Thanks Paul! That was one of my fears too – tenant turnover – and I’m actually suffering on a few other properties because of this currently. (I haven’t owned them long – so not a good case study) but I’m definitely feeling the weight of turnover and vacancies at the moment.

As for rates, I remember being charged a full 1% increase on standard home mortgages. I believe it’s the same now, but haven’t checked. If so, I agree that refinancing may not be all that beneficial.

Hey Spike!

My PM company charges 7% of all incoming rent. So about $140 per month. They also charge me a commission fee when they sign a new tenant lease or extend an old one. The commission is 1/2 of 1 month’s rent. I’ve had the same PM for 5 years, and thankfully there have been no major issues. They are honest, communicate well with me, and we consider each other business partners. I took a lot of time deciding my property manager – they are the backbone of my business!

As for responsibilities, they do almost everything. Advertise vacant units, sign up and approve tenants, handle move-ins, contract handy-people for repairs, collect tenant rent, enforce the contract rules, evict if necessary. They will even go to court on my behalf if it comes down to it (I think there’s an extra fee I pay for that).

They don’t pay my mortgage, tax or insurance. They need my approval to repair anything over ~$300, so we talk pretty often about repairs and upgrades as needed.

I know a lot of people who have issues with property management companies. I think it comes down to setting the right expectations (for both sides), and constant communication. I’m lucky in a lot of ways to be working with the team I have!

Great question! It’s because the bank appraised the house at only $182,000. And they will only lend a max of 75% of THEIR valuation (not your purchase price). So the downpayment is the difference between my agreed purchase price, and their maximum allowable loan amount. :)

Haha yep. Some people have a passion for real estate. They find it fun and interesting. So even though it’s a pain in the ass (and might not grow wealth as easy/fast) they still do it because it fulfills their life. I used to feel this way – but am slowly changing into an “easier = better way” person :)