Now is a terrible time to sell. Unless you want to get skinned. There was a trend in this country from 1940-2000 where real estate made moderate appreciation, Then in 2000-2005, we had an unusual bubble, now we are having an unusual correction. Wait until the trendline continues before you sell unless your carrying costs will ruin you.
Before you decide that this property isn’t working, manage it up.
If your management company is unscrupulous, find another one or do it yourself. If a property manager is telling you that they had to “fix the gate” or “adjust the closet door” get all repairs in writing, and ask the tenant if the property management company is actually doing these repairs. If the manager sounds like they don’t care, they probably don’t. Do not waste your time or your money doing business with people who do not care. There are plenty of property managers in the world, some of them are actually bright and good at what they do. If you are having a problem with tenants, it’s because of poor property management. Even the worst neighborhoods can have well managed buildings. You should educate yourself about how to manage a property well, whether you are doing it yourself or hiring it out.
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If renovation companies are ripping you off, don’t pay them. Keep the negotiating power in your hands. You should only have to offer money for materials up front, and if they are dishonest or inept, sue them. It’s worth the time. You can blacken their credit, and if the dollar amount is high enough, you can garnish their wages or attach their accounts. Complain to the State Contractor’s Licensing Board, the Better Business Bureau, and any other consumer watchdog group that will listen. This only takes a day or two, and you will be surprised how these people suddenly change their attitude.
If you have a particularly problematic property, get a home warranty. When you pay a home warranty company $500 per year, their goal is to fix things as cheaply but effectively as possible. Think about it…what’s to stop a dishonest roofer from drilling holes in you roof? Or a dishonest plumber from causing leaks in your plumbing? Or a dishonest electrician from causing an electrical hazard? Then they tell you “Oh my God! You need to throw money at me, you rich landlord!”
Insurance is necessary to have, but you should try to never use it. There is a bureau called CLUE which monitors how much money you take out of insurance companies’ pockets in the form of claims. When you get in an accident, even if it’s not your fault, don’t be surprised to find your premiums going up. This is not a risk adjusted profile, as the company would like you to believe, it is a 30 year loan to cover the cost of your claim. Some insurance companies just let the money fall out of their pockets, no questions, no grief; not surprisingly, these companies charge a lot more for premiums than companies that run a much tighter ship. I suggest that you develop a relationship with an insurance broker. Be careful because insurance brokers often get paid based upon how much you pay for premiums, so they have a conflict of interest! They want you to pay more. Let these folks know that the last broker that you used charge too much and provided inadequate coverage. Let them watch you dump a few insurance companies if they charge you too much. I’m not telling you to be unreasonable, but if you get stuck paying too much, you can change insurance companies, and usually get prorated refunds from the company that is over charging you. It’s worth every penny and every minute of your time.
Honest, hard working, intelligent people are out there, but not everyone fits this description. When you find someone like this, count your blessings and treat them fairly. If they deserve to get paid well, pay them well. A lot of this business is about having connections and knowing the difference between valuable people and a people need to be exposed as the fraudulent incompetents that they are.