Part 1: Interview with Todd on How to Be a Great Landlord
Todd is a power RentHoop user, real estate developer and landlord. We asked him a few questions about how he got started, what his secret sauce is and how RentHoop and RntX will help him and other landlords improve their business.
Let’s start with how you got started as a landlord. How’d that happen?
That’s a really great question. My fiancé and I were actually looking to rent an apartment in Northgate (Seattle). For a 1 bedroom 1 bath apt, we were looking at about $2,000 per month in rent. Parking was an extra $150 per month, and no utilities were included, so we would be all in at about $2,500 per month. We thought it didn’t make sense to pay that if we could instead get a mortgage for around the same price. We were originally going to buy a Condo in Bellevue, but for the price of a 20 year old 700 square foot condo in Bellevue, we could build a brand new 3 story house in South Seattle. We knew that other young professionals in the greater Seattle area would be struggling with the rising rent cost, so we decided to live in the master bedroom of our new home and rent out the spare bedrooms to my college friends. The rooms were rented out almost instantly. We then repeated this process a few more times, and today we have a total of 5 houses. With appreciation over the last two years our real estate portfolio is around $3.2 million, and we have a total of 30 rooms rented out.
What’s your biggest cost as a landlord aside from the mortgage?
Other than the mortgage, the biggest expense we have is the maid. When my fiancé and I decided to rent out bedrooms, we thought to ourselves, “what do roommates fight about?” The biggest issue we kept coming back to was cleanliness, so we have a maid clean all 5 properties on a weekly basis. She mops the floors, vacuums the carpet, and deep cleans the kitchen. She even scrubs the toilets, tubs, showers, and sinks, and she vacuums everyone’s room.
How do you ensure tenants get along? Any secrets you can share?
I match all of the tenants by personality. We have a house that is all female tenants, a house that is all male, and a few houses that are mixed. Using the Dealbreakers feature from RentHoop is a great tool. We match roommates together who have the same Dealbreakers. We also supply all of the toilet paper, paper towels, hand soap, dish soap, dishwasher soap, Clorox wipes, and garbage bags. In addition to that, we supply all of the common areas with brand new furniture from Macy’s furniture gallery. Also, every house has two fridges, and each tenant has a shelf in the pantry with their name on it as well as a cabinet with their name on it.
What sort of tools are you using to manage your business? Do you collect your rent by check, direct deposit etc.? What do you use to screen applicants?
The rent collection is all electronic. I use either Venmo or Paypal. To screen tenants I use a service called Smartmove Transunion. It is free for the landlord. The applicant pays $35.
Is there any way to ensure you get a good tenant?
99% of my tenants have all come from social media. Facebook and RentHoop have all been a huge help.
How important is a credit score in determining whether someone will be a good tenant or not?
There are a lot of people, mostly college and international students, who don’t have a credit score. Some of those people have turned out to be some of my best tenants. I don’t think credit score is something that landlords should be overly reliant on.
Do you have any philosophies on service as a landlord?
Make your place so awesome that people don’t want to leave. Every few months we take out all of the tenants to a fun event. The most recent one we did was ice skating. Before that we had a picnic and baseball game, before that it was mini golf, and before that it was bowling. Added value is huge.
How would you feel as a landlord if you got an application from a renter who had a RenterScore that showed their rental payment history among other things?
I think that would be awesome. It would help mitigate potential issues.
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This interview was edited for brevity and clarity.
RentHoop is a mobile app for finding roommates and rooms on iOS and Android phones. We were recently named one of the Most Promising Housing Apps to Watch in 2018 by Forbes and graduated from the Startup Boost(November, 2017) program in Los Angeles.
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