REAL TALK RENTALS
Episode 10: Signing Up With a Property Manager: The Process Explained
Is it your first time hiring a property manager? Ben Bailey and Eric Dixon are here to help those first-time and long-time owners with the tedious process of hiring a property manager! With their special guest, Matthew Medonich, you'll be guided through finding your perfect match. So take some time and find the property manager that will make all your rental goals come true.
This episode covers:
- How to find a property manager
- The signup process
- What you need to have ready
- What to expect from you first few weeks of management
Signing Up With a Property Manager: The Process Explained
Ben Bailey: Coming up on today's episode of Real Talk Rentals, we're going to talk the onboarding process, what it takes to sign up with a property management company and what you can expect. Welcome to Reel Talk Rentals podcast brought to you by on Q Property Management. We're here to give you the inside scoop on the behind the scenes of property management, everything that goes into it, all the tips and tricks. I'm Ben, I'm your host. With me, as always is Mr. Eric Dixon, the go to property management guru here in Arizona. And then today we're going to be talking about something. That required a special guest. Very, very special guest. So we're going to be talking about. The process of signing up with a property management when you are ready to make that leap. What are the steps involved? We call it onboarding. And in order to go over that, we have our senior portfolio portfolio manager, Matt M.H..
Eric Dixon: Welcome, Matt. What are you guys laughing about? Thank you. Thank you. Put your last.
Matthew Medonich: Name. That's all right. That's what I do here.
Eric Dixon: What's your last name?
Matthew Medonich: Matt mednick. Yeah. Meadow Niche.
Ben Bailey: There it is. I built it up too much and that was exciting.
Matthew Medonich: I was.
Eric Dixon: Excited. Matt or Matthew, But.
Matthew Medonich: Yeah, no.
Ben Bailey: Matt Matt's good. All right, Matt, To kick us off, maybe you could walk us through kind of your history of property management, how you got into this biz and how you got to where you are now.
Matthew Medonich: Yeah, sure. No, I appreciate you having me on the podcast today. And really my my background is pretty simple. It's really service oriented. I'm from Las Vegas, Nevada. My mom works in the hospitality and tourism world and my dad does as well. My mom and the hotels and my dad in the restaurants. And so that is all I know and that's what I came up with. And so when I went out to school, I went to to school for hospitality and tourism management. And that's what my degree is in and thought that is what my life would be. And once I graduated college and had a real big boy job in the hotel world, I realized it's not what I wanted and found my way. Coming back to Arizona, still in the hospitality industry, just not necessarily the hotels dabbled in the restaurants to follow my dad's footsteps realized that wasn't really what I was aiming for as well, and and landed into property management, which I had never really dreamed of or thought of. My dad had rental properties growing up and self managed, didn't know management companies existed and had an opportunity to join the team and loving it. It's been great and I take care of the onboarding process and it's been about four years now, so it has been quite the journey from hotels to restaurants to property management.
Eric Dixon: Well, and Matt, I was around, I had the pleasure to be part of the recruiting. Taylor kind of recruited you to our office and then I was in those interviews. What was it that interested you? Not just on cue. This isn't a podcast about how awesome on cue is, but just the industry as a whole because you quit. I mean, you quit your job, went to real estate school for two weeks straight, you did the crash course and then put your life on hold to pursue that.
Matthew Medonich: So, yeah, it was it really came down to is more intuitive for the family. The hotel industry is very, very tough. All the nights, all the weekends, all the holidays are all blacked out. You're always going to work. And I really enjoyed the service side of things and making people's lives a little bit easier. And this still had that touch of, Hey, you can provide that service, you can make it easier for other people around the world and to make it a good experience. It's a win win win for everybody, win for us as a company, win for the owners and a win for the tenants. And I'll throw in another win win for the neighborhood as well. So it really is a win win, win win. And it was just a positive, happy environment that I needed to be a part of.
Eric Dixon: No, So that was cool. What other thing that you glossed over in your history is you manage some videos and stuff like Airbnbs and stuff. Yeah, I think that's what attracted me to your resume was, well, he kind of actually has done property management managing vacation rentals, so maybe he could do the long term rental stuff.
Matthew Medonich: Is Yeah, no. So I went to school out in Hawaii and Airbnb's and VRBO is really the name of the game out there, hotels and short term vacation rentals. And so when I had an opportunity to manage a couple of those for a widowed lady who worked for Disney for 30 years, so she had quite a few of them near the university and I managed those and had that experience. I thought, Man, this is this is really nice, very tough. The short term environment and the vacation rental side of things. And so when I heard that we do property management and we don't do the short term and furnished in the vacation rental side of things, I thought this would be something interesting and I was intrigued. And, and here we are four years later.
Eric Dixon: Awesome. No, we're we're lucky to have him. So we're actually going to we're going to grill Matt a little bit today, right? Ben Oh, yeah. So we came up with some questions. We've referenced Matt a few times on the podcast, like, Oh yeah, we've got to have Matt on. He's got the best stories and that sort of stuff. But the reason he has the best stories is because he's part of that initial contact with our customers, the onboarding, and then he follows it through until it's leased. And even now, three, four or five years later, they're still reaching out. Yeah. So yeah. So what have you got?
Ben Bailey: Ben Yeah, So like, like Eric said, if you were calling on Q Property management today and you're an owner interested in signing up, you're going to get Matt on the phone. So what we wanted to do is start from the beginning. If I'm an owner, I'm calling, what kind of questions should I be asking a property management company? What should I be looking for when signing up?
Matthew Medonich: Yeah, so you're right, it kind of starts here with myself and the onboarding team, and I've taken full advantage of the current situation with the market and the way of the world and just being extra in the service side of things. Using some of my background in history when they call, I lead with the service foot first, wanting to really go above and beyond. I'll never actually forget one of my first meetings and appointments with Eric when I was still being trained. Sweet little old lady from from Poland. And we get out there and I don't know what I'm doing. I've been licensed for 24 hours now. Just did the nine day crash course, built the 90 hours, got licensed, and here I am first, first real appointment. And I'm not going to speak on expertise at this point. I have 24 hours under my belt, so I thought I'll lead with the service first. And and she needed a threshold glued and she had the the piece of wood and the glue with her and she said, Hey, how much would this cost for us to fix this right now? And I'm not a handyman either. I don't I don't care about a tool. I don't care around a tool belt when I'm going to these appointments.
Matthew Medonich: But I just thought, you know, I can easily do this. I slap some glue on there and she's elderly and won't be able to do it. So why don't I just take care of it right now? I just said, hey, I'll, I'll do it right this very second. She even signed on. We just walked into this house. But she's not a client. She's not a customer. I haven't pitched anything. She knows nothing about me or her or the house or the industry or the rental price. Anything but just led with that service first. And that's what really is going to set everybody apart. So some of the questions I would ask to get to your your point here when you're shopping around and asking about property management is what level of service are you going to provide? Everybody's going to say full service, super easy to say, Oh yeah, we're a full service management team, but what does that really mean? Will you go above and beyond? Will you go out there before they've even signed up? We shake their hand, look them in the eye where you cut the extra key. Will you glue the threshold down? What will you do to earn that business?
Eric Dixon: The best part about that appointment is this lady myself were in the kitchen signing all the paperwork, and Matt's on his hands. Yeah, he's brand new. He doesn't know what he's doing. So just. Just have him.
Ben Bailey: Like this is my job. Yeah.
Matthew Medonich: I want a tuxedo. This is.
Eric Dixon: This is nice. Yeah. So what's awesome? Seeing Matt kind of even answer this is I did Matt's job for five years here at on Q sign the owners, the onboarding process and saw it evolve. And even since Matt started it's heavily evolved but we've tried to do is just actually offer even more service so.
Ben Bailey: So if I if I say. What's your service level? You say full service. What is that? What should I expect that to cover as an owner?
Matthew Medonich: Yeah, Really? Everything from A to Z. If you're going to say full service, it's got to be full service. Right? And when you're shopping around and you're calling other companies, you're going to be overwhelmed with just packages. They're going to say, Well, we have a gold, silver and a bronze or a 1 to 3 tier or well, if you want that, that's a little extra or if you want the tax info there, that's a little extra. Sure. You're going to want to really get into the nitty gritty. Super easy just to hear, oh, hands free, stress free. Don't worry about it. But that full service should cover every single component. You should not be involved. You shouldn't have to talk to the tenants. Your phone shouldn't be ringing off the hook. You shouldn't be getting those late maintenance maintenance phone calls on Christmas morning that there's a plumbing issue. Right. So you want to be stress free. And and a lot of our owners don't live in America. Right. We're not going to get on the phone with them and cover these emergencies right then and there. So you've got to be hands on and full of service and and really think of it as it's your own property. What would I do in this current situation?
Ben Bailey: So if I'm the owner and you're saying I'm going to you're not going to give phone calls and handle the taxes, everything's done. And I say, All right, man, sign me up. Yeah, I'm ready right now on the phone. What do we do next?
Matthew Medonich: That's a dream. It's a dream come true right there. That's exactly what I like to hear. That's a that's a great point right there. Yeah. So once once you're ready to go, I mean, the really the next steps are going to be super easy. And again, I think this leans on the service side of things and making it convenient for the owners. Right. This is a big deal. And Eric and I talk all the time and it is a it's a crazy concept. Okay. You've purchased this home for half a million dollars. You've raised a family here. You have kids here. Your dog was here. You had Christmas birthdays for 20 plus years. You're emotionally attached to this and then you just hand over the keys and the banking information and the Social Security for the taxes.
Eric Dixon: You went to appointment this morning. They haven't signed up and you have the keys and the verbal commitment ready after one one day, right?
Matthew Medonich: Yeah, because the level of service and it really is. It really is.
Eric Dixon: Because I'm pretty awesome.
Matthew Medonich: Yeah. It's just she was blown away that I was willing to even go out there. You know? Hey. Yeah? You want to come out here and meet me before I even signed up? I haven't done anything for you, and I don't owe you anything. You know, just going out there with that. Hey, I don't expect anything in return. Let me come out here and meet with you. And. Yeah, 10 minutes later, she had. She said, Hey, I'll give you the keys right now. I'm leaving. She's moving to across the country tomorrow and super early. She's like, Hey, let me give you the keys right now. Send me the doc you signed today. Yeah. And so it's just super convenient, you know, stress free. You're going to want to hear those words over and over. Full service, convenient, stress free. How easy can it possibly be?
Ben Bailey: So when you say DocuSign, what what does that entail for an owner? Like what documents.
Eric Dixon: That that's a that's an interoffice. Yeah.
Matthew Medonich: Gotcha.
Ben Bailey: So what am I expected to provide you other than the keys? Right.
Matthew Medonich: Well, we're going to, we're going to really want to. Formulate your package of what you're going to provide with the property. So there's going to be some basic questions that are going to cover a large majority of everything. We're going to really dive into the pets, your appliances, the additional services, the HOA features, the community features, gated community, get the get the details from you. That way we don't have to pester you and call you. And so once I gather that information and I understand kind of the package that you're looking to provide, that's when we're going to be able to run you good comps, get you the right pricing. And then once those keys are handed on over the onboarding side of things or the team that works with myself, we're going to take over the rest, get the marketing scheduled, get the coordination, go and get you some estimates. If you need help fixing anything, we'll be able to take care of everything after you've completed that agreement or that DocuSign and provided the the basic information. Right.
Ben Bailey: We'll take care of the rest. You know, it's funny, we were talking about this yesterday when we were talking about the episode, like going over this. But a lot of these owners, they've like you said, they've been living in this home for 20 years. And Eric made a great point. He's like, if I rent it out my house today, I don't have keys. Yeah, everything's.
Eric Dixon: Electronic. I haven't had a front door key for eight years.
Ben Bailey: Yeah.
Eric Dixon: So it's like it's like, Oh, if we rented it, it's like, crap, I've got to get a locksmith to keep. Keep my house. We do not have a key to my house. I use the garage and I use the keypad, you know, and there's that type of stuff that Matt would show up at the house, say, Hey, here are the things you need. Garage door openers, male keys, house keys, you know, the list that you just went over. Right? And a lot of people don't expect that. They don't even know.
Ben Bailey: That you don't think of it. You've just been living with it for so long. But it's like, Oh, yeah, if I was moving into a house and they said, There's no keys, but you can just go in the garage, you're like, Hang on. No, that's not okay.
Eric Dixon: No, the most classic thing is when they go to rent the house and one of the spouses of usually it's a couple you're meeting with or something and they're like, Oh yeah, before we rent it, we're going to replace all the baseboards. We're going to get this painted. And they're like, Are you serious? We're going to fix everything that I've wanted fixed or a dozen years.
Matthew Medonich: To then rent it to.
Eric Dixon: Then rent, Yeah. Oh, man. We should have rented it forever ago.
Ben Bailey: Yeah. We talked about this in a in a previous episode. But I think it goes to your point where Eric said, if you're if you're asking if you should do something, you should probably do it, you know? So it's like, Hey, Matt, do I need blinds on my windows? It's like, know the fact that you're asking, right? Should clue you in to Yes.
Eric Dixon: You need blind. Ask yourself why you're asking me that question.
Matthew Medonich: Yeah. No, the best is when you're walking the property and they go, so this this door handle over here, you just got to shake it a little bit and give it a tug. It'll open right up. Like because you had to explain that to me. If you've got to write down instructions, let's just get it fixed. Yeah. That's not going to be there.
Ben Bailey: When the tenants show up to be like.
Matthew Medonich: They are just a jingle. You're going to walk the tenant through all of this, right? Like, No, we need to just get this fixed. Yeah, this is broken. This isn't a Jimmy rig.
Eric Dixon: Yeah. How about this? A backyard of just dirt? Yeah.
Matthew Medonich: Yeah. No, we. And it's common. I mean, it's just. It's really common, especially with new builds. A big one that people don't think about is that unfinished backyard or ceiling fans. Massive, right? The new builds aren't coming with these ceiling fans. They're not coming with the backyard. They're brand new and they're awesome. And that's going to have a positive impact for you. But there are always going to be a few things. Whether the House is super old or brand spanking new, something has to be done to get it rent ready, get it prepared for the next person.
Ben Bailey: Awesome. So I signed the DocuSign were good. What?
Eric Dixon: And you guys. The DocuSign is the owner's agreement owners.
Ben Bailey: Yeah, I'm talking like that now.
Eric Dixon: Yeah. Yeah. So in fact, you signed the management agreement. Yeah. And we're kind of talking in hypothetical, right? This isn't just if you hire on Q, if you're shopping for a management company outside Arizona, you can't hire us yet. So these are the types of things, right? So after you sign this management agreement.
Ben Bailey: Yeah, if somebody if somebody is not doing those things for you, you should be like if they're saying you don't need a key or blinds, maybe that's a red flag right away. Who are they going to be putting in this home? That's okay with no key and blinds. So once everything's signed, keys are handed over. What do you. What do I owe you to get this process started? Are there costs involved, like up front? Obviously, I know on Q But how, how does that work?
Matthew Medonich: Yeah, no, there's not really necessarily an upfront cost. It's really what we're going to do is we're going to get the team in there and get that house what we would consider rental ready. Right? The best thing that I would say that you can do is to answer your question of upfront costs is to put your shoes, put yourself in the shoes of the tenant and the mindset of the tenant. Right. There is a difference between home ownership and renting. And homeowners are so tough on themselves, right? Sometimes it's you're pulling teeth, you're like, Hey man, you got to fix this massive ripped up patch of carpet that your dog did like, No, I don't think I do. And then other times they're the other extreme. They're like, Hey, we want to do all new granite, all new flooring, gold faucets. And you're like, Whoa, you don't need to do any of that. This house is beautiful. And so we want to get in there. We want to get the team in there and get it inspected and make sure that, hey, this is going to be set up for success and really treat it like a true investment property. So no upfront cost as far as you know, you don't owe me anything. I don't need a credit card. I don't need a check. You just sign that owner's agreement, give us the keys, and then from there we can tackle the next couple of steps there.
Ben Bailey: And do you find I see a lot other companies maybe do have startups. Do you get questions a lot? Are people surprised by that when you say, Yeah.
Matthew Medonich: Yeah, no, it really is. It's it's the question of, Hey, this is too good to be true, right? This can't be real flat rate fees because you know, or I don't owe you anything right now. Like, here's my credit card. Who do I make this check out to? It's No, no, you don't owe me anything. I'm out here just providing that level of service, and I want to get this ball rolling for you and keep it successful and keep your hands out of it.
Eric Dixon: One thing that just came to my mind that may answer this question in a roundabout way is what I tell the owners to when they sign up, they say, Hey, what are the upfront costs? What can I expect over the next 1 to 2 months? Right. So you do have to break down, hey, when it gets rented, the fees for leasing the house and the management fee or whatever, but I tell them the most expensive thing, the highest fee is vacancy. So the longer that you drag your feet and the longer you're shopping management companies, the longer you're taking to paint the house yourself to save $1,000 just for it to sit vacant another month like that. Vacancy costs you far more than all of our fees annually. If this house sits vacant for one more month, it costs more than you'll pay us over the course of a year. Right? So they're like, Oh, wait, so I don't save money If my wife and I just paint it every weekend for the next six weeks. Yeah, No, because you lost out on a month and a half of rent.
Ben Bailey: Yeah. Plus you got the utilities still you're paying. You're not going to be painting with no air conditioning. No.
Eric Dixon: It's like, well, it's vacant. You got the pool, you got the landscaping, you got the pest control, you got the utilities, right? And then you have a mortgage payment. Most of our owners have debt to service. That's just like, no. The biggest thing is when you're confident in the management company you want to go with go full steam ahead. If they're a trustworthy, good company, take their recommendations on cleaning, on painting, on rent, ready stuff because the highest cost is vacancy. Yeah. So anyway, it kind of relates to your question, but yeah, there's fees that Matt's going to go over with somebody who calls in. But really the biggest cost is how long that thing stays vacant.
Matthew Medonich: All right. To Eric's point, I know when I'm walking the properties with the owners, I let them know, hey, this is an investment now, right? I know you're emotionally attached to it and you've had great times here. You've got to you've got to flip that off and put it into investment mode. Just like any true investment, it takes a little bit of money to make a little bit of money. So there are some things that will need to be fixed back up and then that golden rule treat others how you want to be treated. You want to set the standard for your property, give the tenant the property how you want to receive it back in a year from now or two years from now or three years from now. If you don't want to patch the holes and you just give it to them. With all these holes from all the family photos that were hung up, expect a few more. But if you're going to patch it up and set yourself up for success, you're going to be okay.
Ben Bailey: That was one of, I think, not knowing a lot about property management. When I joined on cue that I was really impressed by with Matt and just the company as a whole, that value of like. You're trying to maximize their investment. It's not like you're we're going to make more on a monthly fee if it rents for more or less know, It's like we're trying to help the owner. You're walking them through this rent ready saying replace these things, do these things because that's going to make them more money. Yeah. And it's like, oh, okay, we're not just throwing this stuff out there to mark it up and make money on it. It's not about that, right? You know?
Eric Dixon: No, it is truly, you have to treat it like an investment. And it's like some some of our owners, they lose money that year, but with appreciation and their tax benefits and everything else, it's a it's a tax or it's an investment where they're going to have ups and downs. And if you follow our advice long term, it's going to be it's going to pay dividends, right? We're going to get a better tenant faster and it's going to get the rental income sooner than later.
Ben Bailey: Right. All right. So, Matt, I know you see it all when you go out there.
Eric Dixon: So I know we haven't got into any juicy stuff.
Matthew Medonich: Yeah.
Ben Bailey: Well, what are what are the mistakes? You know, you've kind of touched on this as you've gone through, but like, what are what are the assumptions that you think people should be avoiding and mistakes they're making that's hindering this process for them?
Matthew Medonich: If you think your house is rental ready, it's probably not right. There are going to be some things that need to be fixed. If you have to give me any type of explanation or backstory of why the wall was painted, and I've seen it all, like you said. Yeah, if you're if the whole house is jungle themed and you have gorillas painted in the kitchen and and giraffes in the bathroom and, you know, the jungle theme was cool, you know, that was nice for when you lived here. But I think the biggest assumption is the tenants are not going to love what you loved, right? They don't love all of the things that you had done previously. And they don't love that green carpet. They don't love the I've seen chicken coops in the backyard. You know, they don't want to keep your chickens back there. They're probably not going to have chickens. Right. And don't don't assume that they're going to invest their own money into your home as well, right? Oh, well, if the tenants want to paint it, they can do that. Well, they don't want to paint it and they're going to want it painted before they move in. Right. They don't want a deep clean the house. So again, just kind of what we've what we've spoken about. Yeah, you've got to put yourself in the shoes of the tenant and walk the property in the very end and say, Hey. What I pay X amount for this house. And if you can seriously say yes and look around and say yes, it's worth X amount, then you're getting close. Then let me come out there and tell you a few more things. Right, Because I'm sure there's going to be a difference there. But just just do everything you can and help yourself out.
Eric Dixon: Yeah, a lot of people just need they need an expert like yourself to walk through with a different set of eyes that has never been there. Like, hey, you know, obviously the baseboards need cleaned and they're like, obviously, Really? Like, Yeah, right. Look how dirty they are in a nice way. And I feel like Matt's great at it, but it took me years to kind of fine tune how you communicate with them. Like, Hey, look, I don't want to offend you guys. You've never rented a house before. And usually they're like, No, I'm, I'm all ears, man. We know what we need to do. And some of them, I mean, unfortunately for us, we're trying to sign up as many as we can and offer this great service to as many as we can. Right. But some of them, it's just not a good fit. Sure. And it's not because of us. It's like, hey, maybe you're not ready to be a landlord. And I say that almost every episode. Yeah. Like, look, some some of the listeners and some of some of us are like, Hey, I would love to have a rental. I'd love to be a landlord, but you have to be able to stomach investing in the property. You have to be able to, hey, one Sunday morning you're going to have to replace your roof like I was in church a couple of weeks ago and, you know, crazy rainstorms, right.
Eric Dixon: And the roof needed replaced, you know, And it's like that was not expected this year or next year or the year after that. Right. But it's kind of just like, no, this is an investment. This is a 20, 30 year plan. Over over time, it's going to work out. So I think some of the assumptions Matt mentioned one, but about being rent ready, but a lot of people think to like, I'm going to hire management company and they are going to do everything and we all are full service, but you still have to be available and willing to communicate and stuff like that. We recently even we've had owners that need a big repair approved or an application and they're like, they're MIA. I mean, it's just like and then they come to me as a broker because they're like, Hey, it's been three days. They haven't responded. Eric You got to make the decision. I'm like, All right. So I dive in there and I'm sitting there going, Why would somebody trust us to manage their million dollar portfolio and just disappear? Yeah, it's just an interesting, interesting mindset to have.
Ben Bailey: Yeah, I, I see through our email server sometimes we'll send stuff, you know, six months after Matt signed them and I can see they, they just marked us as spam. It's like, wait, you're paying. We're trying to send you stuff you need and you're marking our emails as spam.
Eric Dixon: But I don't need that anymore. You got to send me my Yeah, yeah, I'm good. And then they'll text me.
Matthew Medonich: Merry Christmas. Yeah. Hey, Merry Christmas, Matt. Hope everything's going.
Ben Bailey: Okay. Oh, man. So, Matt, I got to ask you, you mentioned this yesterday, but can you kind of talk about the two buckets where you talk about as far as a rental, how to think about.
Matthew Medonich: Sure. Yeah. No, I think it's the best the best explanation and mindset of a future or a current landlord is there's basically two buckets that I like to break everything up into, right? Because every home has a ton of upgrades, right? When you live there and you did and you knew this and knew this and LED light bulbs and this and this and this, not everything adds value. So the two buckets I like to break down is there's an add value bucket and there's a quickness of placing a tenant bucket, right. Just because you did the LED light bulbs and it costs you 75 bucks does not mean you're going to tack $75 onto the rental price. So the two buckets, the add value as far as the rental side of things and the quickness of placing a tenant, some of them will kind of hyper blend into both. But the appliances is a big part, right? You're going to you're going to see a little bit of add value, but also going to place a tenant much faster. If you are able to provide the washer, the dryer or the fridge. Those are the three heaviest, most awkward things that nobody wants to lug around, Right. So if you can have that or if you can add pets, pets are going to dabble into both. Right? But if you did the cool glass bowl in the sink in the bathroom, the tenant probably does not want to pay you more for that. You did backsplash in the kitchen. Cool. Probably don't want to pay you more for that. Right? You have copper knobs instead of stainless steel knobs. That looks great. It looks very, very nice. They probably don't want to pay you more for that. So keep that in mind as you're doing upgrades. Not everything needs to be upgraded and not all of it will add value, but it may add quickness of placing a tenant for, you know.
Eric Dixon: There's a there's some value in just knowing that too. If you're listening and you're like, I'm going to eventually rent my house out, that's my dream because I think a lot of people listening are they may own a home now and they're like, I want to upgrade my house, but keep this as a rental. Keep that in mind when you're doing renovations and upgrades is a lot of it's not going to get more rent. It's going to be cool and it might rent it, rent it faster, but it's not going to rent it for more money. Right. And that's what I Matt mentioned appliances is what I the example I use is if you have two houses in that neighborhood for rent, one has appliances, one doesn't, they're rent, they're at the same price. They're going to take the one with appliances. They're not going to pay more for it, but they're going to pick that one to apply on. Right. One of my favorites is and this is in a decent solar, but it's hilarious when people are like, Hey, my house has solar, I need like $500 more a month. And you're like, it doesn't go dollar for dollar just because they're going to save 2 to $500 a month on their electricity bill does not mean they're going to pay 2 to $500 more in rent, right? I mean, that's 100%.
Matthew Medonich: Yeah. Because now it's not a perk anymore. They're just covering your costs. Yeah, it has solar, but I'm going to charge them every penny of it. It's like, well.
Eric Dixon: Nobody's going to pay it. It was solar is like, Hey, I need $300 more a month. We explain it. Whatever. They try $300 more a month. But on Zillow or Redfin or, you know, rent pads or whatever, they're looking on their website or our website, and it'll be priced $300 more. And they're like, I'm not even interested. I don't even know if I have solar or not. Yeah, it's overpriced.
Ben Bailey: Nobody, nobody shops for a home. They're going to look at like the schools for my kid. They're not going to be like, I want to move to Arizona and I want to live in a house that has solar. Those are my qualifications.
Matthew Medonich: I want to pay for it.
Eric Dixon: It's like, no, solar is a perk. I mean, sure, I've got solar and it's awesome, but you don't get dollar for dollar, right? Yeah, that's the whole point. Right? Right. And it's like, hey, I have a pool and it costs me $400 a month. I got a loan on it, so I need that much more. It's like, Hey, the financing on your pool has nothing to do with the rent ability of your house, right? Yeah. You know, and same thing with a mortgage payment. I mean, we get it a lot right now where we're in a little bit of a downturn and people's mortgage payments are higher than their house is going to rent for. Yeah, yeah. And so it's like they they'll say, Hey, my mortgage is 2400. I need at least 24 plus your fee. I need 2500 bucks.
Matthew Medonich: Almost comps for 18.
Eric Dixon: And 1800. Yeah, it's like I was in a conference in Texas and they said, hey stuff stuff right now is renting for three or 3 to $500 less cash flow than it was six months ago. You know, And so if you bought six months ago, you put minimum down. Yes. You're going to rent it out and lose money. Right now. The great thing with real estate is over the next three to 5 to 10 years, you know, appreciation will happen. Hopefully you have a fixed rate mortgage and it will turn positive at some point. But that's one more thing that you just have to realize that financially, you've got to think about it in the financial sense and the ease to get a tenant sense. I love those calls buckets.
Matthew Medonich: But yeah, and to your point, Eric, I'll even have that talk with the when the owners are bringing up all the numbers, right, they go, well I don't know, I need X amount or whatever the case may be. And you just say, hey, it's not a get rich overnight scheme. You may not cash flow positive. And I have signed up individuals that say, hey, I'll still be -200 bucks, but I'll still do it because I know next year I'll increase the rent, the next year I'll increase the rent, the next year I'll increase rent. It's it's usually not a get rich overnight. Those are very rare now when it's like, hey, I don't have a mortgage. I don't I don't know the last time I ever heard that I don't have a mortgage on this house. And so it's going to be the longevity game. And I like to explain that. And it goes back to, again, treating it as a true investment. Right? Yeah. You got you got to buy it now and then give it five years. See what's going on. Give it another ten years, see what's going on. Give it 15 more years. See what's going on. And so there is a game to be played.
Eric Dixon: I mean, I liken it to everyone's, you know, you look at your 41k contribution or you're buying stocks and stuff and it's like, think of if you just said, no, I'm out every time the stock market went down. Yeah. And it's like, oh, the stock market went down. Let me sell everything. It's like just because you're going to lose $100, $200 a month for this next year does not mean that the tenants still they're still paying off your mortgage. You know, they're still contributing to paying this house off and doing that. So and that's a whole other episode, the financial side of of rentals and kind of the game within the game is is amazing and I'm I'm sold on it I've seen we manage over $1,000,000,000 of real estate and you know and I see mommas moms and what do you say mausam moms and Pop's mom and pop shop I don't know.
Matthew Medonich: My mom.
Eric Dixon: And papa's I don't know. But you see these little you know, they start with one, then they get two, then they get three. And you've got some people that bought a house every 3 to 5 years and now they're 60 and they've got ten homes. And we manage for them and do two awesome success stories. If you just hope, you know, follow the advice of the onboarding team and then the property manager and the whole system.
Ben Bailey: All right. Well, guys, I think we covered it. All right, man, I'm sold. All right, hypothetical owner. Sign me up. I gotcha. I'm ready for. I'll take the keys. So that's it from us. Be sure to follow the podcast wherever you are listening and leave us a five star review if you can. It really helps us out and we will see you guys next time.
On Q Property Management is a full-service Property Management company specializing in managing residential rental properties. On Q's client-first approach - utilizing a proprietary process and set of tools - delivers a more transparent and profitable property management experience. With year-long tenant guarantees and a no-fee cancelation policy, On Q is dedicated to earning you business month after month.
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