Tony Robinson:
Want to make more passive income? Look, investors get into real estate for financial freedom, not to be attached to their rentals at the hip. If you’re constantly answering the phone, coordinating repairs, chasing rents, putting out fires, you don’t really have control over your time. You just have another job.

Ashley Kehr:
Thankfully, there are ways to make your rentals significantly more hands-off. While no rental property is 100% passive, you can get pretty close with the right tools, systems, and processes, giving you more time, flexibility, and freedom to do the things that you actually want to do.

Tony Robinson:
Today, we’re breaking down through eight different strategies, how to make your rental portfolio work for you instead of the other way around, because the goal isn’t just to have more rentals, it’s to build a portfolio that helps you live life on your own terms.

Ashley Kehr:
This is the Real Estate Rookie Podcast. I’m Ashley Kerr.

Tony Robinson:
And I’m Tony J. Robinson. With that, let’s get into strategy number one, which is honestly one of the easiest ways to make your rental more passive, and it’s to hire a property manager. Now, I’m sure most of you understand what a property manager does, but for those that aren’t aware, there’s a few things they handle. They handle what happens before the tenant gets into your property, and they handle what happens after the tenant gets into your property. So before, they’re going to post a listing and market your place for people to actually find it. They’re going to screen all of the potential applicants to weed out the people who maybe aren’t going to be great fits based on income, criminal backgrounds, whatever it may be. They’re going to show the unit to the people that are potential good candidates. They’re going to create your leases and make sure that you’re compliant with local and state regulations.
They’re going to execute the lease and deliver it and hand over the keys and do the initial walkthrough. So everything that’s required to actually get someone into the unit, a good property manager will take care of. And then once the person’s actually inside, they take care of everything else, collecting the rent, an important one, dealing with maintenance issues, helping you understand maybe some things you should focus on from a preventative side, working with vendors to make sure that in between tenants, that someone’s taking care of the turnover that needs to happen. So really every element of working with a property manager means less work for you and you’re really just there to give approvals on the things that you need to give approvals for. But that is the lowest hanging fruit to make a rental more passive.

Ashley Kehr:
And I think too, Tony, your last statement there that you just said is kind of oversee things and give approvals on things. So some property management companies have it set where anything under $500, they can go ahead and do that maintenance item or make the repair, but anything over and needs your approval. So I think my biggest point is even though the property manager can do a lot of that day-to-day stuff for you, you still need to do asset management. You still need to oversee your property and you also need to oversee their operation that it’s working effectively and efficiently and your property is still performing well. So as we go through a lot of these tips, a lot of these aren’t going to be your solution to 100% passive that you never have to pay attention to it again today. These are just ways to get more passive than if you did everything yourself.
Tony, I think too, we should also highlight that some of these don’t even just apply to long-term rentals. A short-term rental, you can hire a co-host to actually manage your property like you would a property management company for your long-term rental. Yeah,

Tony Robinson:
100%. And really any strategy really. We have some investors that we’ve interviewed on the show that do assisted living, but they don’t actually manage the assisted living facilities themselves. They have people who manage it for them and they’re just like the NC that owns the real estate and they built the right structure, but someone else is actually running the business. So really across a lot of different strategies it can apply. But Ash, you brought up a good point that I just want to highlight quickly about property management versus asset management. And I’ll give a few examples so Ricky can see the difference. A property manager is going to take the maintenance request for the leaky faucet. The asset manager is going to say, “Well guys, this is the third time in the last 90 days we’ve had someone report the same leaky faucet. What do we need to do to actually repair this to make sure that doesn’t happen again?” The property manager is going to maybe make sure that the insurance is paid.
A good asset manager is going to say, “Well, hey, when have we last kind of shopped to get the best rates for insurance to make sure that it’s working correctly?” So the property manager is really there to focus on execution. As the asset manager, it’s all about strategy and reduction of costs and how do we make sure that we’re running efficiently and both of those things work together. And oftentimes property managers are really, really good at property management. They’re really good at quickly knocking out maintenance requests. They’re really good at making sure that things get solved. They’re less so focused on if we zoom out 30,000 foot view, are we actually solving the root cause of these issues and bringing the overall operational cost of the rental down? So you as the owner still have to make sure you’re wearing that hat. And me, I was a terrible client for my property managers because they would ask me questions and I wouldn’t get back to them fast enough.
So you still have to make sure that you’re involved to give them the resources and the guidance to take care of things the right way.

Ashley Kehr:
Now number two is purchasing a property that is turnkey or brand new. So we’ve done a couple episodes recently on new construction homes, and this would apply to that too, where you’re not going to be expecting a lot of maintenance to happen in the home because it’s freshly remodeled or it is a brand new property where things should be working correctly. So less maintenance calls is definitely less work for you when the property is more passive. Plus if you’re buying turnkey, usually you’re purchasing the property with a tenant that is in place that has already been screened, their credit check, background check, and they should qualify, have the good debt to income and be able to afford the property. So I think that having that all set up for you already, as much as we talk sometimes about inheriting tenants, sometimes it can be good, sometimes it can be bad.
I’ve definitely had both. Usually when you’re purchasing from a turnkey company, they have gone through the proper vetting process, or at least you hope so, and you can verify that with them as to what is your process to screen a tenant before actually signing a lease with them and moving them in to actually see if there’s anything that they are actually missing from that process is kind of a red flag. But if you’re just buying a property from some guy off the street that’s selling it on the MLS, you can also ask what their screening process was. You can ask for copy of the lease agreement. You can ask for if they’re current on rent, which in New York State at least, you put that onto the rent rider. When you sell a property, you’re putting on if they are current with their rent or not for the tenant.
But obviously people could not disclose that, could lie about that, things like that. So I would say turnkey, vet their process, but more likely you’re going to get a tenant that they’ve already got in for you. And that’s also one less thing you have to do as the landlord is do showings, take in applications, take the time to find someone to actually get the unit rented out. When you actually close on the property, it’s already somebody in place

Tony Robinson:
For you. Ash, do you have any in your portfolio brand new construction rentals?

Ashley Kehr:
No, I don’t. I

Tony Robinson:
Do, and I love them. I love them so much more than the properties that we purchased and we renovated because even the ones where we did renovations, none of them were truly down to the studs. So there’s still always some level of things that we have to go back and fix. And Sarah, my wife and I, we talked about this before. It’s like, man, if we could just have nothing but new construction, on the management side of things, things would be so much easier because there’s just less that happens in new construction. There’s just generally less things that break or go wrong with new construction. It’s our older properties where we tend to have that. So if you are someone who is looking for the passiveness, you can definitely increase that by simply buying something that’s new or building something and building to rent instead.
Number three is to invest in good tools and software. And again, this translates not just to long-term rentals, but across almost every asset class at this point, whether you’re doing short-term rentals, mid-term rentals, self-storage, even flipping for that matter. Almost all of the asset classes now have some level of software if you’re wholesaling, some level of software that’s going to help make you more efficient. And I think it’s the real estate investors who are still relying on, God forbid, pen and paper, but even just Excel spreadsheets and Google Docs, there’s so much software out there that can streamline and make more efficient a lot of the things that aren’t really exciting as a short-term rental or as a long-term rental, as a medium-term rental owner. I’ll give some examples on the short-term rental side. Ash, I’ll let you give some examples on the long-term rental side.
For short-term rentals, a super simple example is getting people into the property. Long, long, long ago, like 2018, a lot of short-term rentals, you still had to use a physical key to get inside. So when you booked the place, the host would say, “Hey, there’s a lockbox on the side of the house. You got to jiggle it this certain way to get it open and don’t forget to put the key back before you leave or else we’ll have to charge you.” Now, when someone books one of our properties, they immediately get sent a four-digit code and that four-digit code matches the last four digits of their own phone number, and they also get a backup code. So if their main code doesn’t work, they get a backup code, and that code is set to automatically activate on the day and time that they’re supposed to check in to their property, and it deactivates on the day and time they’re supposed to check out of their property.
And all of that happens with zero intervention or action on my part, but it’s because we set up the right systems, tools, and processes to make sure that those things happen automatically. What about on the long-term rental side? What’s a super low-hanging fruit that would take a lot of time that’s automated for you now?

Ashley Kehr:
I would say the easiest thing is maintenance request. Instead of getting maintenance requests texted to you or your tenant calling you and then you’re in the middle of doing something, you’re busy, that how easy to forget that he texted you and needs something repaired or taken care of at the property. Where a maintenance request, if you use a software, like I use TurboTenant, if you’re a BiggerPockets Pro member, you get rent ready for free. You can have it all the time just in your dashboard whenever they submit a maintenance request, the status of it. So if you’ve sent it to somebody, to a vendor to take care of, if it’s in progress or if you finished it. The thing I like the best about this is if issues happen later on down the road, it is so easy to go back and look at the history of this property to see what’s already been done or has this been fixed before.
So instead of scrolling back through text messages with a tenant that moved out a year ago to see what the problem was with this or how it was fixed last time, something like that, you have it all in one place. Like TurboTenant, they also have a maintenance AI now where when somebody submits a maintenance request, the AI will actually ask it more additional questions such as, or can you include photos? Where is it leaking? Is it an active leak? Different things like that because I’ve definitely got tenants that text me faucet leaking. Is it the kitchen? Is it bathroom? Is it gushing water? Is this a small drip? What is actually happening? Instead of me trying to take the time to troubleshoot all this and figure it out, the AI response. So I’d say maintenance requests, low hanging fruit, along with rent collection. You shouldn’t have to get the mail.
You shouldn’t have to get paper cuts opening the mail.You shouldn’t have to put deposit only on the back of your check. Yu shouldn’t have to enter it into any bookkeeping. You shouldn’t have to take it to the bank to deposit it. Of my 40 tenants, I think I have four that still mail me a check and that’s because they don’t have wifi, they don’t have smartphones, they just have no way of actually using a tenant portal. So I still get theirs every month. But other than that, rent is just paid. I don’t have to do anything to get it. Even if they don’t pay their rent, late notices are automated and sent to them that they’re past due. Late fees are automatically added. These are all things I used to do manually. I would have to send everyone an invoice that didn’t pay rent. When I manage a 40 unit apartment complex, print out the invoice, you’re late, here’s your late fee that’s due.
And it was so much work. So definitely getting some kind of software really helps automate and make your rentals a lot more passive.

Tony Robinson:
Ash, I love that you’re such a real estate mogul that you’re getting paper cuts from opening up all the rent checks coming in.

Ashley Kehr:
Oh God, I shouldn’t still probably have scars on my fingertips.

Tony Robinson:
All right, let’s talk about strategy number four and that’s to emphasize preventative maintenance. So I think we all understand Ash’s point, a maintenance request comes in and we go fix that thing. Preventative maintenance is the other side where can we service these things before something goes wrong to extend the life of what they look like? And Ash, you actually have, I believe, a proactive maintenance checklist that you created at some point, right?

Ashley Kehr:
Yeah. So basically here’s the things that need to be done. There’s really not anything monthly, but quarterly, bi-yearly, yearly, every couple years. One thing that I really want to get on my preventative maintenance schedule is power washing. Recently had a couple properties done for that and I cannot believe the difference that it made the property look. So I just want to keep up on that and then it’ll just be cheaper each time that I do it because I’m not waiting 10 years before I ever power wash it again. So that was just one new thing. But I think just having these things like if you have an air filter for your furnace, you have a furnace, making sure that it’s staying replaced because it’s just going to make the life of your furnace last even longer and less maintenance that you’ll have to do, hopefully will last longer before you have to replace it.
All of these little things can really add up the gutters, making sure the gutters are cleaned out so they’re not getting full and kicked in and then water is just running down the side of your house because the gutters are overflowing and then it’s going into your foundation and into your basement and just causing more issues. For setting these preventative maintenance, you’re probably thinking, well, actually this seems like I have to do more work. I have to do all of these things. But if you’re setting this stuff up in the long run, it’s actually going to be more beneficial for you and be less work you’re going to have to do because you already have these tasks kind of set up and organized instead of being reactive and like, oh my God, scrambling, I have to get someone in to do this or that. And then it becomes a bigger issue, trust me, will be way more at work for you.
So even if you’re not the person doing these things, can you set these ahead of time like calling an HVAC company and say, “Hey, every year I want just a tuneup on my hot water tank and my furnace, what would that cost to do it in this property? I have five properties, would you give me a discount if I do it on all five properties?” And you can just go ahead and set those up as recurring things that happen yearly where maybe they send you a reminder and just say, “Hey, just so you know, we’re headed out to the property and this time we’ve contacted your tenant, let them know and blah, blah, and moved on with your day.” So there’s a lot of things like that that you can do. What about on the short-term rental side? I would assume that you’re probably doing a lot of the same preventative maintenance, but it’s probably harder working around guest bookings that are coming in because at least a tenant I can say it’s one tenant I’m contacting and can say and not having to figure out who’s the actual guest at the property or waiting until there’s an opening.

Tony Robinson:
We do quarterly maintenance inspections across all of our properties and it’s at that time and they’re just scheduled. It’s like our maintenance team knows how to do them. We have virtual assistants that help schedule it so that they know when to schedule it. But to your point, that’s when we go through and we try and identify issues before they become a guest facing issue. So we’re retesting every single outlet. We’re checking all the appliances to make sure that they work. We’re doing the basic things like the aerial filters and we have mini split some of ours and there’s things we need to do there. We have tankless water heaters that need certain things done on a maintenance side. So we’re checking all the big things, but then we’re also double and triple checking all of the elements that a guest might interact with to see if there’s anything that’s broken there.
So just getting into that rhythm helps us identify things before they become a bigger issue. And to your point, Ash, proactivity is typically less time consuming than reactivity because if we can identify and fix it quickly, it’s a short thing. But if a guest calls it, now it’s impacting their stay, it becomes a bigger issue for us.

Ashley Kehr:
I also have a proactive maintenance recurring checklist. I don’t remember officially what it’s called, but you can go over to biggerpockets.com/resources and I’ll just give you a starting point of some of the things that I do at my properties. And I’ve even added more things that don’t even apply to my properties just in case you’re in another region or something where maybe there’s something you have on your property that I don’t have, but you can go ahead and use that as a template and kind of make it your own and add things on there and use that. The last thing that I kind of want to add here is, and this may be more, I guess it applies to both long-term and short-term rentals, but your amenities. So for me, I like properties that don’t really have common areas because as much as I’d love to say all the tenants that live there, you guys are responsible for keeping the common areas clean.
I don’t want disputes because someone says, “Oh, he came in with muddy boots and now I have to clean it because he didn’t clean it.” And I don’t like shared responsibility. I like either one person’s doing it or they’re not. And so I don’t like to have common areas. In one property, I do have a common area. I pay a cleaner to go in and clean the common area, but that’s an additional expense. Lawn care, unless it’s a single family home, I don’t want a big yard. I wanted a small yard. So either if I’m paying a tenant to mow the lawn or giving them a rent credit or I’m hiring someone, I want it small, manageable. I don’t want extravagant landscaping. It’s a single family home. I just have them take care of everything. So it’s a bigger yard that’s when they rent the place, they know that they have to maintain it.
So a lot of those things. But in short-term rentals, like Tony, you have hot tubs. What is the recurring maintenance? Do you think that there are some things that are better that can make your property more passive or even these things that require a lot of maintenance, are there ways to make them more passive, like cleaning of the hot tub and stuff?

Tony Robinson:
Yeah, to an extent. I mean, a lot of it comes down to people and systems. You create a system, you train people in the system and you hold them accountable to following the system or to the process. So for us, our system is that for the hot tubs, for example, every single one of our Airbnbs has a hot tub. And our process is that as part of the cleaner’s cleaning checklist, they have to take a photo of the hot tub and they have to put a testing strip in the hot tub water to show that it’s balanced the right way. So we get the visual to make sure that it’s clean and clear, and then we get the safety portion of like, “Hey, is it balanced correctly?” And if any of those fail, if the water’s cloudy or the test comes back as a fail, then our VAs know to then go reach out to our hot tub tech and try and get them out there that day.
And then if they can get it done before the guest checks in, awesome. If we feel like it might impact or happen after the guest checks in, we just notify the guest who’s coming in. Say like, “Hey, unfortunately, the last guest didn’t take the best care of the hot tub. Our tech’s going to be there. It’ll be shortly after you arrive. So just know for maybe the first hour or so you might not have access to the hot tub, but just know we’re working on getting them prepared for you.” So for us, it’s like, I don’t know if it’s necessarily more, it’s not necessarily preventing the issue because sometimes it’s unavoidable, but it’s if we have a very repeatable process in place, everyone is trained on that process and we hold all those folks accountable to that process. It makes it less of an issue when it does happen.
And I’m generally not even alerted now if those things do happen because the team just handles it.

Ashley Kehr:
Now number six is finding and screening tenants. So this can be a lot of work, not only just doing the showings, but going through each application, processing each application, figuring out what the screening and background report even mean. Are their documents actually legitimate or are they giving you fake pay stubs that they created through AI and handing those in? So I think if you have these proper systems and processes in place, it can be very streamlined and a lot smoother. First of all, if you have a property manager in place, they’re going to go ahead and take care of a lot of that for you. You could also hire a local real estate agent. In most states, you need to be a licensed real estate agent to actually lease an apartment. So there’s a lot of agents near me that charge a fee. I know I have used one that charged one month’s rent.
I’ve used another that charges a $500 flat fee, but also you want to make sure you understand what you are actually getting from them. Are they doing the screening themselves? What kind of screening are they doing? Is it a background check, a credit check? What does their application look like? Or are you providing that and they’re just doing the showings? When are they available for showings? How do they set up the showings? Is it just people calling them and saying, “I’d like to do a showing,” and they schedule it. Is there some kind of software they’re using where they put their availability and then they could show? So there’s a lot of ways to make this easy. I use TurboTenant for this also. RentReady also has this. Baseline has this. A lot of different companies have the screening software built right into them for property management software.
Baseline is a banking platform for real estate investors. So the screening, it walks you through. So the tenant will submit their application. A lot of these softwares have the application so you can change them. So you can put in your own questions and not just use their boilerplate template, but it’ll give you that. And then also walking through the screening. So once they fill out the application, it gives them the option to do the screening. You’ll get the reports from that, you’ll get their application, then you get their documents. You can see it all on your phone, on your computer. I think one of the hardest parts about being the actual person that’s doing the tenant screening, actually there’s two. One, making yourself available for showings and having to drive to your property, meet people there. You’ll be surprised the amount of people that don’t actually show up.
So sometimes I’ll do open houses where I’ll block it. If you want to come see the property, you can come from Saturday 10:00 AM to 11:00 AM, or you can come Sunday from 5:00 PM to 6:00 PM or something. And I do a couple of those open houses, people can show up or block it in 15 minute intervals and I try and do as many in a longer period window as I can in case people don’t show up, there’s other people that are hopefully coming. But besides making yourself available and giving up time to doing the showings, there’s also following the laws and regulations of actually putting in tenants in place. So making sure you’re following your state laws, you’re following fair housing laws to actually get somebody in place. There are so many scammers out there and I don’t know if scammers are like.
I’ve heard, and I don’t know that this is true, that there’s actually organizations that will pay people to message you about the unit you have for rent and to say, “Do you accept section eight and in New York State?” So making sure you are following all the rules and regulations in your area when you are doing those processes. All

Tony Robinson:
Right. Number seven is to automate. And we touched on this a little bit, but just if we separate the automation from the software itself, automation is just making sure that there’s triggers in place to make sure the things that should happen are actually happening. So as an example, in my short-term rental portfolio, I never have to text my cleaner on the days and times that she needs to be at a property to clean it because the way that we have our business set up is that as soon as a reservation is created, our cleaner gets notified, text and email. 24 hours before the checkout happens, they get a reminder, text and an email. She also has access to a calendar that shows all of the reservations that she’s assigned to. So she never has to question when or if she needs to be at a property.
It’s all handled automatically. Another example is we have noise monitoring devices inside of our properties, and if the noise is above a certain level for a certain period of time, our noise monitoring device automatically sends a message to our guests letting them know about the noise complaint. So anytime you can institute a trigger that happens automatically for these routine things, that’s how you reduce your own time involvement and make things more passive for yourselves.

Ashley Kehr:
And our last one, number eight, you hire a virtual assistant. So this tends to usually be cheaper than hiring someone that’s looking for a full-time job or at least part-time hours. A lot of times a virtual assistant is overseas where their wages are less than what you would pay for somebody in the US to actually be your assistant or perform a task. But a lot of virtual assistants, I mean, you could hire them and only use them one hour a week or on an as needed basis to fulfill some of these automations because you could say, “I only have two properties. I don’t have enough work to actually pay someone.” And that’s why the benefit of these virtual assistants that work for a bunch of different people have that availability to actually do your task. Now, Tony has virtual assistants that work for him a lot more than a couple hours a week.
I’ve had virtual assistants that worked over 40 hours a week for me. So it all depends on what you need or what you want. But a couple websites that you could go to is VPM is one, Virtual Property Management, I think it’s called, but it’s like vpm.com maybe. It’s virtual assistants specific to real estate investing. There is Upwork. What’s the other one, Tony?

Tony Robinson:
We use onlinejobs.ph quite a bit. Guys, I love virtual assistants and I think they’ve been one of the biggest unlocks in our own business who handle a lot of the important, but yet sometimes time-consuming tasks that come along with building a business. And our virtual assistants handle so much for us, so, so, so, so much for us. So it really is a win-win where we can give them great pay, remote work. We get much more affordable support, and both parties tend to win in that situation. And there’s a lot of questions that are like, “Well, how do you trust them? How do you train them?” And that’s a topic for an entirely different episode. But just know, you can get to a point where just like any other employee, just like any other team member, you give them an expectation, see if they meet that expectation, give them more responsibility, give them another expectation, see if they meet it, then give them more responsibility.
So we didn’t on day one give them the entire keys to the kingdom, but some of my VAs I’ve been working with for probably five years now, and over the course of those five years, we built trust and confidence in their ability to operate and now they handle so much. And it’s a beautiful thing guys, because now in a lot of situations, something breaks or something happens, and I don’t even hear about it until after it’s done. It’s been solved. My VA’s just like, “Hey Tony, here’s what happened. Here’s what I did. Just wanted to lip you in. Everything’s all good, but just though you should know.” And that is the ideal insight to be able to get to.

Ashley Kehr:
Well, thank you guys so much for joining us for this episode of Real Estate Rookie. I’m Ashley. He’s Tony, and we’ll see you guys on the next episode.