How to rent SFH without landlording question

How do “gurus” rent SFH with out landlording them. I know they can use a management company, but is there another way to get that cashflow with out being the landlord.

If your not in Texas, you can owner finance. =)

Sounds like you want your cake and to eat it, too. :wink:
You can set up your rentals as Rent To Own’s. This way you’re dealing with tenant/buyers instead of tenants. Definitely will bring you a better quality resident. I can’t guarantee you’ll never have a problem again, but this will certainly cut down on typical landlording problems.

rent to own would be the same as a lease option correct? as far as owner finance, would i be the owner in that situation and what would the advantage be then as opposed to just selling.

They would be the owners, you would make the cash flow, with a larger down, and you could charge more monthly. If your not into the cash flow, then just sell=)

If they default, you can start all over again, and get another down. Not sure of the processes it would take to get them out.


The answer is that the gurus don’t rent without either being a landlord or hiring a management company. Rent to own, lease option, and land contract are not much better than simply renting. The gurus claim that it is because they either don’t know any better or they don’t want to tell the truth because it will hurt seminar sales to newbies.

A VERY small percentage of “buyers” of rent to own, lease-option, or land contract properties ever buy them. The reason is that they were never better than renters to start with. Almost by definition, someone entering into one of these schemes has poor credit. They are a bad risk. It is true that you MAY be able to get a lease option premium, but that often comes at the expense of waiting longer to place the “buyer”, thereby losing rent in the mean time.

Another myth about rent to own, lease-option, and land contract deals is that the buyer will do all the maintenance, pay the taxes, etc. What usually happens is that the tenant can’t afford to do the maintenance or does it wrong and unless they are carefully supervised, at some point they’ll just stop paying the taxes. Additionally, with a rent to own or lease option deal, it is illegal in most states to require the tenant to do the maintenance. Check your state landlord-tenant laws.

So, to answer your question, if you don’t want to be a landlord - the best solution is not to own rental properties.

Good Luck,


Is a property management really not worth the percent they take? I read one of your posts property manager on it. If they take 10% over the course of the mortgage and then you sell the homes once the renters have paid them off, wouldnt that be worth it? I know the margins are slim, but how much time and effort is saved by a management company?


It all depends on the numbers. The vast majority of people who hire out everything (management, maintenance, etc) are losing money on their rentals. You’ve got to remember that when you’re using a management company, there are additional expenses to consider. Do they charge to find tenants? Many charge one month’s rent for doing so. What do they charge for maintenance? Many charge a small fee for arranging the maintenance - which is also quite expensive. Does the management company charge extra for evictions?

Can you use paid management and paid maintenance and still make money? In most cases - NO. Should you still invest in rental properties? Will the loss of cash every month be offset by the paydown of the principal? Could your money get a better return elsewhere? That’s up to you.


off topic - how many rentals do you own propertymanager. I saw another post of yours saying you have dozens. over 30?

Yes, I have well over 30 and we are still growing. That’s why I know that this guru nonsense is wrong. If you only have 1, 2 or 5 rentals…a few rentals, then it’s easy to delude yourself into believing that the guru nonsense is correct. As your portfolio increases, it becomes readily apparent that the guru expense numbers are extremely underestimated. They either don’t know what the real numbers are or they don’t want to lose course/seminar sales by telling the truth. I suspect that many of the “gurus” are not successful at REI, therefore they moved onto marketing their courses and seminars. Many of the gurus have been bankrupt and many more will be bankrupt. There are very few that are the real deal.

Take just one example. What guru do you know of that discusses tenants causing thousands of dollars of damage to your rental? What guru do you know that includes this damage into their expense figures? I don’t know of a SINGLE guru - NOT ONE! Does this kind of damage occur often? No, but it does happen. When you have a cash flow of $100 per month, how often does a tenant have to do $2,000, $3,000, or $4,000 worth of damage to affect your cashflow.

I hang around with other landlords that have between 25 and 100 rentals. EVERY SINGLE ONE OF THEM has had this type of damage multiple times. So far, in the last 3 years, I’ve had it happen twice.


good info. how many hours per week does your business require with all of your rentals? do you sell your rentals as you go or do you hold them until they are paid off?

I managed 200 low income units. 99 percent of our move outs had to have the carpet replaced. The Luxury communities 99 percent were just as good upon move-out.

did you work for a management company?

Yes-I just started my own investing company, but I have managed multi-level communities since 1989.

with all of your experience, what have you decided to focus your investing in. low level, mid level, rentals, flipping?


No, I don’t sell my rentals, although I have sold a few extra deals when I had more deals than I could do personally. At this point, I believe that I can easily manage and maintain 50 rentals by myself (I’ll know soon). My goal is to have 100 rentals by 2010, but I’m sure that I’ll need some help by then. I currently work about 4 hours each day (mon-sat) on the rentals, including management and maintenance. I usually work 11am-3pm doing various things (painting, laying carpet, plumbing, etc - whatever is needed). It’s a nice pace. (When I started, I worked six 12 hour days).


With the management experience you’ve had, you should do GREAT with your REI business. Just make sure you use the real numbers - no guru nonsense for you!

Good Luck,


What kind of cash flow do you have propertymanager? Why did it take more time at the start of the business when you had less properties?

Property Manager-you could buy an apartment community right now. You can go to, and e-mail all the realtors, and you’ll find an owner that will carry 20%.

I am really really sick of managing. Not rent collections, not reports, or dodging bill collectors, but the complaining about neighbors upstairs, next door, a building over. I need a break from that!

I was going to flip, now I’m looking “at the very beginning stages” of buying a high dollar lot in Austin, building and selling.

Hubby has HVAC certified, plumbing, re-hab and new construction for multi-level. If I flip would like to start with houses that have market value of about $100k.

Would really love advise on the building part=)


In guru fantasy world, I have cash flow of more than $200 per month per rental. Unfortunately, guru world doesn’t quite extend to my area of Ohio and I only have about $100 per month per unit.

I had to work harder in the early part of my business because we were rapidly expanding and everything had to be rehabbed. We are now expanding more slowly and it is easier to keep up. Also, I’m better at getting great deals that don’t require as much rehab.


My only suggestion to you is to carefully evaluate your market and its potential future. The RE bubble has burst in most of the country and has a long way to go to hit bottom. New construction and pre-construction deals were the way to make money over the PAST few years, but are very risky now in most of the country. If you’re confident that your local market has a lot more demand or if you have a niche market you can exploit, the go for it. That would be suicide here in Ohio.

On the other hand, I believe that we’re getting close to the perfect opportunity to be a landlord. Rental demand seems to be increasing and millions of homeowners who bought houses with gimmick loans will be losing their houses. In addition, the real estate fad is over and millions of new landlords want out BAD! The big problem remaining with rentals is that the population is increasingly descending into a moral abyss. The lowest class of our population has been breeding at a phenomenal rate, encouraged by our socialist welfare state. The current (and I believe the future) tenant pool is terrible. The biggest challenge that I have in filling rentals is that applicants can’t pass our criminal and previous eviction checks.

Of course, being a landlord would mean that you would be forced to continue dealing with the stupidity that you described above. Believe me, I understand. Fortunately, I have just about gotten numb to all the stupidity.


I really really appreciate your advise. We have 12 acres in a small town right outside of Austin. I was thinking of buying about six mobile homes at about 5k, rehabbing and renting them for cash flow. (I know that they are not an investment.) My husband will deal with the residents, me the collections.

That’s awesome that you are expanding in Ohio, I’m from Nebraska and I can only imagine how hard you have to work.

Thank you again for the advise, I’ll make sure and study the market. I love opinions, because I am new, and really am soaking every thing I can in right now.