10 Things You NEED as a DIY Landlord (Self-Managing Rentals)

Planning to self-manage your rental propertiesBeing a landlord sounds simple. Until you’re the one getting the 2:00 AM call about a leaking toilet or worse, you have no idea who to call to fix it. That’s when you realize this isn’t just about owning rental property, it’s about having the right systems, tools and backup in place so you don’t lose your sanity along the way.And here’s the thing, most rookies think managing a rental yourself just means collecting rent and maybe mowing the lawn. But there’s an entire set of essentials that separate the landlords who burnout from the ones who actually scale and succeed as real estate investors. And today we’re breaking down 10 things every DIY landlord needs in their toolbox.This is the Real Estate Rookie podcast. And I’m Ashley Kehr.And I’m Tony j Robinson. And with that, let’s jump into DIY tool number one.The first one is property management software. And I feel like this can go with any strategy that you’re doing as some kind of software to track your property and to communicate long-term rentals, short-term rentals, midterm rentals, house hacks, rent by the rooms, all of the rentals strategies you need, some kind of property management software. So when I started investing, well before I even started investing, I worked for an apartment complex and this was their system. It was a sheet of paper with drawn out grid lines, the month, the tenant’s name, and then a check mark if they actually made payment or not. And that was how they tracked the rent. This was for a 40 unit apartment complex, so you don’t want to have to do that because it was so aggravating and it took me a long time to actually get a system in place, but I found a property management software. I started implementing it and it saved so much time, but also created so much accuracy. Can you imagine if a tenant came in and said, I paid rent, and I say, no, you didn’t. And then I show them that grid line thing that says, see, there’s no check mark here. You didn’t pay rent.It’s crazy to me to think that in the day and age we live in that folks are still using pen and paper guys. I get pushback sometimes from folks who are new investors like, okay, do I really need that? And I think for this software where the cost is pretty nominal, the value that you get far exceeds the cost of that subscription. And not only do you get prebuilt tools that are purpose-built for your asset class for managing your property, but to Ashley’s point, you get records that are rock solid if you ever need to fall back on them. Some of the ways that we use property management software in the short term rental space, we use it for a lot, honestly. We use it for guest communication. So we’re on multiple different platforms and especially for the hotel. For the hotel, we’re on websites I’ve never even heard of before sometimes.And instead of having to log into all of these different platforms separately, we’re able to communicate with everyone through one unified inbox within our PMS. So it takes in all the metrics from these different platforms and gives us one unified inbox to communicate with. We can even send SMS email platform messages all through our PMS software. So guest communication is a big one for us. Vendor management is another reason that we leverage property management software. We can, and we have a separate piece of software now specifically for maintenance, but when we first started we were using our PMS for that and our cleaners would get notified if there was a turn that needs to be happened and they could flag issues during their turn if they noticed something was broken. So it’s our maintenance and our cleans inventory can be managed through there. Another big one for us is managing our calendars. If someone books on Airbnb, we have to block that data on VRBO and without a PMS, we would be doing that manually. I mean the list just goes on and on and on and on and on and on about the different things that a good property management software can do for short-term midterm rentals.So I guess let’s maybe go over some of our favorite ones of these. The show is sponsored in no way by any of these. So these are just Tony and I telling you software that we have used or that we’ve heard other people have used that have had a great experience. And at least for the long-term rental side, I’ve used several different ones over the course of the time, but my favorite ones, if you have a large amount of properties, these only make sense at a large scale because they’re minimum to actually have the software is like $400 per month, and if you have one or two units that will kill your cashflow, it’s not worth it. But that’s AppFolio and buildium. So as you grow and scale, even if you get to maybe 50 units, just the bells and whistles that they have could be worth it for you.But the basics, I like Rent Ready and I like Turbo tenant. They have the basic necessities that you need, the things you need, and then there’s extra little things that you can add on here and there. Turbo Tenant I really like because they have a lease audit, you can upload your lease agreement and they’ll tell you based on your state what things that you should change or not or what things you should include based on your state’s laws and regulations. So I really like that piece of it too. And then for midterm rentals, I’ve just used that through my short-term rental database because I know that Furnish Finder has something that they’re starting to build out. I don’t know exactly how full their capabilities are. I think maybe rent collection, but I’ve always just used short-term rental software for my midterm rentals. But I do know that some people do use long-term rental for the midterm rentals too, especially if they are sending out an actual lease agreement and not booking through Airbnb or something like that.Yeah, I think for us, some of the big names come up. Hospitable is one that we use virtually from the beginning of building out our portfolio. We use Guestie now, especially for the hotel and just it has some functionality. I think that works better for properties or portfolios that are scaling. Kind of like you mentioned Buildium and AppFolio versus Turbo Tin and Rent Ready. I think Guesty is really good if you’re kind of getting to scale or if you’re a short-term rental property manager, if you’re a co-host. I think Gusy has a lot of features that make it good for folks who have slightly larger portfolios. Hospitable is a little less expensive, a little less features. Gusy is a little bit more expensive with a little more features, so you can kind pick and choose where you want to land there, but both are pretty plug and play, I think easy to use at the bat.And then I use hostly for mine. I’ve never even demoed or tried any other one that was just the person who was managing my properties, which she wanted to use. So we’ve just stuck with that and it’s been fine. What about the maintenance side of things, Tony? You mentioned that integrating with your property management software.Yeah, so when we first started we were using our property management system as a quasi maintenance kind of cleaning database. But now with just the size of the portfolio, we use a separate piece of software called Breezeway, and Breezeway is our kind of back of house operations for cleaning tasks, cleaning checklists, inventory maintenance. So breezeway is what we use and it works incredibly well.I’ve just started setting up Turo, so that’s one that integrates with hostfully and came highly recommended to me. I’m not fully set up in IT and operating it, but stay tuned. I’ll let you guys know how that goes. But it seems like that’s something similar to what you’re using.Yeah, very similar turn. Kind of started off as a marketplace to help folks find cleaners, but they’ve I think added some software behind that service to improve what they have. Well, what about flipping Ash? Have you used any software for flipping?No, just on a project management board to manage the project and manage the contractors. But I know there’s different software that you can use to actually send out the estimates. And our friend Tyler Madden who does house flipping every day at the end of the day, they send an update to the owner. So they’re using some software. I think his Instagram is at Tyler Madden, just his name, but you could message him and ask, but I am pretty sure it’s like they, it’s a software where they’re going through and for when they remodel home so that they can show their customer at the end of the day what the progress is, what was done, and each day the person’s getting an update with the photos and things like that. So if you’re flipping, you could probably use the same thing where your contractors uploading the photos to you, sending you the progress, any notes, any updates, things like that I think would be a good way to communicate and track your flip.I think about the more experienced flippers that we know, James Tanner, tar Yarber, both of them were using Excel spreadsheets at least for their scope of work. I think it’s interesting that we’ve got all this software that’s evolved for the rentals space, but maybe not as much for flipping. Even wholesalers, there’s so many CRMs that are out there for wholesalers or people doing a lot of direct mail marketing to find off market deals, but it seems like flippers for whatever reason, have been kind of left in the dust. There was one piece of software that I had heard of that we had tested out briefly called Flipper Force. Have you ever heard of that one?No.Yeah, it was kind of like a scope work type thing, but we ended up just going back to an Excel sheet, so we got to find a good solution. So if you’re a flipper out there and there is a piece of software that you use for scope of work or project management, let us know because love to highlight it here for folks who are looking to flip.Yeah, the only one I’ve heard of is trend, but I think that’s to build out the scope of work and then you send the estimate, but I don’t know any other capabilities outside of that besides building the scope of work and sending out the estimate and I don’t think anything to actually track the progress of it. Okay. So the next thing kind of goes in line with that is having a reliable vendor list. So we’re going to get into project management software later in this episode, but one thing that I keep in there is I track all of our vendors. So that’s vendors that we’ve used, their contact information, if we used them, what the outcome was, are we using them Again, a list of contractors referred to us who we want to use, and then a list of contractors where it’s literally their truck was driving by and we took a picture of their truck and entered their information because it said the painting shop and their information on there is to, here’s some contractors we can go to if we’re in a crunch or we want someone else to bid something out, we keep.So those kind of three separate lists. And we always have our preferred vendor, so all of our plumbing issues, our HVAC issues go to this one company called BNR and BNR gets all of our stuff and they give us good pricing. They also are super efficient at scheduling with tenants and also being there making us a priority because we do send them so much business. So not only having that vendor list of who you can contact, but really establishing those relationships too with those vendors.Ash, our process is almost exactly the same as yours, [email protected], which we will talk about later. But Sam, we have a section inside of Monday broken out by market and within each market we have our service providers and it shows like, hey, who’s the person? What’s their service contact information? And same, we have our go-tos where it’s like if something happens, our VAs know to call this person first. If that person doesn’t answer, then it goes to the next person and we just work our way down the list of all of our approved vendors and sometimes something pops up that maybe we need to find someone new or maybe our usual crew of folks don’t have the skillset to tackle whatever issue just came up. And then we’ll go out there and we’ll source someone new and if we like them, then we add them to the board.So yeah, I think it takes some time to build it out initially, but searching Google Facebook groups recommendations I think is probably the best way to build that out. If you can find other investors in your market who already have trusted contacts, I think people are much more willing to share their plumber and their HVAC person than maybe they are to share their wholesaler. They might have a little bit more hesitation to share the persons giving them all their good deals, but all their trades folks, typically people are willing and open to share those because me as one person, I’m not going to keep a plumber busy at 40 hours a week, right? They got to fill that time with some other folks. So I think getting referrals is the best way to start building that list out.And two, the whole point of this is so that when you need one of them, you are not panicking trying to find someone. Some other little things you can add is who is 24 7? Are some of the plumbers 24 7 are some only available nine to five during the week? The appliance vendor we use, they are very mom and pop. They are amazing, but it’s like you call their house phone to schedule, so if they’re not home, you’re leaving a message and they’re not working on weekends and things like that. So adding in those things too. So okay, this is not who I should be calling at this time, but that’s the big thing is you have the list already and you can even go as far as calling them, letting them know you have this property and you’re just get some quotes from them, get some pricing as to do you even service this area?Do you come to here? I’ve had contractors literally in the next town and they’ll be like, no, we have so much business where we are. We don’t even drive that little bit extra to go there. So I think just having an initial phone call can go a long way too as to figuring out what their service capabilities are, what are they charge for? Some of the standard things you would need can go a long way too. And then just keeping those notes and tracking everything and you don’t really need a project management board to do this. You can do this in Google Sheets, Excel to track all of this. It’s just like the reason I do it is because when I actually do build out those boards, I’m actually connecting the vendor and their contact information as to like, okay, this is who I get this estimate from. And then like, okay, this is the vendor that’s actually doing that, but you can absolutely just do this on a spreadsheet.I think just the last thing, I know we’re talking more so about keeping a database of these folks, but just word of advice when it comes to working with them. Sometimes I think it makes sense even if you overpay a little bit just to go back to that person that’s more consistent for you because they’ll remember that. And it’s like we’ve gotten, I think about one of our crews we work with in JT and there’s been plenty of things that he’s done for us that that team has done for us where we know that they maybe didn’t even charge us for some of the things they’ve gone up there and fixed. They’re like, it was such an easy thing. I was only here for five minutes. I’m going to charge you. So when we get an invoice for something else that we feel is like, man, that kind of feels like a lot, we are okay with that because we know that net overall, it’s still a positive win-win for both sides. I think sometimes we can get so bogged down on the pennies and nickels and dimes that we maybe damage relationships that are worth far more than that. So just word of advice for rookies is value the relationship over maybe the small dollars and cents that you’re charging.And that not only goes with the vendor too, but that also goes with your tenant or the guests that you have staying in your Airbnb. The more efficient, the convenience of getting that person there, even if they are more expensive or whatever, you are pleasing all sides of that triangle. So don’t ruin the relationship with your tenant or the guest or give them a bad experience with you as a landlord or the host because you are trying to nickel and dime the contractor to have them go out and fix this issue so they can stay. So it’s a ripple effect almost. Okay, so we have to take a short add break. We’ve gone over two different tools you need and when we come back, we’ll touch on communication and how this is key to your business. We’ll be right back. Okay, welcome back. The third thing that you need in your tool belt is a contact number that is not your personal cell phone number.So not only for reasons of having people blow up your phone, people call you to complain whatever reason, but also for the fact that at some point in time you are not available, you don’t have to physically hand your cell phone to someone to take your calls or you don’t have to forward your cell number to somebody else where they’re getting all of your calls. So my recommendation for this is a Google Voice number and you can set them up for, unless you’re doing crazy amount of calls, it’s free to do with your Gmail account. So this is what I did from the beginning. Well, I shouldn’t say that. Not from the beginning. At first I had two cell phones, I got two phones and that was just crazy. That was too much for me. So then I went to using Google Voice. So that is the dedicated number. You get a separate number and that is the one you can give out to your tenants, you can give out to your vendors, you can give out to whoever. I just did online forums to get my insurance quoted just to see what it would be. And I gave out my Google Voice number, like I’ve had this done before where I accidentally put my phone number into some spam thing where they’re selling my phone number to $50,000, 50,000 insurance companies. So this is what I highly recommend.That’s actually a really good idea because even when you apply for a loan sometimes, then you get blown up by everyone on the planet who wants to give you a loan. So I like the idea of putting a Google Voice number for that too. That’s smart.Or buying a website domain. Oh, I forgot the one time, time of all the domains I forgot. Or I bought to check the little mark that I want the security thing where my information isn’t sold out. Oh my God, this was over a year ago and I’m still getting phone calls. Are you the owner of blah, blah, blah? And I just say, no, I don’t even know what that is. But yeah, one time I did it. But anyways, you need to have some kind of to manage your properties, some way to reach you, like a tenant to be able to call you. Yes, the property management software has the texting communication that you have, email, there’s so many other ways. And in my lease agreement, I list the preferred ways and phone call is the very, very last way. But sometimes there is the tenant that prefers to call. There is a reason for them to actually call and not message, and they can text through the Google Voice too. But I like to keep that within the property management software. Tony, what about for short-term rentals? I’ve probably had a guest maybe call me twice the whole time I’ve been renting Airbnbs.I mean, we definitely get phone calls. I think with the size of the portfolio, it’s bound to happen where we get at least a couple a day. And Sam, we use Google Voice also. We try and keep the majority of our communication on platform, but Sam, we get sometimes good guests that are older that they just want to pick up the phone and call someone, especially at the hotel. I feel like the hotel is probably the biggest culprit of this right now. But we actually explored, and I might end up going back to it, but a software provider called Open Phone and similar to Google Voice, but they’ve just got, it’s purposely built specifically for online phone or voiceover internet, I dunno what it’s called, but they have a little bit more robust features around call routing. So for example, right now when I get a call on my Google Voice, it just rings everyone’s phone at the same time.So I get my phone ring, Sarah’s phones ring, our VA’s phones ring, but with open phone it can route to the VA’s first and then if they don’t pick up, it’ll route to us. Or if there are certain days and times, maybe our VA’s off, it won’t even ring them, it’ll just go straight to us. So we’re exploring open phone right now. I had a free trial, but I let it lapse. But I like some of what it offered, but I think especially if you’ve got other people on your team, I have VAs that work for me. Ash, I know you do as well. And I think that’s where the Google voice or open phone really comes into play because otherwise it becomes really difficult for them to be able to fully take on all of the responsibilities if they can’t text, if they can’t call, if they can’t communicate with folks who are here stateside. So definitely a tool that I think every DIY landlord have,And I like the fact that you can oversee it so you’re able to log into the Google Voice. And even if you don’t, I haven’t had it come to one of the numbers we use. I haven’t had it come to my phone in a long time. It goes right to the va. But I still can log in and I can still look what are the incoming calls, which ones are being answered, which ones aren’t, how many voicemails are there? Are the voicemail numbers being called back the next morning in a timely manner? What are the text messages saying? So I really like that oversight too of it.And there’s one of the things here that Open phone has that I don’t think Google Voice has, but you can actually listen to the calls. So they’re like, Hey, this call has been recorded for training in security, whatever. And then you can always go back and listen to those calls and then you can give your team feedback. So that’s one thing that Google Voice doesn’t have that also I think pulls us into open phone potentially.My God, we could get some good content from some of those phone calls.Yeah, we probably would.Okay, so the next thing we’re going to talk about is I am so passionate about this because this has been one of the things that has literally changed my life for the better, and that is having a virtual mailbox. I used to be sitting in my living room with mail spread all around me, and at this time I had a million things going on, so it was okay, first I open it, then I sort it by each LLC or whatever it has to do with, then I start with one LLC, and then I’m sorting it as to, okay, is this a bill? Is this something to be filed, something to be shredded, sorting it that way. Then I’m writing out the physical checks, I’m putting it with the return piece of paper. I’m putting it into the mail, I’m sending it. This took up so much of my time.So then I hired someone to actually do it for me in person, and then I was paying a bunch of money for somebody just to open the mail and sort it and then to, I would have them get the checks ready and then I would sign them and actually close the envelope and mail them out. So with a virtual mailbox, all of your mail is sent to an address and you can find locations all over the us. This doesn’t mean that it’s going to the Philippines or anything that you can put it to a location. The closest one to me was like 20 minutes away, but I live in the middle of nowhere. So I set that as my address. So all of my mail gets sent to there. And then it’s also, I think nice too for my tenants that they’re sending it to my checks to a local address too instead of there’s not some random place.So all the mail goes to there when they receive the mail, they scan the envelope, the outside of the envelope, and I get a picture of it. It’s like a portal. I can go into the dashboard, see what mail came in for the day, and then I can select which things I want them to open, which things I want them to throw out to shred and which things I want forwarded to me where they’ll actually send it to my home address and I can get it. So I still have four tenants that send in physical checks. And so every month, once their checks come in, I take it from the virtual mailbox and I have it forwarded to my house. I get it at my house, I write my deposit slip, I go and deposit it. So then all the bills they’re scanned in and I can just drag them into whatever Google Drive folder they need to go in, I can handle it.And eventually I built out a spreadsheet where a VA is going and looking at the mail and saying, okay, it’s a bank statement, so it gets filed here. And I just tracked it all as if this is that, then it goes here, whatever. Then any questions, they just forward it to my email and say, Hey, I’m not sure what to do with this, whatever. But this has been such a game changer for me, and it was very cost effective. I have to say it was cheaper than hiring someone to come and open the mail. But there’s a lot of different ones I use post scan mail, but there’s a whole bunch of different virtual mailboxes and they have different features that they do with it. The reason I chose this one is because they let you have a larger amount of LLCs or companies sent to the same mailbox without having to pay a ton of fees extra to have more sent in one mailbox, and instead of opening two mailboxes,This is one thing that I’ve not done, and I’m not sure why because I also hate mail. It’s like the bane of my existence, I feel like. And our process right now, and it sucks because we’ve had so many different processes, but we had just our home address at first, which was the worst. Sarah and I are so bad at checking our mail that it probably happens maybe four times a year where our mailbox gets so full that we have to, they just empty out the mailbox and take it back to the post office and we have to go to the post office to pick it up. So we’re like, okay, that’s not a good choice for all of our business mail. So then we got a local, it’s like a UPS store around the corner from our house. So we got a mailbox there, but then you got to drive to that mailbox to go check it.So it was kind of the same issue, but once we got the office, there’s a mailbox here at the office. So now we just send most of our business mail here, and the process for me is I’ll check that mailbox and Sam, I’ll try and sort it out, and then if it’s something that I need to do, I’ll set it to the side, something that my assistant can do, I’ll just take a picture and send it to her. So we’ve kind of got a process right now, but I definitely, the idea of having someone that’s just dedicated to the mail, and I wish so badly that my assistant lived here in California, but she’s in Texas because if she was here, she could just handle that for me. So right nowIt’s just, well, that’s the thing with the virtual mail is you can be anywhere and you can do it. It’s in your mail.And that’s why, I don’t know why we haven’t done this yet. It’s just been on the to-do list. So I’m committing now to all the folks in the rookie podcast that Tony’s going to get a virtual mailbox set up because it’s just like ballpark ash, what should someone expect to pay for a virtual mailbox?I think your standard is $300 for the year, and then it goes to, but I also have probably the premium thing or whatever, I have a bunch of LLCs, but it also varies on how much mail you’re getting. So if you request for them to scan and open 500 pieces of mail, you’re going to charge extra than if you have just, there’s limits of you get a hundred free pieces of mail scanned each month or whatever. But yeah, I think it’s like $300 per the year, whatever my plan is.Yeah, so like 25 bucks a month or something paidLike a PO bucks is,Yeah, that’s how we spent probably, I don’t know if it was 300 for the year, I think it might’ve been like 200, but they weren’t scanning anything.And with the post office, you can get them to scan your envelopes in, there is a app you can sign up for because I had a PO box prior to this, and I had, it’s just [email protected], their website or whatever their website is that you can sign up to have them scan your mail in. And it’s not even them, it’s just the envelope though. You’re not getting your open mail scanned. So then you get anxiety of like, oh my God, what is this envelope? Blah, blah, blah, and think it’s some horrible lawsuit or thing coming in. And it’s just like you got a $6 check from National Fuel return to you. BecauseWe actually do have that for our primary residents where I can see the outside of the envelopes, but our mailbox that we had was UPS. So they didn’t offer the virtual kind of service like that. Or maybe they do. I don’t know. Maybe I never even asked. So maybe it’s something they offer,But still it’s not like you’re seeing the inside of it, so you’re not seeing what you have to actually do for it. Yeah.Alright, well, here it is. Tony’s committing to getting a virtual mailbox. We’ll set it up.And just so everyone is listening, I’ve literally been telling Tony about this for two years because I saw the picture that Sarah had posted of him covered in a pile of mail around him, and that’s what I used to look like. Okay, so the next thing is organized file storage. So this kind of goes hand in hand. Once you get a document, what do you do with it? And instead of having your shoebox full of receipts or having a stack of papers on your desk, I used to use folders. I would put everything into folders. So I had a folder. I had a section for each LLC one folder for receipts for that year, just for that year. One thing for tenant leases, one thing for capital improvements, bank statements, things like that. I used to do that. And then I went to doing a binder where I’d have a binder and I’d actually hole punch each thing and put it into the binder.So it’s separated by each bank account, the bank statements and things like that. But now I just strictly use Google Drive storage. The only thing that I have that’s paper and physical that’s sitting right next to me now are my title of abstracts that I don’t know how to scan them in because they just come with this paperclip thing. And some of them are so old that I’m pretty sure if I tried to scan them, it would just shred the paper through my scanner. But, and then I have some surveys that they are scanned in, but I also have the physical copies. And then my checkbooks, I have physical checkbooks for every LLC. I don’t know if people still do that nowadays that I still do. I have them, and I do use them sometimes, but that is the only thing. Everything else is getting organized and scanned in to my Google Drive. So that’s receipts, that’s any kind of documents that come in, even if it’s something that I think I may never need again, and maybe it’s just a notice of something. I still just have a random folder inside of each LLC where I’m just throwing that in because it’s all scanned in for me anyways. It’s not an extra step for me. So it’s just literally drag and drop.Same for us. We set ours up. You said you had a folder for bank statements, et cetera, et cetera. We do ours by the entity and by the property. Usually we’ll have one folder for that property and then all of the things associated with that property for that.That’s on mine notes too.Okay. Yeah, yeah, right. It’s the same thing. And then for a lot of the things too, it’ll exist inside of Google Drive, but a lot of times we’ll access it through Monday again, which we’ll talk about a little bit later. But Google Drive is just a place where we can make sure that we have our own copy of that. Because I think the downside of only keeping your files inside of your property management or your project management software, either one really? Yeah, either one, right? If you switch, well, there goes all of your data. It’s like you’ve got to figure out a way to get it all out. So we try and keep everything inside of Google Drive from a storage perspective, and then we just link to the file from Google Drive inside of our project management software.Yeah, I completely agree with that. I had to have our VA transfer from one property management software to another, and she had to manually go in and download because we had put every receipt in there because there’s the one we were using. It had a bill pay option in there and manually go through and download every receipt or all of those. So now we actually do it double. So we’re putting it into the software that we pay our bills in. We’re putting lease agreements in the property management software, and we’re saving everything to Google Drive. It takes, I don’t know, like five seconds longer to do it double just because the storing of the files is so easy. We just have a spreadsheet with the quick links to here’s the most common Google Drive storage folders you’ll use. And it’s just like you hit the link, you drag drop, hit the link drag and drop for whatever it is.So it doesn’t take up much time. But one thing I will say too is along with your receipts for your bookkeeping, you’re going to want to have closing statements organized on your properties if you sold them, if you bought them surveys for your properties, but also your LLC information if you have an LLC or if you have a corporation having all of that information in one place. And then think about things that your lender asks for when doing bank financing, because those, I used to be unorganized as to where it would take me forever to find what I needed for the loan officer for each property, my property taxes for each property. I was literally just throwing the receipts into a folder labeled 2025 receipts. And I would have to dig through all of ’em to find all the receipts where my property taxes that they were paid because they wanted paid receipts.And a lot of times you can find them online now, but think about those things too and maybe create some kind of sheet that has the quick links to be able to access those also. Okay, our next thing here is number six and is the unit information sheet. So this is where you are going to keep all of your records, and you could do this just in a document, and we actually have one for you guys at biggerpockets.com/rookie resource. And you can get the unit information sheet there, but you could put this into your project management board like monday.com. You can just have this in Excel spreadsheet. It could be a Word document even, but it is everything that you need to know about your property. You may never use some of it, but it is some of things that if you do need to tell somebody, this information makes it so much easier than trying to figure it out, especially as you accumulate a couple properties, they kind of blend together.And if you’ve rented them out, when’s the last time you’ve ever been at one of these properties? So I think Tony’s a great example of this, okay? He buys a property in the Smoky Mountains. He goes there when he first purchases it, and then it’s been guesting there for the last two years. Now there’s a vendor there that’s asking where is the water shut off for the property? And they can’t continue forward until they know where the water shutoff is, or a guest is staying there and there’s water shooting out of the wall. Where is the water shutoff? So that’s always my favorite example because I’ve also learned from experience that that’s something I want my tenants to know where that is so that it doesn’t prevent further damage. But just things like that, having all of this stuff listed out. So you have just a one pager, this little cheat sheet that you can use if needed. And you can also give out to anybody on your team if they get asked these questions about the property.I was looking through our property trackers, what we call it as you were given your initial response ash, and we have a lot of the information that you talked about. We have all of the documents around the purchase of the property, so our purchase price, the escrow company that we used, our settlement statement, our closing disclosure, our initial insurance. We have our short-term rental permit the day it expires, our parcel number, which Airbnb profile that’s under the bedrooms, the bathrooms, the square footage. We have all of our utilities information. We have video walkthroughs of both the interior and the exterior, the location of things like the electrical panel, the propane tanks. So just all the things that you would potentially need, especially if you’re running this property remotely. So you can quickly remember, oh man, where is the lockbox on that property? Oh, cool. Here’s a video of where we put the lockbox, right? So it sounds like a lot. We even have trash day. What do the trash cans need to get taken out that’s important for short-term rentals? So I think as you’re putting your property, as you’re kind of setting it up, spending some time there to just go through with a super fine tooth comb and think, what is all the information that I may need if I were a thousand miles away to still be able to manage this property effectively? You put all of that into one location and it makes managing it so much easier.So as we’ve learned a little organization upfront, saves you hours of headaches later, and when we come back, we’ll get into lowering your risk and protecting your investment. We’ll be right back. Okay. Welcome back from our short break. Thank you for taking the time to check out our show sponsors. So we are on to number seven, your emergency fund. So these are also called your reserves, setting aside money for repairs and vacancies and other unexpected costs that can come up. So what I do is I keep money in a high yield interest savings account. I use Base Lane, and I’ve also used Wealthfront too. Those are two that have really great interest rates right now. They’re online banks or whatever, so easy to access things like that. If you need ’em, you can just easily transfer right back into whatever account you need it into to go ahead and cover that transaction.But I think a big rookie mistake is treating all of the projected cashflow as profits because you should be saving that for reserves if you don’t have already a big meaty reserves account that you’re starting your purchase with. I think the best way to take this is to have three to six months of reserves in place when you purchase the property, but sometimes that’s not always feasible. Plus, if you use those reserves, you have to replenish it and there goes your cashflow for several months or whatever long it may take to actually fill that up. So Tony, what are you doing with your reserves? Are you keeping ’em in a high yield interest savings account too?So we use Relay as our business bank, and I don’t know if it’s a traditional high yield savings account, but they do offer, I think right now it’s like three and a half percent, whereas maybe super high yield would be like four, somewhere above four.Four,Yeah, it’s not a huge difference. But yeah, we have a separate reserves account for each property. And the reason we do it on a per property basis, just again, we have a lot of partners on our deals, so I can’t use the reserves from partnership A to cover something that happens on partnership B. So we keep a separate reserves account for each property. One of the things though, Ash, that I think we discovered as our portfolio has matured a little bit is that in addition to reserves, one of the things that a good short-term rental portfolio needs is just like a reinvestment fund because you also want to have money set aside for continuing to improve your property’s performance. And sometimes that’s small things like, I dunno, buying a new gaming console, we went through this phase, we bought a bunch of Nintendo switches for our properties, or it could be something bigger, maybe we want to install, you want to redesign your game room, or maybe you want to add a new amenity like Asana, or maybe you want to add mini golf or you want to do something. But I think setting some money aside on a monthly basis as well is strictly for reinvestment is something that more short-term rental host should be doing as well.That is a great idea. And we haven’t been touching our short-term rental income at all in the past year. I think over a year we haven’t touched it, and we’ve kind of just been saving it in there for that purpose of reinvesting. But I’ve never thought of it that way of just instead of thinking like, oh, okay, next year I want to do some improvements, let’s start saving this year is just on a continuous basis, putting that money away aside to continuously improve your property, which is going to hopefully continuously increase your nightly rateOr at least allow you to continue to compete. And just really the idea that initially came from, again, Sarah and I, there’s this resort in Cancun that we’d like to go to, and every time that we go, they’re just always doing something. And sometimes it’s small things like they’re replanting plants or they’re repainting the handrail and this is a place that’s generally in really good shape already, but they’re just always doing little things to keep it that way. And that was an eyeopening experience for us. It’s like, well man, we did all this work to set these things up, but we have to continue to reinvest to keep them performing.Okay, let’s move on to number eight, insurance and legal protection. So Tony and I actually did a rookie reply episode on this recently about insurance cost rising and what kind of insurance you need on your property. And let’s just state the fact here that especially if you are renting out your primary residence or you’re not being upfront with your mortgage or your insurance broker that this is a rental property, a homeowner’s policy is not the same as a landlord policy, it is completely different coverage. So the first thing is to make sure that you have the correct policy in place and ask your agent or broker to spend the time going through your policy with you. Don’t just take what they send you and say, here’s the quote. Actually have them walk you through what is covered, what could happen, your deductible, what’s your deductible. So I think really understanding your policy can make a big difference in what you do need and what you don’t need, which can definitely change your premium too.Yeah, I think it’s just a good practice to, on a regular basis, probably annually is a good time to just go back and res shop your insurance and see is there a better rate that you can get from somewhere else, or there may be new products that you should consider that you didn’t know about before. But I think sometimes insurance can be one of those things that we just set and forget and you forget that it is something that we should actively shop to see if we can get better pricing. So if you haven’t res shopped your insurance in a while, take this as a sign to go out there and talk to a few brokers and see if you can find something better.Tony, I’m following a couple insurance companies on Instagram that are short-term rental specific or they’re talking about it a lot. I don’t actually know if they offer other policies, but what their message is is that a lot of short-term hosts don’t have the proper coverage that you need as a short-term rental host because they’re not going to a short-term rental specific insurance vendor, I guess be the word. Is that true? Do you see that happening too?Yeah, for sure. I mean, at least from the folks in insurance that I’ve spoken with, the coverage needs are definitely different from a traditional long-term rental versus a short-term rental. I think insurance companies tend to view short-term rentals is slightly more risky just because the volume of people that are coming through. And sometimes in a traditional landlord policy, if your average stay is less than a certain figure, it could negate some of the protections that you thought you had. So if you have a traditional long-term rental policy, but all of your guests, you’ve only got people seen for two or three nights at a time, that could undo some of the protections you thought you had with your policy. So yeah, I think it definitely is important that you’re shopping policies that are specific to the exact strategy that you’re using.Just a couple of things that I noticed when I went to a couple of these carriers and I got quotes from them that were stating they’re short term rental specific, and I haven’t compared them yet to my current policy. I literally just got these sent to me last night. But first of all, super easy process, I’ll say, but here’s some things I already noticed that they include, and I haven’t looked at my other policy to even see if they include this, but it’s bedbug coverage, lost rents, which I would say lost rents is pretty common in any rental, squatter and evictions, liquor liability, animal and pet liability and amenities like hot tubs and pools, and then also assault and battery. So I was surprised at that one. But the liquor liability, I did this post the other day about what’s it doing too much. I’ve won short-term rental that I bring fresh flowers and put them in upon their arrival, write a handwritten note and little drinks in the fridge and stuff.And someone said they leave a bottle of wine. And I’ve heard such mixed things about this as far as like, are you supplying the alcohol? This person goes and drives, gets a DWI, and then they sue you because youer them. All of these liability things go into my head. And so I asked one person, they’re like, well, we don’t rent to people under 18. And I was like, okay, well they must have been from Canada. The drinking age is 19 in Canada. And then it’s like, well, what if it’s teenagers coming with their parents and they drink and then their parents do because the parents didn’t see the alcohol and the kids got it or whatever. All these things go through my head. So maybe that if you are supplying the wine and stuff that you do have that liquor liability in there too.I think it’s better just to be as open and transparent with whoever you’re talking to about insurance, about everything your property offers so they can guide you in terms of what’s the right coverage. Because what you don’t want to do is hide something or say that you don’t do something or you don’t offer something, and then God forbid something happens that wasn’t disclosed and now you don’t have the coverage that you thought you had. So transparency, sharing everything at think is the best path to get the right coverage for your property.Yeah, because what’s the point of having insurance if you’re not going to have the right coverage? The point of getting insurance is so that if something happens at your property, they cover it. I looked at this campground to buy, and during my due diligence, I asked him to send me his insurance policy. His insurance policy did not cover any kind of heating that was wood fueled or you had to have wood. They had almost probably eight of the 10 cabins. There was wood burning stoves in them. So he wasn’t even honest with his insurance provider that there was and like, Hey, there’s a fire they’re not getting covered.Yeah, guys, insurance is one of those things. Obviously sometimes it can feel like you’re just kind of throwing money into the void, but it’s one of those things that when it’s needed, you want to make sure you’ve got all the right coverage.Okay, so then number nine, this kind of goes with the Google Voice thing, but it’s communication boundaries and systems, but not only with your tenants, but with your vendors and with your partners or your team members. So really defining how when tenants can contact you, what clarifies as an emergency. The most burnout I ever felt as a property manager was when I was 24 7, I allowed unlimited access to myself no matter who called. I picked up that phone, whether it was 3:00 AM whether it was 11:00 AM or 11:00 PM I can’t even tell you how many times I get maintenance requests at 1:00 AM in the morning, just like somebody randomly thinks about, oh, this needed to be done. Not something that would be an emergency. It’s just like they randomly decided to put in that their outlet isn’t working at 1:00 AM which is fine now because it all goes through the property management software and is put into a work order, and I’m not getting an alert for it while I’m sleeping because it’s not urgent and it’s just going in there. So I think really defining for the vendors, your team members, your tenants, even your guests.I stayed at a property where they had the all-in-one washer and dryer, and we have this in one of our long-term units, and we’ve had a couple issues with it, but we haven’t lately, knock on wood. But we were doing our laundry because we had been snowboarding and our clothes were kind of wet and stuff, and we wanted to use them again the next day. So I set my alarm to wake up at 3:00 AM to make sure I switch the laundry. I get up, there’s water everywhere in the laundry room, everywhere. The thing is leaking water out of it, the door is locked. I can’t even get our clothes out of it. I go to message the Airbnb host, it says, we are unavailable until 7:00 AM or something. They have an automated response thing that says from 11:00 PM to 7:00 AM we are not available, please.And I can’t remember exactly what it said. It might’ve said, please call if it’s an emergency. Or I might’ve just went and found their number to call. I can’t remember. But I called and I left a voicemail and they did not get back to me until 8:00 AM and they gave me the code to their little lockbox thing, and they had me shut off the water and then reset the washer and dryer and do this thing that obviously this has happened before, and they knew what to tell me to do. But it was like, I guess on the short-term rental side, what is appropriate to limit yourself as to how much GU is messaging you and communicating you? Should there be a limit to it at all?It’s a good question and something that we, I think kind of go back and forth on. We also have in our messaging that, hey, we’re generally available between these hours. If there’s an emergency, feel free to contact us. But we do our best to answer as many guest questions as we can before they actually ask them. And then we do as much work as we can to get them to review those answers to those questions they haven’t asked yet before they need ’em. So for us, that means we have a really strong digital guidebook. It means we have really strong signage within the property to answer some of those common questions. So I’ll give you a recent example. At the hotel, again, we’re a self-service, self check-in hotel. So it’s very much like an Airbnb. There’s no front desk like you get there, you have your code, you punch the code, go into your unit.The keypads that we have, they don’t light up by default. So when you walk up to the keypad, say you’re going at nighttime, I think that’s when this usually happens. You’re going up to the keypad at nighttime, the lights on the keypad are off. A lot of people assume that you have to press something first to get the lights to come on, and then you’d enter your code. And it kept happening where people were doing that. But in reality, if you press anything on the keypad, that’s the keypad thinking that it’s your code. So people would press a button to turn on the keypad and then enter in their four digit code and it wouldn’t work. And they locked the lock, they couldn’t get in. Now they’re calling us late at night saying like, Hey, I can’t get in. You guys suck. So what we did was two things.We added a small light right above the door handle, so it was a little like solar light that would just take in sun throughout the day. And then at nighttime it’ll automatically kick on and just shine light down onto the keypad. So now people can see immediately. And then we printed out this small little placard right above that light that says, read these instructions on how to unlock the door. And it has written instructions. And then there’s a small QR code they can scan that takes ’em to a video in our guidebook that shows them how to unlock the door. So those two changes of putting the instructions right there in front of them, solving issue of them not being able to see by adding the light. And now we’ve significantly reduced the number of people who are calling us saying, Hey, we can’t get into our unit at nighttime. So I think for us it’s understanding what is the issue that’s happening. Is it a one-off or is it a trend? And if it’s a trend, okay, what can we do from a management perspective to reduce the likelihood of that happening? Again, sometimes it’s just communication differences. Sometimes it’s communication plus physical changes. But I think if you iterate that over and over and over and over and over again, you’ve got a lot of opportunities to improve the efficiency of your property, whether it’s short-term, long-term, midterm, or anything in between.Yeah. So basically what you’re saying is it’s not a availability communication issue, it’s a being proactive to solve the reason to communicate in general. Yeah.If we can just eliminate the need all together, it’s a win-win because the guest never has to reach out to us, which means everything went smoothly. We don’t have to worry about getting late night phone calls, people being locked out of their units.Tony, maybe I should hire you to eliminate any reason for someone to call me.That actually would be a good idea if we do an episode where we go through Ashley’s recent messages and see what we can do to improve it.Okay. So the last thing here we’re going to go over is number 10, your plan for scaling beyond just being a DIY investor. And I started out with that. I did a lot of stuff myself. I did the property management, I did the asset management, I did the deal finding, I did the payables, I did the bookkeeping. I did some of the rehab on some of my properties. So I think to me, the most important thing to be able to scale is building systems and processes, which I know you guys hear that all the time. But I think the second biggest thing is having reserves in place and having capital. I think that plays a major role in being able to outsource things, automate things, just that sense of security that okay, you’re letting go control of these things. You’re letting somebody else do them, whether it’s a contractor doing the work or it’s a bookkeeper stepping in is having financial security that if something goes wrong, you’re able to pay to have somebody to fix it, pay for whatever the mistake was, or hire somebody else, or just like you are able to take the time from whatever else you’re focusing on because you can give up that little bit of money or whatever to be able to go and take that thing back on.So I think those are really the two big things, is having that financial security to be able to grow and scale. Having capital to put into deals and to not be so worried about, I don’t have money. I need to figure out how to get creative as possible to be able to do these things. And then just building out the system and processes starting at day one. What are the things that I do every single day that somebody else could do for me? And even if you don’t want to outsource, there’s things that I scaled back on that I was like, I don’t actually need someone to do these things for me. These are things that I actually enjoy doing and I want to be the person doing, but still building out. So whatever you can do to automate it more or to make it more efficient.Like having checklist, we had somebody on Shelby before, and she talked about how every time she does something, she creates a checklist. And with that checklist she saves, it, files it. If her or anybody on her team needs to do that same thing, whether it’s just sending an email to a prospective client, she has a checklist for it, here’s what you do, here’s what you say, follow through. She never wants to think about doing the same thing twice. And I think that has really helped me too. Just like the acquisition of a property, I can move so much faster during that, and it’s such a lighter lift for me than what it used to be. I didn’t have a checklist with, okay, get the utility switch, get the insurance switch, make the tenant handbook, get the property listed, all those things. And now it’s just like I can just knock out that checklist pretty quickly instead of like, oh, shoot, remembering now I have to do this.And then the next day remembering, oh, I have to do this. I can just sit down and go through the checklist. So I think those two things have really helped me scale beyond DIY, because I always was afraid and I had that mindset that if I do hire people, I’m not going to be able to pay them and I’m not going to bring in the income for that. So I think having those reserves set aside that my flip did not make the profit that I was thinking it would make, I would still have the money to pay my VA going forward.Yeah, I think when we talk about scaling beyond DIY first, there’s two books that I think every real estate investor should read. Neither one of them are about real estate investing, but I think applies. The first one is called the Checklist Manifesto. It’s actually by a doctor, I think his name is Atul Gawande. And it just talks about how big of an impact simple checklist had on improving, really saving lives within hospitals of just making sure that we’re going through the same process every single time. The second book that you guys should read is called Clockwork by Mike Mitz, who we’ve interviewed in the podcast a couple of times, but he takes the idea of the Checklist manifesto, but applies it to small business owners, which is what all of us are. So Checklist, manifesto Clockwork gives you the framework on how to build out these super simple checklist and SOPs within your business.Now, from a maybe theory perspective, there are two ways to build a business. The first way is top down where let’s say that you raise a bunch of venture capital. Let’s say you go out and you raise $5 million for someone to invest in Tony and Ashley’s real estate venture. And we go out, we hire A-C-O-O-A-C-F-O, a bunch of team members, and we’ve got $5 million is our starting pot of money to work with, and we built this entire team salaries and we’ve got 12 months of runway before we run out of money. That would be like a top down approach. Most people aren’t building their real estate business that way. Most people are building it from the bottom up, which means instead of going out and building a team from the very beginning, you are the team. You are everything. You are acquisitions, you are operations, you are finance and admin, your hr, your all things marketing.So as you start to build your business, it’s trying to identify, well, what is the highest and best use of my time? Where am I most effective? Where can I really drive the business forward, and how can I try and do more of those things and less of the other things that I don’t like to do that I’m not good at that aren’t really driving the business forward? And over time, finding people decide into those roles. It doesn’t necessarily have to be a full-time employee property management. That’s just you hiring a property manager to take on the management side. That’s a big workload off of your shoulders if you choose not to do that. Hiring a part-time virtual assistant from overseas who only works maybe five to 10 hours a week for you, that’s a minimal cost for a lot of free time back in your own calendar. So I think just having that approach of bottom up and trying to identify what are the things I should be focusing on versus things that I shouldn’t be focusing on is how you laid the foundation for scaling.Well, thank you guys so much for joining us for this episode of Real Estate Rookie. You can find us on YouTube at realestate Rookie, or you can find us on Instagram at a BiggerPockets rookie. You can also find me Ashley at Wealth Firm Rentals on Instagram, and you can find Tony there at Tony j Robinson. Make sure to leave us a review if you’re listening to this on your favorite podcast platform. We’ll see you guys next time. Thanks so much for joining us.