Glenn's Roomate Experiences and Property Management Stories

In this Episode Glenn talks about being a property manager, subletting and finding good tenants/roommates.
Glenn talks in detail about some of his bad roommate experiences and how it shaped the way he conduced business. 

• Why setting the right expectations is so important
• How to set expectations
• How to attract the right type of tenant/roommate
• Why you shouldn't assume and
• Why you should communicate expectations
• How to create the right culture in your household

-Glenn Leest

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Transcript

You are listening to Intelligent Investment with Glen Lease. In today's episode, we're going to be covering part two of Glen's experiences, his business adventures, all that. And more specifically, we're going to be talking about some of my experiences with short term rentals, uh, being a landlord, even helping as a property manager.

You're not going to want to miss this episode, so a lot you can learn. Stay tuned.

Good morning. Good morning, Glen. Lease here in studio. Uh, intelligent investing. Another great episode. Um, so last, last episode, we were talking about my. My adventures in the book buying business and, uh, I didn't tell you the company name. It's called My Summertime Books. And, uh, it had the cutest logo. It was like my friend drew a picture of these, uh, mama bear reading, uh, to these two little bears.

I still have it on my frame one of these days of just a. Previous chapter of my life, but one of the other things that I did, um, Flagstaff is just a hard place to, it is a challenging place to live. Um, and a lot of times I was finding myself not being able to make ends meet with just my normal day job.

Um, I just needed more income. Even when my wife and I got married, we were still looking for side hustles, ways to make it a little bit easier to survive. And frankly, even like, maybe just save a couple bucks. So one of the ways that that kind of played out in our lives is I kind of fell into some property management roles for a friend of mine.

Um, I was actually coworkers with them for a while. And he, um, he, he had a house that he was looking to rent out him and his wife, but they just needed a bigger house. And, uh, it was time for them to rent out. And I worked with them for a while and I was also looking for a place to, to live. And I said, Hey, why don't you, uh, rent out to me?

And he goes, You know what, Glen? Um, that sounded like a great idea. How would all this work? And I said, Well, um, you know, I need my own place. I was living with my folks at the time. I, uh, had moved out when I was younger and then moved back in temporarily and then moved back out. And so this was my moving back out and, uh, it was a town home here and, uh, University Heights.

And my coworker and I came to this agreement that, um, I would be the only one in the lease and, um, I would be their go to guy. I was good for all the money. I had enough income to pay the rent, um, but I was also in charge of upkeep of the property, um, whether things needed to be fixed, painted little stuff here and there.

Obviously if it was plumbing, electrical stuff, I didn't know how to do that. But just some of the small basic upkeep. Um, I was responsible for much like a property manager, even though I was a tenant. And so, um, part of that arrangement was they gave me a little bit of a discount on the rent. I think it was like a 10% discount.

I got 10% off for managing, looking after the property, which I lived there for like eight years. And uh, I had to do a lot of painting, a lot of cleaning, a lot of, uh, I had an industrial. Shampooer that I had, that I was always borrowing from my mom. And that thing would make the carpet look amazing, um, whenever we had inspections.

So that was part of my role. But the other thing that I had negotiated was, uh, it was a four bedroom house. I said, Hey, look, tell me what you need to get every month for your rent. Um, minus whatever my 10% property management cost is. Tell me what you need to get and I will make sure you get that every month.

However, I want to be able to choose my own roommates and I want to be able to sublet. Um, and are you okay with that? And they said, You know what? We don't want to be in the business of. You know, getting roommates in every other day. We know you, Glen, We've known you for a while. We're at your wedding. You're just a good, solid guy.

We'll just, you'll be our main guy. And you know what? It's written in the contract. You can sublet, but it's on you. Um, at the end of the day, whether you have roommates or not, you're so responsible for the monthly rent. But, um, you can move in people how you, how you deem necessary and, um, go from there. So it was a four bedroom.

And so I lived in the bottom floor, which is the larger of the rooms, and then I sub-letted the three upstairs. And so the goal with that was, is that I was looking to offer an arrangement for those that wanted to live in this home, but I didn't make them sign a long term lease. Uh, they'd come in and I'd say, Hey, this is just a month to month lease.

You get the room. You can stay here as long as you want, but if life changes and you need to leave, just gimme 30 days notice. That's it. You don't, you don't need to lock in for 12 or 16 or 18 months, whatever it is. And, um, I'm not going to do a credit check. Um, I will do a character check, but I won't do a credit check.

And so, uh, all utilities included, so it's a fixed amount every month. You just know I'm paying X amount and here's the room that I'm getting. And one of the things that was important to me that I learned the hard way is, I wanted to be in the driver's seat for how the house was operated because I had had a.

Experience years ago where me and some coworkers went in and rented a house together where all three of us were on the lease. And I made some big mistakes because I didn't set ground rules, uh, as far as what we're expecting of each other. And before we knew it, there was legal narcotics in the living room from my, my roommate and they were just partying kind of crazy.

And uh, I just had to get out of that situation because I was still trying to work, still trying to live a. Respectful life. And I just wanted nothing to do with that. And so, um, but I found it hard because I couldn't just kick those roommates out. It was, they were, they had equally, you know, the right to be there.

And so I had to pretty much, um, call the landlord, break my lease and pay a, a bunch of fees to get out of there. But that was a, a steep learning curve because for the first, I think I lived in that house for a year and a half, two years. The first six months were awesome. You know, me and my roommates got along, we.

Fun. We played video games. It was just a fun place to live. Um, but after about six months, the late nights loud music and craziness were no longer fun. I was like, Man, this is, it was funny, fun for a couple months when I was younger, but I, I, you know, I got a career. I need to show up to work and I need to be well rested, and I've got, I'm going places in life.

I don't, I don't, I just can't do this. And so, um, that was something that was really challenging because I didn’t. Think that was going to happen. I didn't brace for that. And one of the other roommates moved his girlfriend in, um, and we never thought to have any ground rules for that. And she was there and she was eating all my good protein food and I was like kind of annoyed because I was like, I'm broke, I don't have hardly any money.

And yet this girl's living here for free. Not paying anything and eating my food, Ian, she's, uh, not necessarily doing anything productive. So, um, there's a lot of things I just learned with that experience and I still stay in touch with those roommates, you know, here and there. You know, they're still good people.

They just were, you know, the way they're living at the time just wasn't in line with what I was wanting to do, which is fine. Um, but just, I just learned that. So the next place when I got that, um, set up with my coworker renting from. I wanted to set some very, um, clear ground rules and actually put it into the lease.

You know, the lease agreement for renting these rooms out. I said, Hey, um, you can't just move people in, right? If you want to have guests here, stay overnight, that's fine, as long as it's reasonable. When you're not partying, I'm not going to ask you, you know, you make ask permission each time, but if someone wants to stay for more than I think, Four nights, um, more than three or four nights, they have to ask me and get written permission in advance so that way they couldn't just move people in.

So that was how I, I wrote that into the sub agreements, the sublease, um, they, they couldn't have guests there just indefinitely. Um, they could have people visit, That's fine. Boyfriend, girlfriend, whatever. You know, they can visit and stay the night. I'm not going to, you know, be a, you know, crazy about that.

But they just weren't able to move people in. I did write in the lease, no illegal drug use in the house. So that way it was just right there in the lease. And, uh, if they broke any of these terms and conditions of the lease that was automatic, it said in the lease that was ground for, um, immediate eviction, like the lease was considered broken at that time, they'd have to find a new place to live.

Um, now that was always at my discretion. Everyone there, I can always make a. The discretion of not to evict them, but I, I, I wrote in there, you know, no legal drugs and I also wrote quiet hours too. So for the most part I said, Hey, look, you know, this is a professional home. We're all trying to improve our careers.

Yeah, we're not all related, you know, we have to live with roommates. But, um, you know, after a certain hour, be mindful of your, your roommates. If we're all hanging out together and it's late, that's different. But if you're partying and playing loud music, We put in there just to be respectful of each other's, um, space.

And if the other person asked you to turn down that you'd be respectful and do so. Um, if you want to go out and party, I would just like, you know, do that outside the house, you know, go to a bar, do whatever you're going to do. But, you know, the house is kind of our sanctuary, so I put that in the lease. Um, the other thing I put in there was to, um, all the community areas needed to be kept acceptable.

Like they were presentable at all point in time. Like they were shared areas. Um, and so we needed to be mindful of that. So that included, like the bathroom, the living room, the kitchen. Um, mean a laundry room, that sort of thing. But, you know, they can keep their room however they want. I, I didn't care about that.

Um, but it's just the shared areas. They needed to keep presentable at all times. And that's how I wrote it in there. It was just presentable and messes happen and stuff, but I just, that other house I was living in, it was a chaos. It was like they would have a big old get together in the living room. It.

And the next day, you know, I'd be like, invite my little brother over for dinner. And he is like, Dude, what happened here? And I was like, I don't know man. These guys are crazy. So, um, you know, having the living areas be presentable. That was another thing. And the other one that I put in there was, it's a month to month lease and I have the option of not renewing it as well.

So that kind of helped me if I had a, a roommate that it just wasn't working out with, that I didn't have to really just give him a reason to terminate the lease. I could just say, Hey, once this month, You know, now your lease is up too and you have x amount of days to find your next place. Um, cause I, it would just auto renew the, the month lease unless I chose not to renew it.

And, and that gave me an easy out. So that way if for whatever reason I needed to kick someone out, I could. And, you know, maybe they didn't break any of the rules, but maybe something happened and they were disrespectful or it's just wasn't a good fit. I could do that and not have to find a specific reason and, and, and turn it into a.

You know, an argument back and forth. So wrote in there, the lease can be, um, you know, terminate any point in time or not renewed. And then I put in there that they had to pay first and month, uh, Security first and last month security deposits. So that way if some reason they ghosted me on the rent, um, I at least wasn't up a creek without a paddle, which actually happened at that previous house that I was with.

Um, with all those party animals, let's say, is one of them didn't pay rent that month. And you know, Didn't have my emergency fund. I wasn't like financially sound as I am today. So that actually put me in a bad spot. Cause I had to cover my rent, plus their rent and all their utilities. And it was just one of those learning curves.

I was like, man, I, how did this even happen? Why am I paying for someone else's rent? I mean, um, no one's paying for my rent. So I wrote that into the lease that they had their first and last month security deposit. And if for some reason they didn't pay rent, I, you know, that would go to cover that. And I also put in their late fees.

So, um, passed a certain day of the month. If they didn't pay their month's rent, there was just a per day late fees. That way they're, they're not going to just, you know, wait till the very last minute to, to cut the check to me. Cause I, I had to pay the landlord every month the same month, um, same day of each month.

And I couldn't be late at all. And I never was. But I put that in the lease, like, you know, a little bit of late fees. They didn't pay on time. But I could always, like I said, it was always, um, discretionary, so I could choose not to do that. Um, and that really helped and it was all written out in that agreement.

And so we actually had, when I was living in that townhouse, um, we had over 40 roommates over seven years. And so we had some roommates that were there for a long time. They loved it. It was a great place to live. And other people would be there for six months and then life would take them another direction where they, a lot of times they would graduate from college and then move on.

Um, so it was actually an amazing place to live. Um, My wife and I were married at the time, so we actually were able to make it work for quite a few years where we had roommates and were married. So go figure, that's almost like an impossible equation and having three roommates. Um, so it was, we have lots of funny stories of the roommates over the years and.

I called them shenanigan stuff that happened that we were like, really, really this, this is what's going on. And uh, even with all the due diligence, we still had a couple people that were just goofballs, kind of funny. But um, that was something that helped put the ball in my court and I could charge them a higher rate.

Per month because there was no long term lockups. Um, it was a good, clean environment and everyone else was bought into that. A lot of times I attracted professionals that were willing to pay an extra a hundred or 150 bucks a month just for sound of mind. Like they knew they didn't have to lock their stuff up, that no one's going to steal their stuff, mess with them.

There wasn't going to be craziness. And so I ended up having a lot. Um, you know, people that were career minded that would, you know, share a room. Sometimes they, maybe they're on a short term gig for three or six months and, and Flagstaff, and then they're moving back to their home area. So I had a lot of those.

Um, and so it was just a good arrangement. Um, so that was just something I learned is always have it in writing if it's something you guys agree upon, but in writing, what's the, you know, Don't just talk about it, put it down on pen and paper. I do the same thing with my clients where we have our, our investment management agreement.

Everything that we talk about are, um, our expectations for the relationship is just there in writing. So that way they know, I know they have a copy, I have a copy, we're all on the same page. And I did that with the leases. Um, and then I also obviously did background checks on them. That was something  I learned very quickly to do.

Um, and I was able to do it for free. I just go online and type in the person's name and. I had their driver's license, uh, and date of birth so I could see, you know, where they, you know, rested 50 times in Arizona. But it wasn't a perfect system cause I could only see Arizona. But at least it was better than nothing.

So that was just something I learned was just a little bit of due diligence upfront. Will save a lot of headache in the back backend because uh, it was a great place to live. I, um, ended up being able to survive there because I didn't have to pay a whole lot overall in rent because of the sublet that I did and then also because of the property management rate that I got.

So it was actually, that was some months how I survived just because my rent was so, um, So affordable after everything was said and done. So it was a lot of work though. Um, every time a roommate moved in or out, it was up to me to recruit the next roommate, find them. A lot of times I had to repaint the whole walls, patch it up, do the vacuuming.

It was a lot of work, and so it wasn't like it was a walk in the park. It was definitely a. Um, a challenge. And um, so that was just something that, um, was interesting cause I learned a lot about people during that experience. I learned a lot about expectations and how to manage those and even how to deal with conflicts.

So I'm going to take a quick break. When I come back, we're going to talk about some of the, uh, things that happened over the years and, and the bad experience and how I was able to deal with them and, uh, make it work out for everyone. So stay tuned. We're back in just a minute.

You are listening to Intelligent Investing with Glen Le. If you want to gimme a call, my number here is 9 2 8 2 2 5 2 4 7 4, or you can email me at Intelligent investing@wtwealthmanagement.com.

All right. We are backed in today's episode. Uh, we're talking about my personal experience of just having roommates and doing a little bit of property management. And, uh, just finding out how to deal with people the right way and how to, um, really just be wise, um, in that area. So with having that many roommates, I really learned that having all the expectations up front.

So when people would first take a look at the house, look at the rules, I would just fly out, say, Hey, this is the home, this is the culture. Now we don't all agree in everything, right? We had, uh, people living there that live very different lifestyles than us. And I, that's fine. That didn't bother me at all.

But it was, Hey, we're all on the same page. We're respectful of each other. We're going to have a drug free party, free home. It's just a good place to live. And, um, you know, I, I would set that expectation up front whenever new people were coming in, and a lot of people appreciated that. Some of them, they're like, This sounds great.

Where do I sign? Everything's good. I don't need to do any more due diligence. We we're all set. I, I'll give you the check now and we'll get going. Um, and then sometimes we'd have a couple people that looked around and they looked at it and, uh, they're like, Wow, you know, This maybe isn't the place for me.

I kind of like to kind of like to party and you're like, Okay, that's cool. But you know, I, I'm a little bit older now, it's just not my cup of tea. So they, they found another place to live. So I think sometimes setting the right expectation is so tremendously helpful because, um, when you, when you, we have unmet expectations, sometimes that can turn into resentment.

Um, so just make sure that you're communicating and communication builds trust. So, The more you communicate, the more you talk about things and you're on the same page, it's just going to save you a lot of, a lot of heartache. So that was one thing. The other thing we had is we had to evict a roommate one point in time, uh, cause he just wasn't paying.

And uh, that was no fun. Um, I should have saw a warning signs when. He moved into the room and they had no possessions and they just had, they're borrowing my blow up mattress for a year. That should have been the tall tale sign that something was up and they had a job. They worked, but they just spent every dollar they had.

And, um, I think this person really liked to buy ties and snappy shoes and dress pants. So it was funny because they had no bed, no possessions, but they had amazing clothes and, uh, didn't pay rent. And so we had even. Kicked that roommate out just because he wasn't paying. And uh, you know, the first time he was like, Okay, something happened.

I couldn't pay the rent on time. Just go ahead and use that security deposit to pay for this month and I'll keep caught back up. And then after a while it was just the same, same old thing. And so we eventually had to part ways and, uh, still on good terms, but. It's just one of those things that if you're, if you're looking to do a business arrangement, is just make sure that it's a business arrangement.

Um, it's okay to do business with a family. That's never an issue for me. It's just upfront to make sure you overly communicate the expectations. That way no one's got hurt feeling. So, for example, um, right now my, my dad and I are working on a project at my, um, the house behind me. Were doing a renovation and, um, we set the expectations.

Here's. The expectation for the work that you do. Um, you know, the compensation, all that. And so no one's got hurt feelings. It's not like there's these unmet expectations because they thought it was this way and we didn't really talk about it. And it actually turned out to be the other way. No, we just all on the same page from the beginning, just very, very clear with talking about expectations.

So, um, that, that whole. Having lots of roommates, moving people in and out, really taught me a lot about the importance of having things in writing, setting expectations, Ian uh, planning for the worst case scenario. That's unfortunately something I think we all have to do is we don't, We like to think the best of people in the best of situations, but it's always.

Probably a pretty good idea to at least have a game plan, a backup plan. If things don't go according to how they think they're going to go, What's the exit plan? How do we unwind this? How do we make changes or be able to get back to where we were so that way we're not, you know, really hugely impacted by that.

And so, same thing with, um, you know, we do the same thing in, in investment world too, as we come in and we look at, here's the game plan, but what happens if things don't go according to plan? How are we going to react to that? And do we have a plan B? So that way we don't have to make rash decisions or be stuck in a situation that is not favorable.

So it's just really important on the front end to do a lot of research, make sure you do due diligence and have some wisdom and just common sense about things. And uh, so yeah, those are my experiences of renting to roommates. Um, Thankfully, I don't have any roommates except for my kiddos and my wife. Um, so those days are long gone, but it was, uh, quite the adventure.

And, uh, when my wife and Fir and I were first married, we, uh, we were doing all sorts of things. We were selling the books, we were doing the, um, you know, property management, land lording, whatever you want to call that at our house. Uh, and then doing the rental stuff, um, for the rooms. And then we were also doing a lot of couponing too.

Um, that, that was a very fun adventure, which. Yeah, I kind of tied that into my book business is that we would find coupons for items that were, you know, on sale. And when you doubled it up and did the coupon, you might be able to find an item for almost next to nothing. And then we would go and buy a block of couple hundred of those items and then we would ship them out and sell them on, uh, on Amazon.

So that was actually kind of a fun little adventure. Um, couple times I bought. The most random things at, um, at the store, it was like these kitty treats, because I had like a hundred coupons that I had gotten, and I could buy a hundred kitty treats and the little pouches of the whiskers, and it was like 50 cents per pouch or something like that.

But they sold for like $5 or $4, something like that. So I was then able to get them real cheap with the couponing. And then sell them online. Um, or sometimes it was just items around the house, um, whether that be like toothpaste or shampoo or toilet paper. We were just doing a ton of that. And so when people hear, they're like, Wait, you guys are couponing?

You're like, Yeah. Like, Well, where'd you find all the coupons? You're like, Wow. You know, there's dumpsters. They're like, What? You guys dumpster dive? You're like, Wow. Sometimes you had to do what you have to do to survive. And so those were kind of fun days. Um, I think my wife was still like, Nine months, eight months pregnant with our, our oldest daughter when she was still hopping into dumpsters, helping me find coupons.

And so just a another time of our, our story when things were very tight. So, um, I get it. I've been there. I've, I've been at a point in my life where I had not even two nickels to rub together. So I know whole heart it is to earn money and to make money and, um, I get it. But is this someone that is, is coming from a non-finance background of just having to work hard for everything they.

And so, um, the, the couponing is something we did. We also did a lot of house cleaning, um, that was, uh, a royal, uh, royal treat. And so we'd go and clean houses for like, uh, like a VRBO or something like that. They would, after the guests had checked out, my wife and I would go and clean the house, um, and we'd get paid cash.

And a lot of times I'd do that in the evening. Work around the book schedule, work around everything else, work around my day job. And so we were always hustling, trying to find some sort of hide side hustle to just augment our income. And for a while we just kind of had odds and ends income coming in.

And uh, but we made it work. And, uh, sometimes we would save up those, those, uh, funds and use them to reinvest in the next thing. Like a lot of times I was, um, Doing these side hustles. And at the time I was investing into this business here where I was investing in my education, investing into software systems, tools, um, you know, learning.

I take a lot of exams to get into this industry. Um, a lot of travel. I traveled a. Lot my first couple years to just be around people that really knew what they were doing in this industry. So, um, all those side hustles seemed to work out. Um, sometimes I'll, I'll tell people, like my friends that have known me for a long time, they knew the, uh, the poor Glen when he didn't have anything.

And, uh, you know, they go over to his house and his apartment didn't, uh, didn't have anything fancy in, in, he just had rice and beans. He was eating for like weeks on. So anyway, so for, for clients that come in and have had to work hard and struggle, and, uh, I get it. I've been there and I know exactly what it's like and, uh, keep, keep hope because if you keep plugging away and keep, uh, doing the right thing, eventually success will follow.

So with that, I hope you enjoy today's episode, talking about some of my experiences, um, you know, Helping manage, you know, my, my home and, uh, the, the rooms and the rentals and real and uh, and just, uh, doing that with, uh, the roommates. It was just a lot of fun. So it was With that, hope you enjoyed today's episode.

Make sure to tune into all my other episodes. This was just kind of a bonus content so you can get to learn a little bit more about Glen Lease as an investment advisor. His, uh, his previous, uh, experiences and what makes him who he is today. So with that, signing off another episode, Intelligent.

Hey, thanks for tuning into my episode today. Hope you enjoyed that. If you haven't already, please make sure you check out all of my other episodes, lots of content. Real estate portfolio management. We have, I've had one of the largest crypto fund managers in the world here in my office, interviewing them.

Um, you're also checking out on social media, um, just typing Investment advisor or type in Glen Lease investment advisor, intelligent investing. I'll show up on Facebook, all your favorite social media platforms. Uh, with that, you know where to find me, 9 2 8 2 2 5 2 4 7 4. Or you can email me at Intelligent investing@wtwealthmanagement.com.