this question I think sort of willy-nilly I think let’s focus on this question first yeah so with this one I guess if you rent it do you know the average rent for that area and if so do you know that you would actually make money because otherwise what’s the purpose of keeping it yeah so what we did was we tried to look on Zillow to see what other properties were kind of renting for and actually my wife the number that she had was significantly higher and I was like there’s no way we’re gonna be able to get it that’s how we started the research on it and I think we would break even or maybe make a hundred dollars on it but it’s mainly paying down that equity because we have a shorter mortgage on that and the way I look at it is if it’s paid off in 15 years let’s say we have a kid the income that we would have from that it would help to be able to pay for the college expense for our kid because of the income that would be coming in it’s more of a long play down the long game okay like you have the the reason for why you want to rent it which is probably one of the biggest things for consideration is what’s your main goal so your goal is not cash flow your goal is to have somebody pay down this mortgage and in how old’s your daughter 15 years or so like actors not existent yet okay so even better right so we even have more time so your future child comes along and so there are a lot of investors and I know several that have done this where they buy a building when a child technically is born a building meaning a home or whatever and put it on a 15-year mortgage rent it out for it to be paid for month or you know rent it out for it at least covered those costs it doesn’t necessarily cashflow maybe $50 100 maybe and at the end of the day you’ll notice that that 50 or $100 actually is not there because you’re going to be doing other repairs you’re gonna be paying someone to for maintenance and so on and so forth but so I do know a lot of investors who buy a property and then have put it on a 15 year mortgage buy it down and then and fit when the child goes off to college they refi it take out that whole lump sum so what one hundred hundred and fifty thousand maybe two hundred thousand dollars and then that’s what they use to pay for the college education and again continue to rent it out so it’s that new mortgage is now being paid again by that that renter let me ask you if you’re gonna do that I mean you said so your goal is not necessarily cash flow but I think his goal is cash flow you’re just saying maybe you don’t need the cash flow right now but if you were gonna be talking in terms of cash flow in investment properties cash flow somewhat implies a monthly yeah but he’s not trying to cash flow or anything he’s just trying to you know I mean if you could make money every month oh so he’s saying I want this to be my college plan for my kid instead of saving for the three whatever the college savings plan is that the state has this is a better way to maybe approach college savings okay I guess my question is if he note came in here today and said hi Adam I’d like to buy a rental property right okay great would we sell him this house that he’s currently thinking of keeping us available maybe I when someone comes in says I wanted to buy investment property the number one thing I ask one of the first things is what what’s your goal no no no is it is it buy a building that hopefully appreciates which I’m assuming maybe the house does because you said it’s an area that’s a desirable school district so now we’re still assuming you know that it will appreciate and he did and as usually as a college plan for cash flow now so and so when people come in they either say cash flow or appreciation well then went in your example that you gave why would the why would the investor take out a loan to pay for the college couldn’t they sort of like use the monthly $1500 or whatever that comes in to kind of pay for college that’s where I was well I guess you can if you have an installment plan normally you have to plunk down quite a bit like your first you know your tuition payments usually come in in a big chunk so I guess it depends on when the house is paid off so if the house is paid off prior to the the child going off to college you’re going to put those that those mental payments after the house has paid off in a new account and it would hopefully build up but normally what investors do is buy a building when a child is born not necessarily he’s already thinking just way ahead he’s like one or two steps ahead of what most investors do that’s such an interesting perspective that you’re sharing with me Shannon because I’ve never thought about I want to buy an investment property and just not make any money for 15 years well and because normally what we do is when we buy investment properties without a 30-year or buy it outright you know what I mean like you’re saying we are making money every month because they’re paying down our loan for us yes but my goal right now I’m like I want passive income I want to make that extra money so your goal is different your goal you came in said I want to pay for my college education and so that’s my goal as well as buy a building to pay for both mulana and maddux college education because I’ve tried the college savings plan and it doesn’t appreciate as fast as a building does but ideally he would also in the meantime before college he’d be getting you know couple hundred extra dollars if possible to help pay for his current home and his current dinners out with his wife or whatever you know if possible and I don’t and I’m guests so the question that someone should should consider is is the home that you currently own probably have a mortgage on is it a good deal is it a good investment I mean would it be a good investment property right so then it would it be if he walked in here today and said is this a house to buy for an investment I mean like then we’d have to have a holes set of questions and my attitude is that you would I would say no oh you’re gonna maybe make $50.00 a month probably not the best one to buy your attitude is someone might be like well it’s it’s like a sure thing because it’s gonna be it’s gonna appreciate it’s gonna be in a good area it’s never gonna be worth less I’m always gonna have renters yeah now that’s all true and good however then the next set of questions is but do you need this house to sell or do you do have other another form of down payment and can you qualify for additional mortgages you know even though you you will rent this out and they will there’s a formulation that they’ll use so you’re saying the next your next thing to consider is do you have to sell it to take your equity out to use it as a down payment on the next house yeah it’s really truly because you also said one of his goals is to upsize or you said that yep so in the part of the consideration for keeping or selling this house is because his next step is upsizing so typically when you up size part of buying a first-time home or a home is is you building that equity in that and that appreciation together to be able to up sighs so your home – yes and that’s how you up size typically in a normal scenario if that’s not the case for you necessarily like you could keep this and you have another form of a down payment then and then you have to take that into consideration because do you have a 20% down payment or will you be paying mortgage insurance every month and is that and then is that now worth I mean depending on the price point of a home you that you purchased that mortgage insurance can be set a couple hundred dollars a month I guess in theory someone could keep their current home if they have a bunch of equity they could take out a home equity loan you know check with your lender about this but take out a home equity loan and use that as a down payment on the next home but then they really need to get that 20 – that 20% really so they’re not paying that mortgage insurance there you go and so then they need to consider their payment on that home equity loan though and do what they would they consider that as an expense towards the new rental prop yes or would they consider that as an expense towards their new house and in their mind well it’s gonna all end up being the same because it’s in it is the same but if we go this rental properties a money loser now with this extra payment in it no they just say that is your debt I’m saying like when we’re sitting here evaluating it on our own spreadsheets not the lender I I think I would put the I would put the payment for that home equity line towards the new the upsized house in my mind not towards the rental property because if you put it up if you start charging it to the rental property then the rental property is really gonna make less cashflow now it’s negative yeah now you’re losing money every month but you wouldn’t have done it if it wasn’t for a needing to down payment um so do you mind if I kind of go through some of the general expenses that you’re gonna have when you rent a home sure what to consider yeah so when someone’s I guess when you’re doing your spreadsheet you know you should consider the your current mortgage payment obviously your insurance costs which for a lot of people is considered in their mortgage payment repairs I expect when I’m doing this I anticipate 10% of whatever the monthly rent is to go towards what I call maintenance so repairs and maintenance taxes again a lot of the taxes a lot of people their taxes are included in their mortgage payment HOA fees if it’s in a subdivision or in a condo management fees if you’re gonna use a property manager you know I when I’m evaluating a property I like to put management fees on to my spreadsheet even though I might just manage the property myself I like the property to be profitable even if I wanted to hire a manager does that make sense yes okay and we’ve talked about this just in case you end up moving out of town or job transfer yeah you might end up having a higher management company vacancies so I also like to I personally like to put in 10% kind of a withhold or whatever for vacancy in case it it’s empty for a month or so while the when the tenant moves out and get looking for the next tenant Commission if you’re going to pay a real estate agent mission to find a tenant for the property and well this says advertising so if you’re gonna rent your property by yourself and like do some your own advertising so can I ask you a question yeah one of the things you mentioned was I think 10% of the rent going towards a emergency fund of maintenance fund that you said did you get to a certain point where let’s say you have one property because I have one property and what I did was I did that maintenance fee until I got to a certain amount that could whatever could possibly happen I could just cover it with that amount do you still consider like do you just keep putting into that well yeah I mean so for me I’m a little bit crazy I like to keep about five grand per rental property per unit of each rental property and what I call a maintenance reserve so I actually have the management company hold that five grand right and do I keep growing that bigger than five grand no I don’t but I think what I’m finding and what the kind of the equation is expecting is that every year I’m probably going to be spending at least 10% of that you know the I just had a water heater break on one of my properties you know okay I got to send out someone and spend probably a few hundred if not $800 on a new water heater or something like that you know that kind of stuff is just gonna come up and so even if it hasn’t come up for you every year all of a sudden one year me you might need a big thing like a new furnace or a new roof or something like that and and you’ll probably end up maybe using two years if you hadn’t if you had a good year where you had very low expenses you like to have a big cushion so typically when we sit around and work out numbers for rental properties he’ll take 30% off the top just like that yeah that’s management maintenance and vacancy where typically it’s 5% for vacancies what most people take most well that’s the average so they might do that but I mean think if you think about it I hire a Realtor to to list my home for lease in most cases and then and I’m generally paying out one month’s rent yes right so 1/12 is 8.3 percent already I think general check my math but I think that’s like eight point 3% so then if it’s if it takes them more than a month or a month and you know 2 weeks or whatever I’m at my 10% yeah okay you know so I I don’t know I think 10% is pretty reasonable so what do you what is a typical fee for a agent to go run to my house out and is there any guarantee that you know you sign a lease for six months or not six months I’m sorry usually a year if they leave early is there something that you you know work out with your agent that they go find somebody at a lower cost so I think I have to be kind of kannst careful about how we answer this because we’re on the air or whatever I don’t want to set Commission standards or whatever like that but I would say that roughly it’s in general gonna be somewhere around one month’s rent to find a tenant and what I’ve seen is the listing agent keeps the lion’s share of that and then the agent that’s representing the tenant is gonna is gonna keep a lot less of that okay and so but it’s still one month around one month’s rent charge to you the property owner can you find an agent who will do it for more or less probably sure and then in terms of the like what if the tenant stops paying after six months or something like that there’s lots of different types of things you can put into your lease to try to protect yourself there some I’ve heard of companies having like renter guarantee or something like that where they will re rent it for you for free if the tenant doesn’t stay for a certain amount of time one of the things that I’ve seen people do that that we like to do is have like a two month equivalent to two months lease breaking fee so if our tenant emails us and says you know just broke up with my boyfriend whatever I need to move out I want to break the lease we have in there a set fee and and I argued that to the death for a long time but what we found is that people are more likely to pay that fee knowing what it is then before then when we didn’t have it and they just didn’t know what was gonna happen they would sort of ghost out you know and then we trying to go after them for the rest of the lease or something like that and you know so we’re more likely to collect that fee because people know what it is all right so then some other things that someone should consider if they’re trying to decide if they want to rent their home or sell it on the renting side as kind of are they okay with being a landlord you know the reason that our company started a property management company was back and the sort of the market crash of 2000 I call it 2007-2008 that that time frame we would go to listing appointments and we would say hey we’d love to sell your house this is gonna be great you know it looks like we can sell your house for a hundred fifty thousand and they’d say well we owe a hundred and seventy thousand you know right oh yes call us when you want to lose twenty thousand dollars you know and so what we found then is we’re going wait hold on what is your payment they’re like eight hundred dollars I’m just throwing numbers out here right dang well this thing can rent for eleven hundred right and they’re okay that’s an option but what if the toilet leaks at night you know Nick gonna call me or something like that so then we’re like well we’ll manage it for you too and that’s kind of how our management company started but a lot of people are not comfortable with the idea of being a landlord you know we did have people some people in those cases that would say oh no I’d rather lose that ten thousand dollars you know and have to deal with the tenant they’d have to deal with the sort of unknown thing out there about what expenses am I going to be facing what’s gonna be happening you know what emotions am I gonna feel when I Drive past the house and they don’t take as good of care of the yard as I used to right and that’s the other thing no tenant is going to take care of your house you know it’s one thing to come in and buy an investment property and you have no real emotional attachment to it I think it’s another thing in it to lease out your personal home that you were living in that you have this emotional attachment to it because there isn’t to anyone even if they are an awesome renter and tenant that is gonna take as good a care of the home as you do you’re absolutely correct I my home that is a renter rental right now the first couple people I had a hard time when I would go in there and check it and I’ve like oh god why you know and I think I can’t I had to change that mindset of like this is not my house anymore this is a investment and I think my wife might have a harder time because this was her first house that she bought and to her it’s like why did I change the pink color you know things like that should be in the lease anyway about changing like actually like paint colors and stuff like that but then if you go in it’s never gonna be as clean it’s not gonna be dusted it’s not gonna be fine-tuned there’s gonna be Nicks and dents and that’s kind of part of that consideration of taking in that maintenance class it’s not just the heater or the a/c or the roof or but it’s fixing it back up when you want to actually go sell it totally my wife makes fun of me because when we drive we you know I used to live in these two different homes on the hill and whenever we drive past them I’m always commenting about the yard on the one and I don’t like where the new people on the other one where they keep the trash cans and she’s always like we drive by here economy so so keeping nothing to keep in consideration as the market is the market gonna go up or down in your mind you know in your crystal ball right if the markets gonna go up maybe you want to keep the property if it’s gonna go down maybe it’s a good time to sell it and like cash out what you can you know so what does your crystal ball say at the time I guess yeah I mean nobody can predict that so I don’t want to comment just because I don’t want it back us into a corner but typically I mean it homes appreciate right over time and if you bought it and if it’s in a really good position you got it for a good good enough deal and you know like even if it crashed do you you know you’re still just gonna keep paying off that mortgage anyway so cuz it sounds like it once you decide which way you go with this particular home the home you’re living in now you’re probably you’re once you head down that path that you’re at you’re going to stay on that path so you know consult a tax accountant about this one but there there are potentially a lot of tax benefits to you for owning a rental proper you know depreciation depreciating the chattel all that kind of stuff writing off your interest those types of things so if you’re the type of person who wants to save on their taxes and kind of thinks it’s worth it that’s another thing to consider if you want to rent it now selling let’s talk about about selling so if you do sell you’ll have a lot less headaches right because you won’t have tenants you’ll have to deal with you won’t have to drive past the property and do maintenance you’ll have you all get calls in the middle of night that the light bulb burnt out yeah and then you’ll have your big down payment you know so there’s obviously so you decide to move on you keep it as a intentional specific purpose of a college education type thing for your reasoning and or you just move on with your life you sell it and you move on yeah so to put you and guess it depends on what you’re willing to take on okay your next question was how to deal with junky neighbors when trying to sell your home those are your words how do you feel about like where you’re at Valley oh yeah okay sorry so you’re gonna rent yourself all you need to do some evaluating I think like I already have rental property so for me I already know what yeah and each time I rent out to different people I learned something new about like this screening process or things I should add to the contract it’s you know it’s being married now and I get somebody else that I have to take into consideration when making the decision but my wife is definitely on board with it but I was just trying to make sure that okay now this would mean I would have three houses and it’s like okay it’s different when you have one house that you is your residence and then one rental now it’s two rentals plus a you know a home that you live in yeah okay so and you would keep that house you wouldn’t sell it and take the money and buy another different rental property or two or three or four family building or something well I kind of thought about that also because it’s like we could just sell that and then use that to go buy a four family flat in a place that is you know up-and-coming or it’s already maybe but I still think you could use it still keep that house take out a home equity line of credit and still do the same thing if he’s been living there long enough and has enough equity totally yeah that’s assuming there’s equity in the house yes for sure but that’s your assuming the same thing by saying you’re gonna sell that house have your down payment and go buy other rental properties so you’re saying the exact same thing totally it just depends about it but and I’m a big proponent for using home equity lines of credit on your rental properties – yeah he said the other one that you have great so taking out a home equity line of credit and leveraging that equity to buy another property though yep and now that’s that’s a yeah that’s a different approach and it’s a little bit maybe riskier it’s it’s not for everybody yeah right so a question for you guys staying on the rental thing because these are things that I kind of learned the hard way but it’s like you know it’s always like you don’t have if you have a tenant that you’re about to rent out or you have a rental property that’s needs to be rented out how do you distinguish what you what’s important when looking for a renter because you know I do a background check yeah I look at the credit score and then it’s like what’s a good credit score to like you know like to be like okay this is so I don’t know I mean I have mine I know it’s I mean typical qualifications when people call to ask is you know a credit score of maybe around 600 ish not give me if it’s a little below that like no criminal history solid and work history and current employment a verification of the current employment has to be something they do as well as contact previous landlords and then what else no bankruptcies like there’s certain like little criteria so you French trucks yeah well now we have a company that does it yeah okay and do they give back like because I would think that if I called somebody that was they had a bad tenant and now they want to move that from that place and move into my place I would assume that landlords like oh yeah they’re great please get them on my place sure sure they might say that but I think in general it’s the questions like would you rear nth and hopefully the people are honest you know I mean get him out of my place really interesting so the company itself asks this newer this new one that we’ve gone to ask some I think interesting questions I mean they ask like would you rent to them did you have that like did they have bed bugs do they have like it’s some really interesting questions that you’re like wow okay like that’s roughly what I like to see is income that is at least three times whatever their rent is okay so if the rents a thousand dollars I’d like to see verify verifiable income of at least three thousand dollars in total between all the adults in the home okay that’s a good tip you know yeah I mean the credit score thing and in the criminal history and all that kind of stuff I mean it’s sort of I think that totally varies you know I mean depends on sort of like the type of rental property it is you’re if it’s like a like a lower income type of property then in a lot of cases that people are gonna have not as good of a credit score you know but then if you want to get deeper into that it’s like is it medical things that cause their credit problems is it evictions is it like too many credit cards like what what kind of stuff is hurting their credit I like to tell people that we like to look at the full picture because even if someone has an 800 credit score but they’re like an axe murderer then we probably wouldn’t want to accept them necessarily true you know you really have to be careful when you’re when you’re doing this because there’s all these like what they call protected classes and you and you can’t not rent to someone for all these different types of reasons you know and things that the the general good person or whatever wouldn’t consider anyway you know it’s like race religion sexual orientation gender in the city its source of income familial status there’s there’s things like that okay and so you know in general your you shouldn’t in my opinion anyway you shouldn’t be like oh I don’t like your race so I’m not gonna rent to you and there are a couple people that investors that I’ve had come just just at least out of place just because they want to take that backseat during the renting process so they can never be accused of you know any of those issues yeah so they actually just kind of step out of that process and then take over the management fronting mm-hmm all right your next question that you sent in was how to deal with junky neighbors when trying to sell your home and I thought it’d be fun if we could for a second brainstorm on all the different things that your word junkie neighbors could mean and I think when you say that I’m just from knowing you you’re talking about a person who has like all sorts of crap sitting around in their yard right it’s like do you really need so my rental property before who’s gonna sell it the people next door they had a a TV like those all off road you know vehicles yeah on the side of the house along with like a trailer wheel anything bigger than the four-wheeler yeah but yeah like a four-wheeler and then the backyard was just junky and just not well manicured your eyes okay and in the front lawn they had just like plastic chairs sitting you know their little in front of their front door and like mismatched and half broken kind of thing yeah and then you know a truck that was broken down kind of you know on blocks because they were working on it type of thing you know so some other examples that I’ve seen was like the neighbor has like literally plants growing out of their gutter like they just obviously do a really job maintaining their property they don’t do anything good with their yard we’ve seen neighbors that are just crazy rude you know so I mean I’ve been showing property for their quarters is another one yeah but I’ve been showing property before and the neighbor comes over and talks about how bad the neighborhood is or how terrible those people who lived in the house were or you know did you know that that house has settling issues or whatever because they’re trying to scare us off for some reason you know what other examples do you have they’re at problem dogs problem dogs yes so we go to a house and were like look at this lovely black yard wouldn’t you like to sit out here and barbecue on the weekends and it’s like that’s three dogs and both sides are barking okay well you can’t carry on a conversation you’re looking at it and the dogs are so loud mm-hmm that’s that’s definitely a problem there’s a lot of people that seem to like to go garage saling and they just don’t quite make the stuff all the way in the house overgrown lawn what about the super ear what is it called people that love to decorate for every holiday you got a big Easter Bunny and holiday every Christmas there’s one I just laughs he has them hanging out out his window on top of the roof every inch and now it’s even crawling into the neighbors and so I’m always like oh that’s interesting yeah we had a property where from the second-floor window you could see into the neighbor’s yard and there was like 15 or so I swear bags huge bags full of empty beer cans it doesn’t look great so the question is how do you deal with that right I think that there’s there’s situations where you can like if you want to you can offer to help like clean well I think first and foremost when you move into the home I think it is your responsibility to be neighborly and I don’t think that you have to be best friends with your neighbors but I do think it is a responsibility too at least make nice so this is so you’re saying like start from the beginning from the beginning I think you have to play fair and play nice show up with the pie yeah introduce yourself and just be neighborly and if they were obnoxious or totally not your kind and junk you know like like to go garage saleing and throw it all in the back yard whatever so it’s not your thing and what you have to remember is arts and the eye of the beholder right so they don’t have a problem with it you might find it to be an eyesore but then you have to remember that’s your problem that’s not their problem so you have to make sure that the approach on this is that you carefully approach it so and then the second thing is that you have to be a good Nate you you know you can’t cast stones when your own property is in need of a few touch-ups – so do you guys answering it from the point of perspective that I end up buying the house and then no she was just starting off with like hey when you bought this house that you’re not selling you should have been no and you’ve been rude during this whole time so now it’s gonna make it harder for you to show up with the pie and go hey how about you clean your junk off remember that bike that’s been in your front yard for six months about that goes in the garage you know or the cooler that’s in the garage I guess then it goes in to ask ya ask I think I think I’m saying when all else fails communicate right so I mean and they may not know like that that they you’re trying to sell the house and that you want you know and so you kind of have to ask first and then to offer solutions offered a home so maybe they can’t afford it or maybe you know if you go over and say can I clean up your yard can’t do a little maintenance can I trim that out I’m gonna have an open house this weekend they might be like have at it guy like I mean it’s gonna help them anyway because essentially you’re you’re raising the property value right your home pointing that out that and in your case you might go like hey guys I know you don’t like me and so good news is if you can help me here I’m gonna be moving away you know yeah so this also business justin suggested like for the hoarder or maybe for that four-wheeler i’m not sure is to offer to buy them a shed i think it’s a very interesting offer but for a few hundred bucks you could buy a shed as you could sell your house that seems extreme right but I mean I guess for a few hundred bucks and you said well I was like in the term no and from those terms it makes sense but my fear is like I buy them a shed and then they have they put it up halfway and they don’t put anything in it that is making sure it goes up so the junk cars right came up bright so that’s always a really hard one so if they’re not willing to have it towed off or move it or fix it then the last option is obviously the municipality calling the city and complaining about it a derelict vehicle just start complaining about your neighbors well unfortunately okay yeah so I mean but your HOA or the city or whatever yeah the HOA I mean the city but I you know I don’t know that they always do much about it because if it’s on private property that’s kind of the hard thing to what do you think what how would you take care of it I like I like I mean I like that idea you know my HOA has what they call what the they seem to have their own flexibility to call anything that they want to a nuisance and so if the neighborhood didn’t like the junk car for example I think they would they would probably maybe not I don’t know if they could do it with a junk car if it’s still working and it’s registered and it’s licensed all that stuff I don’t know that they could just say I don’t like your Camaro or whatever but a lot of other of the other junk and stuff they could say that it’s a nuisance and they can make you get rid of it yeah but I think when you’re in like say the city where there is no HOA or yeah you know any type of suit I think it can be a little bit harder but what about like suggestive activity like if you’re out there on a beautiful day and you’re like cleaning up your yard maybe that’ll sort of them too you know get out there and clean up their yard a little bit too or something so yeah beautification can be contagious you know so if you do some curb appeal I like that beautification can be contagious yes yes yeah then you go you know we’re just doing a neighborhood cleanup project and right over here I have extra plants do you want to plant them or do you you know do you want me to plant them I didn’t need these flowers mm-hmm I’d like to buy that broken-down bicycle from you that’s a really good idea why did I start offering to buy some of the material like some of the items in that and say hey are you are you selling that great name your price and then I’m in have it towed off to the junkyard I don’t know so I know we didn’t give you any like super solid answers there I think it seems like it’s kind of on a case-by-case basis like have you guys done any of these things when you’re trying to sell a house for somebody and you’re realizing that you’re gonna have a hard time selling this house because of privacy fences go a long way too by the way okay yeah I’m trying to think of an example I just sold the house in dog town that did not have the best-looking neighbors across the street but in this market it seems like it’s just kind of a hot market anyway and people well I think a little bit more acceptable in the city too you just get all kinds yeah different areas like the cities I have you know $500,000 house right next to a shelter or whatever yeah an LRA property there you go yeah um so what about a privacy fence would that help with at least the backyard situation yeah I think I think I looked at doing the privacy fence and I think it was just me being cost-efficient and like why would I put a fence in if I’m gonna be trying to sell this house but it makes sense because it’s that’s to me that’s better than having that awkward conversation with the neighbor that I don’t well you have that awkward conversation depending on the property lines I don’t know exactly where the house is but in the city they’re usually offenses are just kind of like there’s not usually two fences backed up to each other there’s just one fence so you could either go in and say hey do you want to go in on this privacy fence I’m adding it to my whole yard and turn to you know it’s a desirable feature and I’m getting ready to sell the house you know just try and play it off a little bit um but and see if they want to go in on their part and they say no then you just go ahead and say just do it and say do you mind if I do it you know or if it’s on a property line if it’s within your property lines and it’s catcher have you considered just not being so lame and maybe embracing this free living lifestyle like think about it man just throw your junk anywhere you want like take stuff out of your car just throw it on the ground this is you know me for a very long time that’s not gonna happen okay I think you had some other questions for us don’t you ah the things you think the listeners would like to hear when I posted my rental I had tons of people that wanted to come look at it and I kind of did it on a like base by base like okay this first person is gonna look at it if they like it great that’s the person I’m gonna go with if they meet all the criteria like that we kind of talked about before how do you handle a situation so sort of like I have kind of two answers or two directions to go with that question I guess you know there’s do you take the first person that applies if they would be acceptable and then but also how do you deal with all the leads right I just listed I bought a house in Sunset Hills recently I’ve had over a hundred and eighty leads on that property meaning over 180 of the emails of people contacting me what do i do how do i how do I do that did I literally have to go over to that house a hundred and eighty times you know so what our leasing agents do a lot is they’ll kind of schedule open houses you know and so they’ll say hey I’ll be there Thursday from 3 to 5 or Saturday from 1 to 2 or whatever and which is amazing thing to do because one of the things that happens is you you know someone to plot or someone emails you says hey I want to see this house you go great house Thursday at 3 they go awesome that’s perfect and then you call him Thursday 1 hey just wanted to confirm we’re still gonna meet Thursday at 3 and they go awesome yeah I’ll definitely be there and then you show up at the house Thursday at 3 and they never show up nice to get caught he doesn’t ever hear from them again and it seems like that’s almost like 60 to 70% of the time that’s about what happens right and so that’s where the open house has come into play where you can just save a lot of time the other thing that’s cool about the open house is now in theory there’s you know five or six or whatever different people all at the house at the same time so they get to perspective this is a popular property and it encourages them to take action sooner you know and so then what we do is we let anyone who’s interested we let them apply and then we we like to go for the best most of our I should say most qualified applicants you know and there are perspectives out there that you should do it one by one because it could be considered like discriminatory or whatever going against the the things that we mentioned earlier but we just don’t I just don’t feel that way you know if I have one person who’s got great income great credit and good criminal history or whatever but another person has better income better credit or whatever then like I’m making my decision based on that not off of anything else other than that you know I want as the landlord I want the person who’s most likely to a pay the rent be take care of the property and see in my opinion I like I want someone who’s gonna stay there a long time if possible yeah like I like the idea of the open house because that was my issue I had to and I didn’t live close yeah it was a 30 minute drive so each time I would have to go out there and show it and so then I started getting a little bit smarter like okay I would try to schedule on back-to-back you know so one person would be there from 1:00 to 1:30 and the next person get there 1:30 but that’s hearty that’s hard to do because you’re like okay it’s 1:30 good for you okay you know like so yeah we just typically take time blocks I’ll usually do anywhere from an hour to an hour and a half if it’s you know I don’t know that I’ve ever done two hours but if you have to if it’s a really hot property yeah I mean I just take my book and just like open up and that Ike here you go go ahead you know walk it out and so an answer in back let me know how to answer questions and then here’s where you apply you know so yeah I just kind of opened the door and I tell him I’m like I’ll have it for open they’ll be there from 1:00 to 3:00 last one I just did I was over there and while they’re looking around I had my broom and I’m like sweeping up the front porch and the driveway and all this stuff and I a kept me occupied because I would be bored just sitting there for an hour I like to sort of stay out of people’s way but also I wondered if that did that sort of set some sort of mentality like hey this guy is the property owner he likes to take care of his property you know like he’s probably don’t want us to do the same thing well sure I mean if it’s your property why not knock out a few tasks while you’re over there for two hours and then have that be the time block that people come and take a look at the house but so what people do is you know we have people go we go go to Hermann London calm slash rent okay and that’s where they can go and they can apply they pay their money for the application it goes to a third-party company that we use and so to us it doesn’t have I don’t want this to be misconstrued but we don’t have any cost associated with somebody applying so we would rather you know more people apply and that way we can take the most qualified applicant does that make sense yeah and you know so it kind of does depends like if I don’t know sometimes I don’t know about having multiple applicants because I’m like I should I feel bad if you know think about it up renters get really upset if they have to pay $50 every time they have to apply somewhere and then there’s many applicants see a hundred now and then 150 and you know Mike but it’s not really I don’t I just don’t see it as fair if I have an open house three people are standing in front of me going I want the house what do I do and I say go apply and one of them does it right they’re on their phone one of them drives home and does it under computer and one of them does it when they get to work the next day how is it fair that only the person who did it first gets a message if they do it written a relatively short period of time in that way like within the next within that day you get a couple I think but after that when people call but like you know we’ve gotten a few applicants totally totally absolutely so if it’s in a short amount of time then I’m like it that does happen within that open house type thing when you give him this time block there’s five people walking through the house they’re like oh there’s a rush to actually go ahead and apply versus sitting on it and humming around and I don’t want to waste people’s money either you know but again we’ve been burned so many times by people that say I’m gonna yeah now that doesn’t and they never do never hear from them again so god forbid you would tell everyone the rest of that day oh sorry we already have someone that’s gonna apply then you I mean you just said and that I’ve never done I mean until somebody actually applies I don’t call it done yeah that’s that’s what I learned last time is that I think from my previous experience I you know the person said they were going to apply and I kind of just weighed it and then a couple days later and then then they changed their mind I felt like I got burned from that so then I was at the hose extreme like everybody apply I’m gonna look at it on this day and then kind of go from there but then I felt back I think it was like 50 bucks for the and it wasn’t coming to me it was going to the third party yeah and they’re like but I paid I was like I’m sorry like I didn’t like there’s some times where they’re like what I paid to apply and like but why did you like you have you have really really bad like yeah and then I do down the qualifications thats why we give a round about qualifications and there’s a you know with the exception of you know like case-by-case basis like just because you have a you know some you have a $400 400 score you should have maybe mentioned that to me before you spent your money on the application fee you know I don’t know people do they’ll ask you know what kind of credit score and I’ll be like well 600 is yeah yeah I don’t know like maybe we’ve definitely taken lower yeah totally but at the same time yeah so knowing the qualifications that and of itself they should know whether or not they qualify well we really appreciate you being here today huh nope I love that you sent in these questions and then we’re willing to come in Shane and I have always kind of wanted a non quote-unquote real estate person to be a guest and so you’re our first one I hope the listeners are thinking wow that was must have been awesome for him okay I really want to be a guest on the show now and come in and ask a bunch of questions ask my own personal questions yeah if so just email us just like you know did podcast at Hermann London calm Hermann with two N’s by the way and just send us a message I wanted to give a quick shout out to someone named Bill Gasset because when honoka when you sent me your questions you know we knew our own answers but we wanted to make sure we had super kind of thorough answers so I did some googling and this guy had a great website that had super thorough answers to both of our questions so bill gasset as a Realtor I think in Massachusetts and we I sort of used some of his ideas from his website today awesome thank you so much for having me and answer my questions yeah well thank you for coming in yeah perfect and thanks everyone for listening and take care [Music] you