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5 Questions Every Landlord Needs To Ask About Their Rental Property

Matthew Whitaker - Wednesday, March 16, 2016

There are 5 questions every landlord needs to ask about their rental property.

Asking these five questions can save you thousands of dollars and whole lotta’ heartache!

In this video, Matthew Whitaker walks you step by step through these questions that will help you make better decisions about the rental houses you buy.

A full transcript is below this video.

5 Questions Every New Landlord Needs To Ask About Their Rental Property


There are 5 questions every landlord needs to ask about their rental property.

Asking these five questions can save you thousands of dollars and whole lotta’ heartache!

In this video, Matthew Whita…

Hey everybody. I’m Matthew Whitaker with gkhouses and today I’m going to talk about five questions every new landlord needs to ask about their rental home.

I’m going to tell you a quick story about my first rental house and one of the mistakes that I made, and then that’s going to lead into some of the five things.

When I first bought a rental house, it was from one of the guys here in the office. I always blame him for getting me into this rental business. The house was absolutely covered in fleas. The house needed a ton of work and he sold me this house. I was so excited because I beat out some other investors for the house.

One of the things that I forgot to do was to look at how many trees in the yard actually needed to be cut down. It was not something I really thought about because I was so focused on the house that I had forgotten to take a step back and look and see the bigger picture.

So I hope that these five things that we’re going to talk about today helps you take a step back and look at the big picture.

Now, what happened with those trees? Well, basically I had to spend $2,000-2,500, extra dollars that I had not planned on spending, just because I didn’t drive up to a home and look up.

I always tell people, when they ask, “Well, what’s the first thing you look at when you go to look at a potential rental home to buy?”

The first thing I do is drive up and I look up in the air and see how many trees need to be cut down.

So let’s take a look at the five things you need to look at when you’re looking at buying your first rental home or buying a new rental home.

1. The Age of the Home – Now, the age of the home affects so many different things that it’ll really affect your return on your investment. One of the biggest things the age of the home affects is just your monthly repair and maintenance numbers.

You can imagine a house that was built in the 1940s or the 1950s, the systems in it are much older than a house that was built in the 2000s, so they’re going to break down more often. Certain systems, like the heating and air, may not have even been put in the house originally.

So those systems breaking down will actually cause you to have higher repair and maintenance. The walls are 50, 60, 70 years old; obviously, those are going to break down. The electrical, just items break down more often.

Your repair and maintenance numbers are higher when you’re talking about a house that was built earlier rather than a house that is more recent, so age of the home is the first thing I look at.

2. Street Scene of the Home – What do the houses look like around it? Remember, I talked about taking a step back and evaluating the house. This is one of the best ways to take a step back and evaluate that house.

What do the neighbors houses look like? Do the neighbors keep up their home?

We have a lot of rental houses that are absolutely great rental houses that simply don’t rent because the neighbors are trashy. They have cars in the yard, kids toys everywhere, grass grown two feet high.

What do the houses look like everywhere? Are there burnouts on the street? Are there people loitering around? It’s very important that you take a step back and evaluate the street scene. Don’t get so focused on the house that you forget about the bigger picture.

3. Rental Market Rate – One of the things we say, especially when you’re new at this, is to use some sort of objective opinion of market rate. This is a great place that a property manager would actually come in, helping you evaluate what the market rate will be.

Please don’t listen to somebody that’s trying to sell you the house at what the market rate would be. You need some sort of objective, third-party opinion, especially if you’re new.

Now, some of you more savvy, older investors that have been in this business a while, you can usually drive up to a house and know exactly what the market rate’s going to be. But if you’re just getting into the housing business, into the rental business, you want to be very focused on getting an objective opinion of market rate.

4. White Elephant Issues – Now, what is a white elephant? A white elephant is an issue that you can’t change that has an effect on the market rate or has an effect on the rentability of the home.

So white elephants can be living on a busy street, living near industrial park. We frequently see bedrooms where you have to walk through a bedroom to get to another bedroom. We see houses where the second bathroom is actually in the basement. So there’s only three bedrooms, one bathroom on the main level and a second bathroom in the basement level.

There’s so many different white elephant issues and a white elephant is not something you can necessarily change. You may be able to put a privacy fence up to avoid seeing all the industrial, but the house may be just next to the industrial and that’s not something you can change.

You need to be very – again, there’s the word – “objective” about identifying white elephant issues. Take a step back, evaluate the house as if you were a renter.

Would you want to walk through another bedroom to get to a bedroom? Would you want to go into the basement to take a shower?

Certainly people are willing to put up with these types of things, but it’s definitely going to affect the market rate of the home. So you need to be very mindful of how that’s going to affect the market rate of the home.

5. The Retail Market of the Home – Don’t just think that every home has a retail market. There are certain investor class neighborhoods where they’re always going to be bought by investors.

They’re investor homes that will never be owned by anything else other than an investor. So they’re going to trade on things like rent rates, and trade on things like cap rates.

There’s more B and A class neighborhoods that do have a retail value. So it’s very, very important that you’re mindful of, what is the retail value, or what is the real return value of that house.

What can I sell that house for? Again, this may be a place where you’d want to get an objective opinion if you’re just getting started.

So those are the five things, if I was a new investor, that I would look at when I’m buying my first, or some of my first, rental homes. I hope this has been helpful.

With any of these five, if you run into this situation or you’re evaluating a rental home and you’d like an objective, third-party opinion, that’s something we’ll do for free. So I hope you’ll reach out to us.

Should I Rent My House In Nashville?

Matthew Whitaker - Monday, March 14, 2016

Nashvile Skyline Sunset

Should I Rent My Home In Nashville?

Well, should you? And how can you know for sure?

Everyday someone is faced with the decision of whether renting their home in Nashville is a good idea. You may be faced with this decision for many different reasons.

In hot real estate markets, like Nashville, this question may be based on whether you would like the extra rental income or you plan on keeping it in the family for some reason.

In slower real estate markets, this issue is the question facing homeowners that are not able to sell their home.

Regardless of the reason, this question has very real and significant effects on your financials and should not be taken lightly. Through the rest of this article, we will review the positives and negatives of renting your Nashville property. We will finish with risk factors that must be considered.

The Positives of Renting Your Nashville Home

Many positives exist for the Nashville landlord, but before getting carried away, remember that the rental property industry traditionally is not a highly profitable industry immediately, but is very effective in building wealth for the long term. If you’re looking for a way to make a return in real estate faster, you will need to learn how to flip properties in your area. Here are the positives of renting your house Nashville home:

Cash flow on black blackboard with businessman

  • Extra Monthly Cash Flow – Through the monthly rent payment, the landlord creates an additional “passive” income stream. This additional income can be used for multiple purposes, such as, paying holding costs for having the property or growing additional equity in the home by making larger mortgage payments. How this is used, is up to the landlord.
  • Build Towards Retirement – Many landlords use Nashville rental real estate as a cornerstone of their retirement portfolio. You can do the same. Your home can be the start of a Nashville real estate portfolio that generates significant passive income into your golden years. Real estate is one of the best tools to use the principle of leverage to grow your assets at a faster rate.
  • Secure Additional Time – In many circumstances, you may simply need additional holding time to achieve your goals for the property. Renting the home may be the answer to this need. By holding the property for additional time, you may be able to benefit from property appreciation, securing of another loan, or helping you build equity to get “right-side-up” to be able to sell the property.
  • Tax Advantages (write-offs, 1031 exchanges, etc) – To help increase the availability of rental property, the government has built in incentives for landlords that are in addition to the standard mortgage interest deductions. Some examples of these incentives are below (we’re not tax professionals so make sure you check with one first!):

1. Writing off your Nashville rental property’s expenses against your income

2. Tax-favorable treatment upon the sale of the property (ex. 1031 exchange)

The Negatives of Renting Your Nashville Home

  • The Tenant will be Harder on Your Home – A false belief that many new landlords have is that the tenant will maintain the home as well as the homeowner would. 90% of the time, this is simply not the case. Tenants are generally harder on the home and not as attentive to its unique needs. Expectations should be clearly outlined with potential tenants, but the landlord also needs to align his/her expectations. It’s helpful to understand the average life expectancies for certain home repairs and equipment.
  • Keeping an Emergency Fund – Although I hope that you always have an emergency fund on hand for life’s surprises, you will want to maintain a larger fund for your rental home’s unexpected repairs or default in rent payments. The landlord is responsible for maintained habitable living conditions at all times and any repairs that need to be made to maintain these conditions must be completed within a timely manner or the tenant may have case for recourse against the landlord. Not having the funds to make the repair is not an excuse. For the homeowner, when you have something that needs to be repaired, you can simply determine and rank the importance based on your ability to pay for the repair. This isn’t the case when you become a landlord. Your tenant will expect (and rightfully so) that repairs will be made in a timely manner.
  • Cropped image of female accountant working on financial reportBookkeeping, Tax Reporting and Exposure to Liability – When you undertake a rental property, understand that this is a business venture with specific laws surrounding it. You will want to keep a clear record of all of your expenses and consult tax professionals to ensure that you are reporting everything properly and gaining every advantage afforded to you. Also, realize that there are many laws surrounding the selection of tenants and the management of interactions with them. Make sure that you have read and understand these laws, both federal and local Tennessee laws. The last things that you want is a lawsuit due to your violation of Equal Housing Opportunity laws or Tennessee Landlord Tenant Statutes.
  • Increased Responsibility – When you are a landlord, expect to be the person that receives phone calls regardless of the day or time. If something breaks, you need to have a process for seeing the issue through to completion. You have responsibility as listed above for following additional laws. You are responsible for finding, showing and leasing the home. And if all of that is not enough, you are the go-to person for collecting rent when the tenant fails to pay on time. When I first started to rent houses, this was the biggest adjustment I had to make. I’ll never forget receiving those calls at 2am because a water leak had caused the ceiling to fall on one of my tenants while she was asleep. As you can imagine, that was not a pleasant phone call!
  • Initial Repairs Needed – Before rushing into the decision to rent your home, first make sure that an initial outlay of capital is not required to
Tired young couple are sitting on the floor with paint brush and bucket while doing repair at home.

get the home in marketable condition. Even though the Nashville rental market is hot, a sub-par product will not rent due to the other competition. It may take additional funds to get your home to a marketable condition. We explain to our owners that if a house sits on the rental market for a period of time, there is either a price or product problem.



Risk Factors to Consider When Renting Your Nashville Home

  • A large track hoe excavator tearing down an old house.

    Tenant Trashing Your Home – This is one of the two largest fears a homeowner has when considering whether or not to rent their home. If a tenant trashes your home and leaves you with a large rehab job before you can rent it again, it becomes a frustrating circumstance. Even if the tenant pays rent every month, they still may cause damage to the home that must be fixed to rent it again. As a matter of fact, based on our experience, a rental house will need work performed about 90% of the time before you rent it again. You must plan on this happening and be happy when it does not.


  • Slow-pay, No-pay or Eviction – This is the second of the two biggest fears a homeowner has when considering whether or not to rent their home. A tenant that pays rent late, does not pay, or must be evicted is also a risk that should not be ignored. This can cause financial issues if the landlord is not prepared. Months of no income. Rehab costs to get the home rent ready again. The cost to evict a tenant. Expense of marketing a home to get it rented again. All of the costs add up…and don’t forget your time…that’s worth something, right?
  • Multiple Problems at Once – Worst-case scenarios can have compounding effects. Make sure that you do not put yourself in position so that one negative event can turn into 2 or 3 negative situations in your financial life. An example of this could be you having a significant decrease in your monthly income and, consequently, not being prepared to absorb a second negative occurrence involving your rental home. If you could not handle a repair call or vacancy during this time because your budget is too tight, you may need to re-think renting your home.
  • Type of Financing – Before renting your home, be sure that you have verified the type of financing that you have on your home. Some loan payoff schedules (ex. balloon) would not be conducive to a long-term rental scenario. Know your time horizon and make sure that your financing can see you through.
  • Location and Trends – Before renting your home, make sure that the extra holding time will be beneficial to you. Look at the trends in your neighborhood and decide whether you believe the property value will increase or decrease during the additional holding time. If it will decrease, it may be time to sell and look in other locations. This is extremely important in larger cities like Nashville.
  • Deferred or Impending Maintenance – Before renting your home, be aware of impending maintenance items that will be required. A new roof or replacement of an HVAC unit should not come as a surprise and should be planned for. If any of these repairs are seeming likely in the near future, make sure to include that in your calculations and reserve funds.

In summary, realize that there are many things to consider prior to flippantly deciding to rent your Nashville home. One poor or miscalculated decision can cost you dramatically. Ask the right questions and use your best judgement. If your due diligence is thorough and all signs point to ‘yes’, you are well on your way to owning a portfolio of profitable Nashville rental homes.

7 Signs You Have a Nightmare Tenant

Spencer Sutton - Friday, March 11, 2016

A blue nametag sticker with words Hello I Am Your Worst Nightmare that might be worn by a dissatisfied, angry customer or someone complaining or being cranky

7 Signs You Have a Nightmare Tenant

Do you have a nightmare tenant living in your rental house?

When most people decide to rent their house, they have the best intentions.

That’s because we want to believe the best about people. We want to believe that the person we choose to live in our house will treat it like their own.

The truth is that some do…and some don’t. And most homeowners don’t really know the kind of tenant they have until the person moves in and has been there a few months.

The key is to have an extremely disciplined underwriting process for screening your tenant.

But you may already have a tenant. A tenant you placed yourself…or a tenant that a local property manager placed on your behalf.

Either way, you need to know what to look for so that you can determine if you have rented your house to a great tenant…or a tenant who is going to invade your nightmares and cause you to wake up in a cold sweat!

It may not start out as a nightmare, but if you notice these signs…beware…it could turn into a nightmare!

Here are the 7 signs you have a nightmare tenant:

  1. You never receive maintenance requests – Most of you are probably thinking, “I hope I never get a maintenance call from my tenants!” However, we want to suggest that if you don’t hear from your tenant, it could possibly mean that they’re hiding something. What could that be? It’s hard to say…it could anything from a messy house to negligent damage. You never want something like a small water leak continue until it’s a much bigger job than what it should have been. We give our owners the option to sign up for quarterly property inspections. We enter the home, take pictures, and send a report back to the owner. If our inspection turns up anything that we believe an owner should be concerned about, we let them know.
  2. You receive notice from the City to cut the grass or clean up the yard – I know it’s hard toHorizontal shot of dirty lawnmower in overgrown grassbelieve…but not everyone has the same cleanliness and sanitation practices as you. And if your tenant happens to be one of those people who is not too keen on cutting grass or taking out the garbage, you could have a problem. If this is the case, you might receive a nice notice from the City concerning your property. When you receive one of these notices, it’s not good news. It means that something is going on at your rental house that has caught the attention of the city! And if it’s something that caught their attention…you better believe the entire neighborhood is not happy about the condition of your property. I once received a notice from the city about trash needing to be removed from the yard. When I arrived, the entire back deck was covered in garbage sacks. This means that there were plenty of rodents, roaches, and other creepy creatures that had to be dealt with to make sure the property was sanitary again. If you get a notice from the city, you could have a bad tenant.
  3. The neighbors regularly complain about the tenant – If you lived in your house before you started to rent it out, the chances are that you know your neighbors. And if you have a good relationship with your neighbors, they will feel obligated to let you know about anything strange going on at your house. They will especially let you know if it’s something that disturbed their ‘peace and quiet’….and they should! Wouldn’t you want to know if there were always cars parked on your lawn? Or regular parties into the wee hours of the evening…or pets that are keeping them up all hours of the night. Whether you want to believe it or not, your tenants are an extension of you…especially if you were the one that placed them in the home.
  4. They are not keeping the utilities on – You may not believe whether the tenant keeps the utilities on or not is a big deal to you…but it has more to do with you than you know. A tenant that does not maintain their utilities could end up costing you thousands of dollars. If they don’t pay the power bill, the power company may possibly red tag the meter. If this happens, you will receive a visit from the electrical inspected of your local municipality before they agree to turn the power back on at your house. If they believe your home needs an electrical upgrade, that tenant’s $400 power bill just cost you thousands of dollars. If the gas has been turned off, your tenant may start using space heaters which can short outlets and may cause fire. That’s liability you don’t want in your life! One more problem, if the equipment that is supplied by these utilities are not running, they will break down like a car that sits for long periods of time. Remember, if it’s not running, its rusting…
  5. They are not paying rent and calling in bogus maintenance request – This is a classic move that a nightmare tenant loves to pull. It’s the tenant that you never hear from until they stop paying you rent. When they stop paying rent, everything in the house starts falling apart. Most of the time they are looking for reasons to blame you for their non payment of rent. Before they stopped paying rent, you didn’t hear from them…now, every crack in the wall and squeak in the floor is an issue. Pay attention to these tenants because they are more than likely going to bail out and leave your house unattended. Once their balance becomes too high for them to pay they, will abandon your home and leave it wide open in most cases…especially if you have started the eviction process.
  6. You cannot contact them and when you go by the house, someone else is always answering the door – This can be a problem in more ways than one. If you visit your rental house (on multiple occasions) and the person answering the door is not who you leased your house to, it could mean that a) they have additional people living in the home who are not on the lease or b) they are subletting your house. This may not seem like a big deal, but when they stop paying and you attempt to evict them you don’t know the names of the people that you are evicting. This can make it harder to legally remove the squatters and get your house back on the market in a timely manner.
  7. Angry man speaks on the phoneThey have a terrible attitude – Everyone has bad days…and that’s no different for tenants than it is for you and me. But when you have a tenant that blatantly behaves in a disrespectful and abusive manner, you have a nightmare tenant. These kinds of tenants are looking to blame you, the landlord, for any and everything possible.



  • You didn’t repair the broken cabinet door fast enough…
  • You didn’t answer the phone when they called after hours…
  • You charged a late fee even after they gave you their best excuse…

This list could go on to ‘z’…but I think you get the picture. If their attitude stinks, chances are your relationship will be the same.

Nightmare tenants are a dime a dozen…and great tenants are sometimes hard to find.

Do your best to avoid the nightmare tenant by doing your homework and screening your tenants the right way.

And if you think you need help, make sure to give us a call…we’re experts at finding the best tenants for your rental houses!

3 Questions Homeowners Ask Property Managers

Matthew Whitaker - Tuesday, March 8, 2016

What are the 3 questions homeowners ask property managers?

In this video, Matthew walks through the most common questions. There’s also a transcript below the video.

Three Questions Homeowners Ask Property Managers

There are usually 3 questions homeowners ask property managers when they call. In this video we walk through the most common ones.

Hey everyone, I’m Matthew Whitaker with GK Houses, and I’m going to talk about a subject today that potential incoming clients are always asking. It’s the three biggest questions they ask us.

The questions are:

  1. How quickly can you rent my home?
  2. How do you keep from renting it to the wrong person?
  3. How much do you cost?

Let’s take a look at them.

The first one is, how quickly can you rent my home? Right now we’re renting houses at an incredible pace.

I think that’s just because of the size of our portfolio and the numbers that we’re able to generate. Right now we’re actually leasing homes, signing the leases in less than three weeks from the time that we have it 100% marketed.

From a move-in standpoint, we’re actually able to do that in less than five weeks. So once we get your house 100% marketed, pictures, a good description, everything pushed out to the Internet, you should start receiving rent within five weeks.

That’s if we have everything priced appropriately, the house looks great, everything that we need to do. We call that price and product, making sure the price and the product match. That’s what we call market ready.

The second question is, how do you keep from leasing my house to the wrong tenant?

I think this is an important question, because you don’t want to get the wrong tenant in your house. You want to make sure on the front end that you don’t ever get them in, you don’t have evictions, they don’t tear up the house.

So we have a five step process to make sure that we don’t lease it to the wrong person. The five steps we look at from an application underwriting standpoint is…

  • credit score
  • ability to pay
  • rent verification
  • work history verification
  • a criminal check.

Let’s take a look at those individually. A credit score. A credit score is completely based on the amount of rent for the home. So under 800 has a 520 credit score. Over 800 has a 580 credit score.

The second thing is just income. We want to make sure the tenant makes at least three times gross the monthly rent. If somebody had to ask me what’s the one thing, if I could only look at one thing to underwrite an application that produces a good paying tenant, it’s this metric.

Three is really the minimum. I would never go below three. Once you get to four and five you’re really going to have a successful experience with that tenant.

The next thing is to look at rent history. We want to talk to the landlords that they’ve rented with and make sure that they paid their rent on time, that they’ve taken care of the home, that they’d rent to them again. Those are the types of questions that we ask.

The next thing is we want to make sure that they even have a job today. You’d be surprised how many people apply. They had a job. They were able to submit pay stubs, and now all of a sudden they don’t have a job. The last thing we want to do is move somebody in and have them have just lost a job and not be able to pay.

And then the last thing is criminal background check. Obviously we don’t want violent felons or somebody with a history of multiple violent misdemeanors in the home. We want to make sure that there’s a fine upstanding human being living in that house.

The third question most people ask is, how much do we cost?

Well, one of the things is that property managers are all over the place in terms of what they charge homeowners. I’m going to put at the bottom of this blog article our three packages. We have a silver package, we have a gold package, and we have a platinum package.

The silver package is kind of our base rate. You’re going to get just kind of basic property management out of this. There’s nothing wrong with the silver package. It’s what most property managers do.

That’s obviously us accounting for all the rent, making sure the rent’s paid, underwriting their applications, making sure we get good tenants. You’re going to get a great experience at the silver package.

For those of you that want kind of the step up, you might want to go with the gold package. Now this has some other services that we think are kind of preventive maintenance services. We want to also not just manage in reactive mode. We want to manage in a proactive mode. That’s kind of what the gold package gets you.

The platinum package is kind of the everything package. It includes an extra rent guarantee. That is something that we’re offering that’s something super exciting that a lot of homeowners are excited about the idea of having that as kind of a fallback in case something does go wrong.

So what do we charge? Take a look at those packages and we’ll be very transparent about what we charge.

*The packages described below are for owners of between one and four houses. Investors with five or more houses managed by have should call for discount volume pricing.

Silver Package

  • Management Fee – 10% of rent collected
  • Leasing Fee (paid after a tenant is placed in a vacant house) – 1st Month’s Rent

Gold Package

  • Management Fee – 9% of rent collected
  • Leasing Fee – 1st Month’s Rent
  • Eviction Protection Plan, Gutter Cleaning, HVAC Preventative Check-up, Quarterly Inspection – $70per month

Platinum Package

  • Management Fee – 8% of rent collected
  • Leasing Fee – Half Of The First Month’s Rent
  • Eviction Protection Plan, Gutter Service, HVAC Prevention and Quarterly Inspection – $70per month
  • Rent Protection – 6 months of guaranteed rent should your tenant stop paying and go through the eviction process. You will get paid the monthly rent regardless. – 1 Month’s Rent (prorated monthly)

Overcoming Fears of the Leasing Process

Matthew Whitaker - Tuesday, March 1, 2016

One of the benefits of working with gkhouses is our leasing department. We are extremely focused and disciplined in our marketing and screening process.

Just last year we rented 421 houses.

Caroline Teal is a part of our leasing department and Matthew Whitaker recently interviewed her about our process.

You can find a full transcript of the the interview below this video.

Matthew and Caroline

In this video Matthew and Caroline discuss typical fears that owners have when they think of leasing their house.

Matthew: Hey, everybody. I’m Matthew Whitaker.

Caroline: I’m Caroline Teal.

Matthew: And we’re here with GK Houses and we’re going to discuss leasing.

Now, one of the things we know about owners is they have some serious fears about leasing, especially people that do it themselves, so we’re going to discuss things that are owners’ fears.

Things like, “How do I keep from renting to the wrong tenant? They may tear it up. How do I keep a bad person from moving in? How do I rent the house quickly?”

So, we’re going to jump into some of those questions, address them, and hopefully you will find it to be helpful. I brought some questions.

We’re going to ask the resident authority at gkhouses, so we’re going to dive right in.

So Caroline, let’s start with a typical day for you.

What does a typical day look like just for you?

Caroline: So, I would say it’s going to probably begin with looking at what I currently have available. First and foremost, making sure that everything is marketing correctly and to the best of our ability.

I want to make sure that all marketing photos are correct and are a great quality, making sure that all the information that we’re presenting to prospective tenants is also accurate. And of course, looking at all the inquiries we’re getting, looking at the flow of questions, and maybe even concerns for certain properties.

That’s probably my biggest thing. And then of course, handling applications, new applications, pending applications, and trying to speed up that process, and working with each and every applicant as fast as I can.

And then hopefully signing a lease.

Matthew: So, one of the things that’s really important, and this is kind of a pointer for everybody, is getting the right information online, because I saw a statistic recently that it’s like 60 of 70% of people actually will see it online before they ever decide to go see it.

So, the important thing would be making sure there’s great pictures online, making sure there’s a great description, making sure that we’re selling that property, because the whole goal is to get a tenant to go see it. And then once they go see it, the whole goal’s to get them to apply.

So, talk to me about what’s the most houses you’ve had available at one time?

Caroline: I would say since I’ve been here, the most houses we’ve had available at one point in time was 150.

Matthew: Okay. And so what would be the benefit to an owner of working with a company like ours that has 150 houses available?

If I was an owner, one of my biggest fears would be like, “Dang, that’s too many. How does Caroline keep up with it? How do we make sure that we don’t forget about a house?”

Caroline: Typically they’re going to see signs outside houses. I have people tell me all the time they see our houses everywhere, they see our name everywhere, whether that be out in yards or on the Internet itself. So, when they come in, they’re pretty well aware of us already. I don’t really have to give them much of a background, which is awesome.

And then of course with having that large inventory available, that leaves room for more opportunities for each owner and each individual, so if you have an interested person in one property, but they go to visit and it maybe not be exactly what they’re looking for, we’re going to have 149 other options that might be just the right property for them.

Matthew: And so, I think one of the things to point out too is just being with a large property manager gives credibility to tenants.

One of the great things about us is we’ve become a source for people in Birmingham to find houses to rent. So, the next thing too, and I kind of jumped ahead of our questions here, but tell us a little bit about the marketing on it.

Again, one of my fears would be, as an owner, “How do they keep from missing my house? Maybe they get 149 right, but then miss mine.” How do you make sure that doesn’t happen?

Caroline: Right. So, I think with having a large number of other homes that I can compare with that are on the market at the same time, maybe even in the same area, I’m able to accurately price a home and hoping that it will rent in a short amount of time and to a qualified tenant.

So, every week what I’ll do is I’ll go through our current availability, all of our current homes, look at them, sort them by the date they started marketing, and ask myself, “Okay, if it’s been really over…” I mean, I’m looking at it in three weeks, because I want to be more aggressive than not.

And look at the potential feedback, look at the number of showings, and if we’ve received any applications, and I move forward from there and try to figure out the best path to move forward with that property.

Matthew: And I think one of the things to point out too is we actually have a team audit too, so you do it individually and then we get in here every Friday as a team and basically look at all the marketed properties.

So, we’re going through and saying, “Hey,” we’re talking to Frankie, who’s our leasing agent, “Why is this house not leasing? What are people saying about it?” And we always have that price and product. Is this something that we need to drop the price because of the product, or is there something that we can do that’s keeping that house from leasing?

Caroline: Right. I think it’s incredibly valuable to have myself in here that deals with leasing, the leasing agent, and then also the property manager himself, who’s been at the property, very familiar with the property, and maybe possibly good or bad things about it. So, I think it’s important to have everybody’s input.

Matthew: So, tell me, one of the other questions I think an owner would have is, “How long does it take to rent my house?” So, if I’m an owner and I’m coming to you and you’re the person that’s renting all these houses, what’s your answer to that question?

Caroline: So, something that we started this past year is recording the time it takes for the house to not only be 100% marketed, but also the time it takes to sign the lease and move somebody in. So, currently we’re looking at less than three weeks to sign a lease, and then less than five or less to move the tenant in.

Matthew: Five or less weeks total. So, from the time that we start 100% marketing a property, we’re signing a lease in less than three weeks on average, and then the tenant’s moving in in less than five weeks total from the time we started marketing.

Caroline: Right. And something to take into consideration there is that, as I mentioned, it takes two to three, on average, business days to go through that approval process.

So, with that, it’s not a 20-minute turnaround time, and that’s just because we do want to guarantee our owners that we’re placing a qualified tenant.

You’re taking in the application process, which honestly can take a couple of days, and then add in signing a lease and time for that person to be prepared to move in. So, I think being able to do that in three weeks and then five weeks is great.

Matthew: And then you said something that I think is important; a qualified tenant. One of the things that I believe is that a qualified tenant comes from getting this house out to a lot of people, showing a lot of people, getting a lot of applications. You get a lot of applications. I think at one point, one month, you got like 500 applications.

And so, how do we underwrite those applications? What do we look for? Because I think that addresses the fear of, “How do you make sure that the wrong person doesn’t get into my house?”

Caroline: We actually send out our applications to a third party that’s dedicated, five days a week, to look over every one of our applications. I think with that, you’re relieving any biased opinions.

So, it’s very difficult when I do have an applicant in here who is telling me the reasoning behind their bad credit, or criminal background, or something of that nature, and as a human, it is hard sometimes to look past that, but I think that that’s why we have this third party.

Matthew: And so, what we’ve done is we’ve basically said, “Hey,” this third party, “This is our criteria. We’re not going to deviate from the criteria. If we have to show the house 100 times, get 100 applications, this is the criteria to rent the house.” And so, that’s what kind of produces a good tenant.

All right, so the next question I want to talk about is when an owner has a house available, they’re always curious, like, “What’s going on? How many people have seen it? What are people saying?” So, what type of information does GK provide their owners?

Caroline: In the weekly email that’s sent out, it’s going to give each owner how many applications have been received total, how many that week, how many showings total, and how many showings that week, so they’re constantly being updated on the status of the home.

When a home’s marketing and I do see that it’s been over maybe a month and we haven’t had a tenant yet, I would say I have a look at the feedback that’s received.

We do receive a lot of feedback. Every single day, there’s going to be somebody who’s going to view a house with our leasing agent, or independently. We do have both options, depending on the property.

And so, I will gather that information and look at, as you mentioned, product or price. So, we’ll make suggestions maybe that have been commented on repeatedly, or look at the price and maybe consider a price reduction or even a rent promotion.

Matthew: Good. Well, I appreciate your help. And this is “Overcoming Fears of the Leasing Process,” and I hope it was a helpful video.

How Do I Know if My Landlord is Legit?

Matthew Whitaker - Tuesday, February 23, 2016

How do you know if your landlord is legit?

This is a serious issue that you need to resolve before you lease a house. In this video, Matthew Whitaker is going to walk us through three reasons why it’s important and then three ways you can tell if your landlord is ‘legit’.

How Do I Know If My Landlord Is Legit

Understanding if your landlord is ‘legit’ is a big deal. In this video Matthew will walk through three reason WHY you need to know and then three WAYS to tell if your landlord is legit.

Hey, everybody. My name is Matthew Whitaker, and I’m the Birmingham Team Leader here at, and I want to talk to you about a question that I think the tenants need to be asking more is, “How do I know if my landlord is legit?”

I’m going to outline three reasons why first.

Why you need to know whether your landlord is legit.

  1. The first reason is safety. The last thing you want to do is move into a home where you don’t feel safe. And so one of the things that a property manager like us is very focused on is making sure that we’re providing a safe place for our tenants to live. Now, that may mean a safe place from a crime standpoint, it means a safe place from a system standpoint, like electrical systems, plumbing systems. Our goal ultimately is safety.
  2. The second thing would be maintenance. You want to make sure that maintenance items are taken care of in an appropriate manner. So that’s the second reason why. That’s the reason you’re going to leave a house is because of maintenance, if maintenance items aren’t taken care of quickly.
  3. The last reason is foreclosure. We live in a town where there’s a lot of people getting foreclosed on, and if you go with a reputable, legit property manager, they’re going to kind of insulate you from this whole idea of the owner is getting foreclosed on. Now, they can’t protect you from getting foreclosed on, from that house getting foreclosed on, but I think it’s very important that they’ll be able to protect you from the fact of disclosing things to you, giving you some of the appropriate information, and then also accounting for your security deposits so that a landlord that is getting foreclosed on doesn’t run off with your security deposit.

All right. The next thing we’ll look at is the how to tell.

What are three great ways you can tell if your landlord is legit?

The first thing is to go check with your real estate commission, with the State Real Estate Commission. Most property managers are required to be licensed brokerages of the Real Estate Commission. That means that they’re licensed agents, they have licensed real estate brokers. That’s a very easy way to find out if your landlord is legit.

The second thing I say is go to their office. If you’re worried about this, do they have an office? Do they have a place where you can go talk to somebody? I think that’s very important that they have a location where you can get in front of somebody if this is a fear of yours.

And the third way is testimonials. We’re connected via the internet these days. So I think it’s very important for you to be able to go out and find some information on these landlords whether they’re legit or not. Now, certainly landlords, we’re in a very conflicted business, so you’ll probably find some positives and some negatives about landlords, but the important thing is if there are testimonials about them, then you’ll know that they’re probably a legit landlord.

So again, this video is entitled, How to Know If Your Landlord Is Legit. We urge you to find out if your landlord is legit because I think safety, maintenance and protect you from foreclosure. So I think it’s very important for you to do that.

How To Make Sure Your Tenant Moves In Happy [VIDEO]

Spencer Sutton - Thursday, February 18, 2016

Walking through your rental property just prior to a tenant moving in is critical.

We have discovered that setting the relationship off on the right foot will determine how a tenant views you as a landlord for the remainder of the lease.

If they move in and there are several items broken or other problems, they will view you through that lens from that point forward.

In this video, we will walk you through our typical move-in process and what we look for just two days before a tenant moves into one of our rental houses. Below the video is a full transcript.

Pre Move In Walk Through

Do you want to make sure your tenant is happy when they move into your rental house? Then you need to watch this video. After moving in thousands of tenants into our houses, we know what to look for a…

Spencer: All right, everyone. My name is Spencer Sutton with gkhouses. We are at a rental property that has recently been leased. And I’m here with one of our property managers, his name is Wayne McGinnis, and what Wayne’s going to be doing is giving a “move-in walk-through.”

So, the lease has been signed, deposit has been paid, first month’s rent has been paid, but the tenant is not moving in for another two days.

And so what we like to do is we like to walk-through the house, just to make sure everything is working, everything is the way it’s supposed to be, so that when they do move in in two days, it’s a very good experience for that tenant and that we’ve taken care of everything.

So, I’m going to get behind the camera and I’m going to just follow Wayne through this house and we’re just going to see exactly what he looks for, and he’s going to walk us through that whole process. So here we go.

Wayne: Hey, I’m Wayne McGinnis with GK Houses. I manage the eastern side of town, everything east of 65 and this is one of our houses in Moody, that we’re going to walk through today with Spencer, and we’re going to walk-through and make sure that everything’s good and ready for the tenant to move in.

All this kind of stuff that’s been left is not good.

Actually should have caught this previously but this why we do these walk-throughs, to make sure that any little things that got left get caught before the tenant moves in, because we don’t want them to move in and see stuff like this, that they don’t want to have.

Obviously things like tile that are used to replace in case there’s a crack in the kitchen floor, any paint that we’re using on the home that we want to leave if we can and doesn’t bother the tenant so that we can do proper touch-ups if we have to in the future.

Everything else, like this kind of stuff, is garbage, and we’re going to get rid of it today so that when the tenant moves in in two days, it’s not here in their way.

All right, now that we’ve disposed of the garbage and stuff that was in the garage, we’re going to look in here and check to see if it’s closet or bathroom, we’re going to make sure all the doors open and close properly without sticking.

Make sure all the lights are working. Make sure the fans are working. We also want to make sure that the toilet is secure, that it’s flushing correctly.

We want to make sure the cold and the hot water are working, and we give a minute to make sure the water gets hot.

And here we have the furnace. Everything is clean.

We do have some leftover parts that we’ll leave just in case the condensation line ever has any problems, we’ll have some pieces to work with. But all in all we want to make sure this area is clean. There’s no dirt piling up all over the floor.

We just want a clean room even though it’s a furnace room because it’s part of the house.

We always want to make sure that this is not caked up. The filter is not clogged before the tenant moves in, so that they have a nice used filter.

We want to check the thermostat and make sure everything is working properly.

And we’re going to check the sink, make sure everything is draining properly.

So when you hate it for the tenant to move in, and find that the garbage disposal is not working on day one. So we will make a list of this and have it repaired before the tenant moves in.

We want to check the refrigerator and freezer, make sure it’s clean.

Spencer: Okay. As Wayne is going through his move-in walk-through, really what we’re trying to do is cut down on any kind of maintenance costs that a tenant would have.

So as you can see, Wayne’s been checking the garbage disposal which we found out is not working, so we’re going to get somebody to have a look at that.

But to check the microwave, check in the refrigerator, look at the dishwasher, make sure the garage door is opening, all these things are very important.

Just every little thing that typically a homeowner would not really think about, I know I wouldn’t at my house, but we need to check to make sure everything is working properly.

Or else, we’re going to get a maintenance call that something’s not right and we’ll have to come back out and fix it. So we’re just trying to cut down on that because when a tenant moves in, if everything’s working, then they’re going to be happy.

They’re going to be excited to be in this nice house and we’re going to be excited to manage it for them.

Wayne: When the last tenant moved out, we had to replace the carpet on this area right here. And it shows that we tried to get as close a match as possible to what’s here, all this was clean.

So it still looks a little dark but I think we got a close match, which is really good.

That’s what you don’t want to happen when you’re dealing with electricity. Apparently there’s a wiring shortage in the ceiling fan, which I have now shut the power off to and we’re going to have to make sure that that gets taken care of before the tenant moves in.

All right, checking the door on the master bathroom. Coming in, a really nice bathroom here.

And it’s showing signs of water damage. This was not here during our move-out report, nor during our inspection, nor during our final punch list.

So I’m concerned that the shingle or something had blown off. Again, it’s why it’s great that we do these make ready move-in walk-throughs to make sure that the tenant doesn’t move in and have these questions before we do.

And like the bathroom, usually if a leak is going to happen, it’s going to be somewhere you can’t see it, nine times out of ten. No real explanation for that but if you don’t look it up in the closet, you’ll never see it.

We want all the doors to latch properly. We want them to open and close without any problems for the tenant.

What Do I Need For My Rental Application?

Matthew Whitaker - Tuesday, February 16, 2016

Hey everybody, a question we get a lot is what do I need for my rental application?

We filmed a short video to share a short video, tell you what you need before you fill out an application.

What Do I Need For My Rental Application?

Rental applications can sometimes be confusing. And a well put together property manager will have a very disciplined underwriting process. In this video we walk you through exactly what you need to m…

First of all, you need to know there’s two ways to fill out an application with us.

  1. The one we highly suggest is to fill one out online. Obviously, you can do that right here from this page by just clicking the online application button.
  2. We do have paper applications. You can download them from our site, you can get them at our office, but we always say hey, it’d be much easier for you to fill it out online. It goes directly to the source that underwrites the application.

Those are our two ways to fill out an application.

We look for five things when we are underwriting an application. I want to hit those real fast. They are actually written here on this document, right there.

1. The first thing is we look at your credit score. We determine that based on the price of the house. If it’s an 800 or below house, we look for a 520 credit score. If it’s 800 or above, we look for a 580 credit score. There is a way you can submit an extra deposit if you fall below those credit scores, but look at the site for that for more information.

2. The second thing we look for is simply a favorable work history. We want to know that you have consistently held a job, and/or have a job today. We’re going to verify that employment. So one of the things you would need is to be able to tell your employer that we’re going to call. Give us the information, give us accurate information. Some people use the work number. Let us know when your employer uses that. It’s very important to get us the right information.

3. The next thing is a favorable rent history. Obviously, we want to know that you’ve been a great tenant, paid rent on time, taking care of the house, the last house, the last few houses that you’re at. We’re going to call one, possibly two, previous landlords. So we urge you to put the correct contact information for getting in touch with those landlords. Obviously, that’s something that holds up the process if we’re not able to call your landlord and verify. If it’s the wrong number, we can’t get in touch with them. That’s something that would hold up the process. So making sure that we have very good landlord information.

4. The fourth thing is showing ability to pay. This is where you would bring your check stubs. Very important for you to provide that information for us. If we have to go find it, that’s going to hold up your process. We look for three times the gross monthly rent and income. Let’s say, the house rent is for a $1000 a month. If the house rent is for a $1000 a month, we want to know that you make $3000 a month in income.

5. The last thing we look for is a criminal background check. We look for a history of violent felonies, and we want to make sure that there’s no consistent violent misdemeanors. If you committed a non-violent felony over 10 years ago, you’re fine, that’s not going to affect whether you rent from us. The other thing is we just want make sure there’s no consistent violent misdemeanors.

So the three things you especially need to submit with your application would very simply be a good way to get in touch with your current employer. The second thing would be a good way for us to get in touch with your landlord, and the third thing would be pay stubs, so that we can see how much money you make.

That’s it. I hope this is helpful. I hope you apply with us. If you have any questions, you can submit those to [email protected]. Thanks so much for thinking about being a gk tenant.

My Tenant Has a Dog Against The Lease

Matthew Whitaker - Wednesday, February 10, 2016

Happy dog bowl is a very happy hungry eager and excited dog asking to have his meal

What do you do if your tenant has a dog living in your house against the lease?

Many of our owners don’t mind allowing pets and we have a special pet deposit for them in our lease.

But it’s ok if you choose not to allow a dog live in your home because it does have its drawbacks. Some breeds shed constantly (like my Black Lab) and if they’re a puppy, they can have the occasional accident and possibly chew on parts of the house that you’d like to keep their teeth OFF!

In this video, Matthew and I discuss what you do when your tenant has a dog living in your house against the lease.

My Tenant Has a Dog Against The Lease

This video is about My Tenant Has a Dog Against The Lease

Full Video Transcript:

Spencer: All right. Spencer Sutton and Matthew Whitaker here with GK houses.We are back to talk about pretty common problems that we have seen over and over.

Matthew: Unfortunately it seems like everybody has a dog these days…It’s just at the end of the day whether they’ve disclosed to you that they have a dog or not.

Spencer: And whether the owner agrees to allow the dog or not. I know I had a rental house. This was several years ago. And I had expressly said no dogs for this house. I had just had the hardwood refinished. It was such a nice house. Probably six months into the lease, I needed to go to the house to talk to the tenant about something.

I didn’t really announce I was going to come by. I was just going to drop by. I was in the area. So I went. I knocked on the door. I’ll never forget about it seemed like 20 but literally it was probably seven little Chihuahua-type dogs came streaming around the corner, barking in the window right by the door. When the tenant left, the hardwoods were totally destroyed.

Now, I didn’t know. What can I do? How can I handle this situation? If I find out that my tenant has dogs against the lease.

Matthew: You just didn’t have a dog owner, you had a dog breeder in your house.

Spencer: Yeah, that’s right.

What Do You Do?

Matthew: Hopefully, that’s not the situation that you find yourself in. But what do you do if you have a dog in there and you absolutely want them out? The first thing I would say is you have a decision to make. This is a decision that we’ve gone both ways on based on the circumstances.

Is this the decision where you want to send them some sort of lease violation letter to let them know that, “Hey, you’re in violation of the lease. I’m going to allow this to go on.” The only reason I would do this is if I felt confident that the tenant would be able to repay anything that was wrong with that house. That may be your correct decision. You may get the most money. One of the things we want to focus on is how do you get the most money in the door?

Spencer: Well, let’s say that happens. Let’s say you send them a letter. At that point do you also say, “I’m going to charge a deposit to have that dog here?” Like in the middle of the lease, is that common?

Matthew: This may be too late for you if you are watching this video. But it may be something you would want to include in the future. That really ought to be addressed in your lease. It’s addressed in our lease. If we find a dog that is in violation, we actually charge them a fine for it, a non-refundable fee immediately for that. Then they also have to give us a pet deposit.

Again, maybe, they got a dog two months, three months. Maybe, they didn’t lie to you on the application. but they, unbeknownst, just got a dog. Then that’s the kind of thing…a lot of it depends on the relationship you have with your tenant. How confident you feel that they are going to be able to pay off whatever happens with that dog.

Spencer: So one option is to send them a letter, allow the dog to stay. Have them pay a fine possibly but definitely a pet deposit.

So What’s Another Option?

Matthew: The other option would be to evict them. This would fall under a material breach of the lease. Because certainly you need to have it in the lease whether they do have pets or they don’t have pets. If you don’t, you may find yourself that they are not in material breach.

If that’s not in your lease, you may be forced to just suck it up and deal with it. Because if it’s not a part of their lease, then you can’t, obviously, evict them. If it is a part of their lease, it’s called a material breach or a breach of the lease for material reasons. This is basically they are in violation of the lease for something other than rent. Then you have to go through the eviction process.

We shot a video on the eviction process. It would start with a seven-day notice. And maybe a seven-day notice would be enough to get them to get rid of the dog. The seven days basically says, “Hey tenant, you’re in violation of the lease, and you have seven days to cure that violation. And if you don’t, I’m going to deem the lease terminated.” But it gives them seven days to get rid of the dog.

Are Certain Breeds Dangerous?

Spencer: Now, let me ask you another question. Not all dogs are created equal, right? In my case, they are small little tiny dogs. I personally have a Labrador at the house. Are there certain types or breeds of dogs that owners should be hesitant to allow in their house?

Matthew: Yeah, that’s a great question. There are types of dogs or breeds of dogs that insurance companies deems dangerous. So you can imagine those that are on there, the Rottweilers, the pit bulls. There’s a list of about 10 or 12. You want to make sure before you even put a tenant with a dog in that that dog isn’t in direct conflict with your homeowners insurance policy. Because if the dog bites a child, if the dog bites anybody, it could come back on you.

Spencer: Meaning your insurance wouldn’t cover it?

Matthew: Correct. We have had incidences where an insurance company will allow a tenant to get renters insurance that actually covers those types of dogs and then they are allowed to move in. The scary thing about that for us is what if they let the insurance lapse?. If a child gets bit by a dog, nobody is going to win. So it’s a very scary thing.

Spencer: Plus we have property managers or maintenance crews that come to these houses. So we want to also look after their safety as well.

Mathew: That’s right, that’s right. We’re big on safety. Only as a last opportunity would we really want one of those violent breed dogs in one of our houses.

Spencer: Anything else we should know?

Matthew: No. I just think it should be something that is best addressed on the front end. I think it’s very important to have this type of information in your lease. If you haven’t leased a house yet, this is a great time to make sure it is a part of your lease. If you find yourself in this situation, you have some decisions to make.

You need to decide based on what your lease says. Is this something I can allow to go on that I think I will get money for in the end if something bad happens? Or, hey they’re already a problem. This would be a good reason to get rid of them.

Spencer: Also, I think if you’re dead set on not allowing a dog into your rental home, have that conversation on the front end. Don’t let it just be a check box on your lease. Have the conversation when the tenant comes to sign the lease to talk about what will happen if a dog is found in the house.

Consider This a Warning…Clean Your Gutters

Spencer Sutton - Tuesday, February 9, 2016

We sent an email to all of our owners a couple of months ago urging them to either send us out to clean their gutters or hire someone else to make sure that job is done before serious damage can occur.

This video was shot just a week ago after we received a call from a tenant about water damage inside their home. Watch the video to see what happened when these gutters weren’t cleaned.

Consider This a Warning…Clean Your Gutters!

Regular maintenance and care for your rental house is extremely important. In this video we talk about how something as simple as allowing your gutters to become clogged can possibly lead to greater d…


Spencer: So we got a call from a tenant that they were having some water damage in one of their downstairs rooms. We came out to check it out and this is what we found.

The issue is, is that we’ve got a lot of clogged gutters, there are leaves, and so, these gutters haven’t been cleaned in, from what it appears, probably two, three, four years.

And this is a result of clogged gutters, as you can see, all of this, the water drains down, it comes off of the gutters, and it creates this ditch that now has to be filled up and repaired, along with the gutters cleaned, along with the basement damage that needs to be repaired.

So you’ve just seen, outside, how the gutters are full and the water comes off the roof into the gutters and overflows on the ground, and then this is the result of what happens, so we’ve got to…

This is a room, this is a basement in a house, a row house, and the tenants typically don’t come down here a whole bunch, but when they started coming down here they noticed that some damage had been done to the house.

And this is what has happened just because the gutters were full and the water overflowed. So, you see here, all of this, water is coming through, (we cut this out to take a look and see what’s going on), and the carpet is now damaged. So what we’re going to have to do is, we’re going to have to cut out and replace all this sheetrock around here, all because we didn’t take the time to clean the gutters, and this is part of the issue.

How Do I Evict My Tenant?

Matthew Whitaker - Monday, February 8, 2016

Sometimes tenants need to be evicted.

It doesn’t mean they’re bad people or that they are intentionally taking advantage of you, the homeowner. But unfortunately, it’s sometimes necessary.

In this video, Matthew Whitaker and I discuss the steps necessary to evict a tenant in Jefferson County, Alabama. This is where we have the most experience dealing with our own tenants.

How do I evict my tenant?

This video is about How do I evict my tenant?

Here’s the transcript of our conversation:

Spencer: Hey Spencer Sutton and Matthew Whitaker here with GK Houses in Birmingham. And today we really want to handle a very sought after topic, one that we get asked about all of the time. When we get a new owner, especially if they’ve never rented their house before, a lot of times they want to know, well, “What happens if I have to evict my tenant?” And so…

Matthew: Or we even get a lot of owners that their tenant’s in the eviction process and they want to know “Hey, I put this person in. You know, give me an idea of how long that’s going to take to get this person out.” And so this video, you know, if you’re in this process right now, I mean, this video ought to help you kind of understand the process.

Spencer: Yeah, absolutely. And just to let you know states are different, right? So different states are different. We’re going to specifically be talking about Alabama.

Matthew: And even more specifically, about Jefferson County, Alabama.

Spencer: That’s right, yep.

Matthew: Which is where we have the most experience where Birmingham, pretty much the majority of Birmingham’s located. We have Jefferson County, Alabama then Shelby County. And to some degree, this applies to Shelby County, too.

Spencer: So start us off with a quick story.

Matthew: So even though I’m a property manager, my mom actually had a rental house and she didn’t use her own son as a property manager.

Spencer: A lot of confidence in you.

Matthew: Yeah right, in my own home. But she basically rented to an attorney. And this is a really nice area. It’s in Vestavia Hills. She rented to an attorney and his wife’s a stewardess.

So it was one of those things. They had great paying jobs. She thought everything was going to be great. My mom would underwrite applications just based on her gut feeling, how she would feel about the people.

Spencer: Mistake number 1.

Matthew: Yeah right. Which should be the lesson here, right? But basically she got into it and the attorney moved in, gave the security deposit and the first month’s rent and almost never paid again. And so she got me involved.

And so I know firsthand how emotional that can be when, you know, my mom, she didn’t necessarily need the money but it was very important to her. It was a lot of money for her and she obviously had a corresponding mortgage with it.

So this can happen to anybody. It even happened to my mom. So this is a subject I don’t like to talk about, it’s certainly not a fun subject to talk about. But it’s something that does happen.

Spencer: It’s necessary for this business. So if you rent houses long enough, this is a scenario that you will run into sooner or later. So let’s start. And I want to kind of start. I want to kind of paint the picture.

Here at, we have a very processed out collections process that we walk through. So it’s very disciplined. We follow it every single week but sometimes people get behind, they stop corresponding with us, they don’t return emails, they don’t call us, we try to reach out to them. So I want to fast forward us to that point.

Matthew: And this even happens with good people. I mean, people lose their jobs, people have medical expenses. And sometimes it’s not that they don’t want to pay but it’s also their problems should not become your problem. And so that happens a lot.

Spencer: So let’s start with it’s time to start the eviction process.

Matthew: So the eviction process actually starts with posting a notice. And so there’s really two things in Alabama landlord-tenant law that you can evict for.

  1. One is for material breach, which means there’s something in the lease that they’re doing wrong that’s not rent. Which, rent is the second. So material breach would be like they destroyed the house, they have too many dogs, they’re punching holes in the wall. Those types of things are a material breach.
  2. And then rent is obviously the second and that’s pretty obvious. That’s what we typically evict 95% of our tenets for. And so the notice is different for each. So that’s very important. It used to be that the material breach was a 14-day notice. Now both of the notices are a seven-day notice. So basically, what you’re essentially doing is putting a notice on the door and saying that you’re in violation of the lease.

Spencer: What’s really rough is I had my own personal. When I was managing my own property. My very first eviction, they stopped paying. And so it was a breach of nonpayment. And I went up there to the house, I knocked on the door and it seemed like 20 or 30 dogs started barking inside the house. So it totally destroyed my house. So it’s not good if you have to do it for both, but you can. I could have put either letter on the door

Matthew: Right. Or both. And we have put both on the door. So basically, what happens, ideally what happens is you give them this seven-day notice to cure. And they have to cure that breach in seven days. If they don’t cure the breach in seven days, on the eighth day, that is basically when you can file a lawsuit against them to get them out.

Spencer: I would imagine that there are attorneys that you would just contact.

Matthew: Yeah and it’s probably something we ought to say. Hey, we’re not attorneys so we highly suggest…you know, even though I told my wife I was gonna be an attorney, I’m not one.

I highly suggest verifying all this information with an attorney. But yeah, so at that point, if there’s an LLC or a company on the lease, you’re actually required to have an attorney, would take over at that point.

If you are an individual on the lease, you can actually do this yourself. And the people at Jefferson County courthouse are pretty helpful getting that started. So basically, what you would do is you’d go down and you’d file this lawsuit. And at this point, most of the attorneys that do this would actually charge you the full amount for the eviction. And those are in the hundreds of dollars and can range from attorney to attorney, but you also have to pay the filing fee. So you’re going to go down there and the filing fees are all based on the number of occupants on the lease. So you’re basically filing this lawsuit against them.

Spencer: What would you say the average cost…basically, based on your experience in the business, what’s the average cost to evict somebody?

Matthew: What we tell our clients is that it’s going to be somewhere between $800-900. And we have a very reputable firm that handles that for us here in town.

Spencer: And so how long does that…you tell them 800 or 900 dollars. But then also, I’m imagining there’s going to be a loss of income, loss of rental income. So what is that all…?

Matthew: Well, I’ve heard some really amazing stories. People in Texas, people in Tennessee, that this is only a thirty day, you know, from the time the notice is posted till the time the person’s out.

That’s just not the case here in Alabama. What we tell our clients is to expect 90 days. From the time we post the notice until the time…and it has gone further than that. I mean, sometimes it’s a little less. So you know, it’s a long time in Alabama until the set-out.

Basically, after the lawsuit’s filed then, it’s presented to the tenant and they’re given a chance to answer. I would say the majority of tenants don’t answer. I mean, they know they’re in violation. But there are some tenants that understand the process and they know that if they answer then they get their day in court and that basically extends the process out.

So I would say 80%…this is just a guess. 80% of the tenets don’t answer but the other 20% file some sort of answer and then a trial is set at that point. The trial is not anything to be scared of, though.

It’s a very simple process. It’s not like Matlock or one of those things you see. It doesn’t span days; it literally could go 15 minutes. But I will tell you the majority of tenants don’t show up at trial because they know they’re going to lose. And the last thing they want to do is be embarrassed in front of a crowd.

But I would say there’s 80% that doesn’t answer, and then after that, the next 10-15%, only 5% total will go all the way to trial and actually show up at trial. So one in twenty who you’ll actually have to try. It’s been our experience.

If I’m a homeowner, what do I need to bring to trial?

Matthew: Yeah. So that’s very important. You want to bring pictures, you want to bring an application, tenant register, you want to bring everything you have.

Spencer: The lease.

Matthew: Yeah, absolutely. You want to bring everything you have that may be presented as evidence. Like, hey, this is what they were supposed to pay.

You also want to bring a copy of the notice that you put on the door. It’s very important that the notice is correct that was put on the door. So it’s a very simplistic process but you need to make sure that you get it right. Because the last thing you want to do is show up at court, not have your stuff together, and lose. And then have to start the process over again, which does happen.

Spencer: That would be unfortunate.

Matthew: That would be really unfortunate. So let’s just say you go to trial, worst case scenario, you win. If they don’t show up, you get a judgment in you favor anyways, you win. Well, then the next step is the sheriff has to set the tenant out.

And that could take awhile in Jefferson County. You know, it’s understaffed, undermanned, that area. That is included in that 90 day period. But we’ve had them take 30, we’ve had them take 60 days. A lot of it depends on the season of the year. So just be prepared for a long drawn-out process.

Spencer: Does the sheriff give you a notice? Like, hey we’re going to be there this day and this is when we’re going to set them out? Because I would imagine as a homeowner, I would want to be there to take over possession of that house and make sure I change the locks, those types of things.

Matthew: Yeah, I don’t know the answer to that for a homeowner. But I can tell you the sheriff does give our attorney a heads up that it’s happening. And then our attorney gives us a heads up that it’s happening.

So it does go with us. I don’t know exactly how they contact the homeowner. One thing I would say which is very important, so hopefully you don’t get into this.

But particularly in Jefferson County, it’s going to be a lot cheaper to figure out a better solution. And I’m not talking about a legal solution, or taking their front door off the hinges. But it’s going to be cheaper and quicker to figure out another solution. Some of the things we’ve done in the past are cash for keys.

What is cash for keys?

Matthew: Cash for keys is for us is saying “Hey look, we know that you lost your job. And obviously, you can’t pay. But one of the things that we want to do is give you this money in exchange for the keys.”

To some degree, you have to swallow your pride. To some degree, you can kind of feel like they’re taking advantage of the situation. But this really comes down to a business decision. It’s very important that you look at this objectively as I’m trying to get the most money in the door for myself.

And sometimes that’s swallowing your pride and giving them some sort of peace offering to get out of your house. So I think that’s very important for you to understand that that’s a possibility.

Spencer: OK. What else?

Matthew: The only thing I would say is just reiterate how important it is to get the process right. Again, this is probably everybody’s biggest fear. It’s not fun but it’s something that you can do. And it’s something, if you can’t do it or want some help, I mean certainly we’re willing to help you through that process.

Spencer: And I would just reiterate the incredible importance to tenant underwriting. Again, life happens, circumstances happen, job loss, those types of things.

But you could mitigate a lot of your risk if you do a fair amount of underwriting on the front end, tenant screening on the front end. Take you time, find the best tenant you possibly can. I know we’ve written a lot of articles about that. So feel free to check those out. Anything else?

Matthew: No, I think we’re good.

Spencer: Alright. Thanks for joining.

How To Collect Rent From Your Tenants

Matthew Whitaker - Thursday, February 4, 2016

How To Collect Rent From Your Tenant

We get asked “How do you collect rent from tenants?” all the time from homeowners who are considering gkhouses as their Birmingham, Nashville, Chattanooga, or Little Rock Property managers.

Collecting rent from tenants is extremely important and the only way to do this successfully is to have a system.

We actually believe that light and steady pressure is better than “Hey, where’s my rent, it’s the 10th and I haven’t seen it.”

I was able to sit down with Daniel Gable the other day and interview him about our tenant collection process. Here’s a transcript of that conversation:

Spencer: All right, I’m here with Daniel Gable.

It’s January 18, 2016, and today we’re going to discuss the gkhouses collection process. So, this is something that is extremely important to the property management business and for anyone who owns rental property, whether you have one house that used to be your personal house that you’re renting out, or whether you’re an investor and you have 10 or 15 houses, collections is really the lifeblood your business.

So, I can remember how I first realized this. It was the very first time I owned any kind of rental property.

I was buying and selling houses here in Birmingham as a HomeVestors franchisee, and I bought a 10-house package from another investor. And of course, I had driven a lot of houses, I had done all this stuff, but I was pretty young and pretty naïve.

But I knew that rent was due on the first, late after the fifth, according to the leases that they had signed. And when it came time to collect rent, I had already sent out letters to everybody. I think maybe 5 of the 10 came and paid rent. So I thought, “Well, I guess it means I’ve got to go and knock on some doors.”

And so the very first house I went to…I remember the street, it was on 15th Street (I no longer own the house).

I pulled up to the house, and I went to put a letter on the door and on the front porch were two gigantic pit bulls. And so I looked at the pit bulls. They looked at me. I didn’t think that it would be a good meeting if I went up on the deck. So, instead, I turned around and drove away, and proceeded to mail them another letter.

So that was my very first experience collecting rent from a delinquent tenant. And it’s not the best-case scenario. I’ve learned a lot since then. That was back in, I want to say back in 2005, and so it’s been 11 years since then.

And the great thing about what we’re doing here at gkhouses is we have specialized departments that handle different aspects of our business.

daniel_gableDaniel is here with me because he is one of our operations coordinators, and his day-to-day task involves communicating with tenants. And you can imagine if we have 800 tenants then that is quite a task. And he stays busy all of the time.

So, what I’m going to ask him to do is walk us through how we collect our rent. And then I’m going to ask Daniel to take us a step further, what happens if a tenant doesn’t pay, because a lot of people want to know that.

So, if a tenant has signed on a gk lease, rent is due on the first. It’s late after the third. And by the first of the month, every tenant has already received some type of notification that rent is due.

And so that’s a either a letter mailed to their house or an email. Essentially it’s just a statement. It’s a reminder…just a touch from us saying, “Hey, Dear Tenant, Hope everything is going well at your house. Just a reminder rent is due. Here’s the amount. It’s due on the first, late after the third.” It’s really just a friendly reminder. It’s either a letter or it could be an email.

And so they get that notification, and when it rolls around the first of the month, we have drop boxes outside, right here on the door. Tenants can pay any time. We have a number of tenants who pay electronically online or have it automatic drafted.

But there are some instances where tenants are late, and if you’ve owned rental property for any amount of time, you realize this is just a part of the business. It doesn’t mean tenants are bad. It doesn’t really mean that you’ve done a bad job. This is just a part of the business.

And so Daniel not only communicates with our tenants, whether they have questions about certain things or need his help in certain areas. But he also really manages our entire collections process.

And so Daniel, I’m going to let you talk now, and just take us through. Let’s just say today is the 10th of January and a certain tenant didn’t pay rent. Take us through the collections process and what happens.

Daniel: I couldn’t agree with you more when it comes to monies not received. This doesn’t mean tenants are bad. This doesn’t mean you’ve done a bad job. That’s completely correct. Life happens.

And I actually tailored our collections process in order with that understanding in mind. The very first touch you get outside of just that normal statement would be our first green bucket. I broke them down into buckets.

The Green Bucket

The first green bucket would be a kind of just a very friendly, warm reminder that rent is due and is late. It’s almost like I assumed that they didn’t know that they had missed the payment.

It is more along the lines of, “Tenant, I hate to tell you this, but we have not received your rent payment.” And they’ll get this in the form of an email. And they’ll also get this in the form of a pre-recorded message sent to all of their phone numbers…we send out once a week on Fridays.

phone red flat icon telephone sign


So it’s going to be a phone call as well as an email, both of which say the same thing. It directs them to email us back and communicate back with us. But it just lets them know the exact amount that is owed, plus the late fee. And that’s within the first 30 days.

Spencer: And when does this happen. So due on the first, late after the third, when does that first reminder go out?

Daniel: The first reminder will go out the following Tuesday.

I receive a Collections Report, and it breaks down everyone by buckets. The first bucket is within the first 30 days of that payment being delinquent.

The Yellow Bucket

If this hypothetical person let payment lapse past that 30-days they would fall into a yellow bucket, which is between a month and a month and a half.

And this is based off the percentage rent that is due. So if they owe anything below $700 they’re going to be in the green bucket, but the moment that it tips over owing that amount, it will push them into the yellow and the orange and/or the red bucket.

The yellow and the orange are similar but different.

The yellow is a little harsher reminder. We’ve already touched them once with a friendly and now we believe they’re intentionally not paying and they know this but have not communicated with us.

So this is more of a “Hey, we’ve not heard from you. And I would hate to have to move forward with posting a notice of eviction.”

The Orange Bucket

In the orange bucket, which is between a month and a half and two months, owed. That’s when it’s stated that if we don’t hear from you, you’re going to receive a notice of eviction on your door, and we will move forward if this continues.

Spencer: Okay, so at this point, it’s really a matter of communication.

Like, we want to hear from you. Whether you call us and say, “Hey, I’m sorry, I got behind. I want to start making it up,” or whatever. We’re really looking for some type of communication. So to move them into the orange bucket it means they haven’t communicated with us.

Daniel: It means that their balance is worthy of being in that bucket, and it also means that there’s been no communication.

Business People Man and Woman Talking Discussing Chat Communication Flat Vector Illustration

And I tell tenants all the time, communication is almost as important as the payment. If I know you’re behind, and I know that you’re willing to move forward, I will help you set up a payment plan.

And then I created a bucket specifically for people who have communicated with me, that have a payment plan and are actively working toward getting down to a zero balance.

And I actually will color them in a different bucket so that they get a completely different email. It’s not threatening. It actually is very appreciative.

It’s intentionally supportive and positive reinforcing. “Thank you for your payment arrangement. Please understand that communication is important. And I expect to hear from you this week,”

It’s really just a reinforcement of that correct attitude coming toward us.

The Red Bucket

So, in the event that there is no communication, then they fall into what’s called a red bucket. And anything that is left in that bucket gets sent an email saying, “Unfortunately, either due to either a breaking of a payment arrangement, lack of payment, or lack of communication, we’re going to be posting a notice of eviction on your door. And this notice gives us legal right to send you to the attorney within seven days.”

Spencer: Are they receiving phone calls these times as well?

Close up of the fingers of a business adviser dialing out on a land line telephone pressing the number keys on the keypad in a communications concept.

Daniel: Each bucket receives…the green, the yellow, and the orange all receive one phone call a week. Once you fall into the red bucket, you’re receiving four phone calls a week. You’re actually going to be receiving them at periodic times throughout the week. And it’s just a constant reminder. It’s just letting them know that they’re one step closer to eviction.

Once we’ve either posted notice or just before, we contact the owner of the home and let them know the tenant’s current balance.

Unfortunately, if we must go through that process of eviction it roughly costs around $850…sometimes as much as $1,500 depending on the circumstances.

And that typically takes around 90 days in Alabama.

Spencer: Okay, I remember the first time that ever started collecting a lot of rent.

I didn’t have a system at all. Instead I would call all of my tenants and mail them letters.

I had no system…so the system we have here at is great.

But I’ll never forget the one house that I actually had to go through the full turn of eviction. It wasn’t a pleasant thing, because not only had they not paid for 3 months before I finally decided to evict them, but they didn’t pay the other 90 days.

And the sheriff actually came and put their stuff on the street. And it’s just not very good, because typically the house is not left in a very good state. And it cost me several thousand dollars to get that house back up and running.

Daniel: That’s why we start this process well before we ever get to that point. By the time…if someone has to go all the way through that process of eviction, we will have sent them over 100 emails, or there would have been over 100 touches, between emails, phone calls and physical letters.

The good news is that most of the time, people want to pay, and that’s the good thing. And that’s the reason we don’t start off with accusing them of being delinquent.

Carrying off. Pleasant youthful lady sitting cross-legged with opened mouth and pointing up with her arm on isolated background.

That’s the reason we start off very warm and very understanding of their situation, because again, life happens and we understand life happens.

And we’re very willing to work with someone who is willing to communicate that with us and create a payment plan. We have found great success with that. We have…I think our eviction is less than 1% of what we actually manage currently. And so that’s…I think that’s a phenomenal average.

I would say that our biggest collections success comes from assuming that people want to pay versus the opposite.

Coming at it from a very positive standpoint, assuming their best intentions until proven otherwise, I think just treating people the way you want to be treated is probably the best way to receive rent on time.

Spencer: What percentage, do you think, get caught up and back on track, versus, “Hey, it didn’t work out.” They either moved or they got evicted?

Daniel: I would say over 50% of them get caught all the way back up to zero. Some of them stay behind until they move out and then get on a payment plan to pay it off.

And then others have to be sent to collections, but the debt is much smaller and the owner doesn’t take on the debt of having to evict them.

So any time that we can get away from having to send someone to the attorney and save that $850 is always a better solution.

Spencer: And just a side note, we actually offer what we call an eviction protection plan for owners. It’s a part of a new Gold Package we are rolling out for homeowners.

The Gold Package not only includes the Eviction Protection Plan, but also a quarterly inspection/HVAC service and gutter cleaning once a year.

The entire package is a great value and covers an owner for all of the attorney fees, court costs, admin fees, and Sheriff set-out costs involved in an eviction.

And should your tenant go to a full eviction, it’s totally covered. And like Daniel said, the minimum is around $850. It can go up to $1,200, $1,500 for an eviction.

Daniel: Absolutely. I think it’s well worth the money.

Spencer: And I think this is good because when you’re a homeowner and you’re renting your house, or whether you’re an investor and you’ve bought a few houses and you’re managing those properties and you’re the one collecting, it tends to be more personal.

And so, it’s harder to be as objective as we can be, as we manage a bigger portfolio, so everyone goes through the same process. And like Daniel said, over 50% end up getting caught up, just because of life circumstances happened or whatever the case. So great overview of that process, Daniel. Thanks so much.

Daniel: Any time.

What Happens When A Section 8 Tenant Wants To Move?

Spencer Sutton - Tuesday, February 2, 2016

section-8-move-out-houseI had the opportunity to spend some time in the field with two of our property managers (Wayne McGinnis and Mark Byers) as they performed a Section 8 Move Out Inspection.

This happens when a Section 8 tenant puts notice in that they would like to move.

Moving is a normal part of managing rental property…but because a tenant is in the Section 8 program, they must follow certain rules and regulations.

The following is the transcript of an interview I conducted in the car with Wayne McGinnis who happens to be an ex-Section 8 Inspector with the Birmingham Housing Authority.

Spencer: Now, Wayne and Mark are two of our property managers. And we’re out looking at some different houses. I wanted to come along with them today because they were conducting a Section 8 pre-move out inspection…or what we call ‘walk through’.

So about a week ago one of our Section 8 tenants put in a notice that she would like to move. In order for that to happen, we need to inspect the property and sign off that this tenant is good to move.

In other words that the house is in a good condition or satisfactory condition and we’re okay with them moving.

So, walking through the house was really interesting.

We couldn’t really film inside the house but I wanted to tell you a little bit about that process and I’ll ask Wayne to fill in wherever I may need his expert opinion.

Here is the process:

  1. The tenant turns in a move out notice
  2. We schedule a time to walk through the property
  3. We look for any damage to the house that is out of the ordinary or beyond normal ‘wear and tear’
  4. We inform the tenant on our findings and let them know if we can or can’t sign off on their move

In this case the tenant filled out a notice to move and it was sent to us. We went out there and Wayne walked the entire house with a pen and a paper in order to make note of any out of the ordinary damage. Really, he’s looking for r any kind of issues with the home that are beyond normal wear and tear.

Is that right, Wayne?

Wayne: Yes

Spencer: As we were walking through this particular house, we noticed a few holes in the wall. We also noticed that the carpet that was clean when they moved in, just around 12 months ago, was damaged.

Wayne: It was worn well beyond normal wear and tear and it was clean and in good condition when they moved in a year ago. Simply put, it’s not been taken care of.

So that would be something they would be charged off for beyond normal wear and tear issues.

Spencer: Okay. So, we walked through the house and not only were there a few holes in the wall, there were light fixtures that were missing.

They had also replaced an interior door in the home and had not installed a doorknob. So it wasn’t really a door because you couldn’t lock it.

And then of course the carpet like Wayne mentioned, the carpet was a bit messed up more than normal wear and tear. After we walked through the house we had a conversation with the tenant and let her know that we could not approve her request to move until these things were taken care of.

And so what that means is, she can either find a reputable company to fix and repair those damaged areas and then we would sign off on it. Or she could have us do it and pay gkhoues for the repairs.

We have our own maintenance department to repair those things. Is there another option? So we either fix it, she finds somebody to fix it, or she made a suggestion. What was that, Wayne?

Wayne: She asked that we create an itemized estimate of everything that we saw that was beyond normal and tear.

And we can definitely do that but we couldn’t do it today because she had too much in the house and against the walls. She will need to move everything to the center of the room (in all of the rooms). So, in our owner’s best interest, we have to be able to see those areas and make sure there’s no further damage.

Because once we do this itemized estimate, we will be sending it to Section 8 as well as the tenant and letting them know that these repair items need to either be paid for or completed before we can approve her to move out of the house. She must have a zero balance before she can move.

Part of paying for the damage can also come out of her security deposit which we keep in a trust account.

We just want to make sure we have the money to cover all the repairs that are beyond normal wear and tear. Now, there’s a lot of things that were normal wear and tear or things that were not in her control that we will not be adding to the list.

But for the items we just mentioned, we’re going charge her and turn that list into Section 8 so that she cannot move until this is taken care of and resolved. This is something we do to protect our owners.

Spencer: Right, so essentially she wanted us to come back with an estimate of all things were over normal wear and tear and then she was going to pay for that work to be done.

Now, the interesting thing is once we have those funds…if she wanted to pay us to do that once we had those funds, we could go ahead and sign off on her move documents for Section 8 and allow her to move and then it would much easier for us get in and take care of those items along with anything else that the owner wanted to take care before the house was marketed again.

So that’s just a little insight into Birmingham Section 8, how a Section 8 move, like a request to move process happens.

Where To Buy Rental Properties in Birmingham, AL (VIDEO part 5 of 5)

Spencer Sutton - Monday, January 25, 2016


Over the past couple of weeks we’ve walked through some of the best areas to buy rental houses in Birmingham.

Today we conclude this 5 Part Video Series with a look at Pleasant Grove and Hueytown. These are two of the less well-known rental areas but have some great opportunity for the patient and persistent investor.

Matthew interviews Bryan Miles, a long time investor (bought and sold over 400 houses) in the Birmingham market and someone understands these areas well.

Where to Buy Rental Houses in Birmingham AL (part 5 of 5)

Birmingham rental real estate is extremely diverse and offers a little bit of everything for investors. In this last video of our five part series on where to buy rental houses in Birmingham, AL, Matt…

Check out this video and if you would like other resources (either for the investor or accidental landlord), check out our ebooks and other videos designed to help anyone in any stage of the rental market.

Where To Buy Rental Properties In Birmingham, AL (VIDEO part 4 of 5)

Spencer Sutton - Wednesday, January 20, 2016

As a property manager in Birmingham, AL we help all kinds of owners in their search for the right rental house.

In this video Matthew and I are going to share about one of the most popular areas for local or out of state investors to buy rental property.

It’s a popular area for several reasons:

  1. You can buy houses wholesale for $2,000 to $20,000
  2. It’s a high Section 8 rental area
  3. The potential for a high return on investment is greater than other areas of Birmingham

While this is the case, we’ll walk you through the potential hazards with buying property in these areas as well.

The bottom line is that you need to DO YOUR HOMEWORK and factor in the possible risks when buying houses in low to moderate income areas.

It’s a lesson Matthew and I have learned all to well over the years…so there’s no reason for you to learn those lessons the hard way!


Where To Buy Rental Houses In Birmingham, AL (part 4 of 5)

We started our real estate career buying and selling houses in the easter part of town. Now that we’re a Birmingham Property Management company, we get to see where hundreds of other investors buy and…

Safety Tips – Hot Water Heaters and Your Tenants

Spencer Sutton - Monday, January 18, 2016

I had the opportunity to be out in the field with Wayne McGinnis the other day and as we were talking through a rental house I noticed that he was examining the hot water heater.

I asked him to explain to me (while I filmed him) what he looks for when it comes to hot water heaters and why it’s so important.

Here’s the video and below you’ll find the transcript of our conversation.

Safety Precautions for Your Hot Water Heater

This video is about Safety Precautions for Your Hot Water Heater


Interviewer: Okay, I’m here with Wayne McGuiness. And I asked Wayne to tell me what he looks for when he looks at a hot water heater just to make sure that it’s safe for a tenant to move in a house. And so Wayne’s going to tell us all a little bit about hot water heaters, and the potential hazard or danger with them.

Wayne: All right. Today we’re looking at an electric hot water heater that has been installed properly. We’ve got a connection here at the junction box that can’t be pulled out.

We also have a connection here at the junction in the top of the water heater that cannot be pulled out, which is good, because a lot of times, maintenance guys would just run a regular wire down through here with no coax or anything. Which is fine, as long as it’s clamped on both ends. But a lot of times, you will see that they’ll run it through the hole in this plate, and it’ll just be loose.

Well, the problem there is that if a kid comes in or somebody else, and they jiggle that line and it pops loose, this whole water heater can split down the middle and be electrically charged.

So just imagine throwing a hairdryer in this much water. So we’ve got roughly 55 gallons of water to 60 gallons of water that would be charged with electricity. So if the child happened to be touching this and pulled that, that would be the end of it. There would be no recovery from that kind of electrical shock.

That would be almost be the equivalent of reaching up and grabbing a power line.

I know, particularly, of a maintenance man who was working on one that was smaller. And he touched the wire like that and pulled on it just a little bit, and it flashed, and the whole thing charged and split the water heater all the way down the middle, and blew him back.

And he could have been seriously hurt had he been touching the water heater at the same time. We also want to make sure that, especially on electric hot water heaters, we have these plates with screws in them.

A lot of times, guys will try to get away with just putting one and leaving the bottom one open. Well, inside each and every one of these compartments are live electrical wires. So if a child happens to be playing and he just swivels that out and sticks his hand in it, then, again, we’ve got live wires that they can grab hold of.

The third thing that we look for is a discharge line. This is a temperature and pressure release valve. What this is used for is that if this tank gets too hot and this water boils too hot, before this explodes, it will discharge water out through this line. Or if there’s too much water pressure on this hot water heater, this will pop. And when it pops, it will drain through here before it explodes, basically.

We’d like this to be run down six inches from the floor. The best practice is what this owner has done, which is perfect, and he has run it through the floor. Because, again, if it does pop off, which happens often, you don’t really want your whole floor covered in water. If you can get it outside of the unit or into the crawl space, that’s the best thing for you.

Where To Buy Rental Properties In Birmingham, AL (VIDEO part 3 of 5)

Spencer Sutton - Friday, January 15, 2016

Today we’re talking about southern Jefferson County and norther Shelby County as a tremendous rental opportunity for the right investor.

We’ll highlight which areas are popular, the kinds of houses you can buy, the tenant profile, and average rent in these areas.

Where To Buy Rental Houses In Birmingham, AL (part 3 of 5)

Matthew and Spencer discuss buying rental property in a growing area of Birmingham. This is an area that was developed later in Birmingham’s history and has grown substantially the past 20 years.

Where To Buy Rental Houses In Birmingham, AL (VIDEO part 2 of 5)

Spencer Sutton - Wednesday, January 13, 2016

Here is Matthew explaining why the Forestdale/Adamsville area is one of the best areas to buy rental property in Birmingham.

If you’re not following us on Periscope, go ahead and download the app. We’ll be filming live broadcasts that won’t necessarily all make it to our blog. Also, because it’s live there are some mistakes that might make you laugh…all at our expense.

Where to buy rental houses in Birmingham, AL (part 2 of 5)

This is part two of a five part series on best places to buy rental houses in Birmingham, AL. If you’re an investor interested in the Birmingham rental market, you’ll want to know more about these ar…

Should I Buy This Rental House? Episode 001

Matthew Whitaker - Wednesday, January 13, 2016

Should I Buy This Rental House?

This is a question we get a lot at gkhouses.

And that’s OK considering we manage over 1,100 houses and we started as investors ourselves.

Back in 2003 to 2004 we were asking the same questions. We were buying and selling houses wholesale and ended up keeping a handful of rentals during those early days.

To help give some insight and maybe some guidelines into what you should or shouldn’t buy we thought that a short video series might be beneficial for owners/investors.

You can catch these videos streaming live if you have the Periscope app….but if you want to catch them on our site, we’ll have edited out all of the live blunders!

We hope you enjoy and let us know if there are particular areas of town you’d like for us to spotlight.

Should I Buy This Rental House? Episode 001

We’re a professional property manager is Birmingham, AL where we manage over 1,100 houses around town. We have a lot of investors who buy rental houses in Birmingham and our ‘Should I Buy This Rental…

Where To Buy Rental Houses In Birmingham, AL (VIDEO part 1 of 5)

Spencer Sutton - Monday, January 11, 2016

So…where should you buy rental houses in Birmingham?


We receive calls from investors all the time asking about different areas of Birmingham. They’re trying to figure out exactly where they should buy rental houses for a long term strategy.

In this latest Periscope video, Matthew and I will talk about one area we believe should be on every investor’s list. It’s an area we have a lot of experience in (we manage around 250 properties here).

Before you watch this video just know that so much about where you buy depends on your goals and your risk tolerance. Usually, when there’s a greater potential for return on your investment, it will come with some extra risk.

In this video we won’t be discussing this aspect (goals/risk) of buying rental houses in Birmingham. Instead we’ll talk about what we believe to be the five best areas to buy and hold based on our own experience and the experience of our owners.

If you haven’t yet, download the Periscope app and follow us at gkhouses to see live broadcasts each week….each broadcast is only available for 24 hours so make sure you turn on the notifications.

Where to buy rental houses in Birmingham, AL (part 1 of 5)

In this short video we filmed on Periscope we’re going over where to buy rentals in Birmingham, Alabama. This is part 1 of a 5 part series we’ll be shooting on Periscope and then uploading to gkhouse…

Celebrate The Tenant (VIDEO)

Spencer Sutton - Friday, January 8, 2016

In this week’s Periscope broadcast, we discuss our 2016 initiative called ‘Celebrate the Tenant’ and the positive impact we expect to see with our tenants and our owners. Watch the video and share your thoughts!

Celebrate the Tenant

Well…we’ve taken to Periscope (an Android and Apple app) to share our insights, challenges, and lessons learned from managing 1,100 houses. Periscope allows us to shoot live video (completely unedi…