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The potential for failure is ever-present in any business. This can prove to be especially true when investing and renting in the real estate market. Today we are speaking with Trevor Steadman, who is the Portfolio Manager for Mynd Property Management in Reno. Trevor is here to give us his top three reasons investors have failed in the Reno market and help other investors avoid the same mistakes in the future.Steve Rozenberg: Hey, everyone. My name is Steve Rozenberg and I'm with Mynd Property Management and I'm joined today with Trevor Steadman who is the Portfolio Manager for the Reno Division of Mynd Property Management. Trevor, thanks for joining me today. I appreciate it.Trevor Steadman: Thank you, Steve. As always, love to be on your show here and working with Mynd in the Reno market.Steve Rozenberg: Thank you. So, as an investor, we all know that there's ups and downs and things happen. And we've talked in the past, we've done videos on how to be a successful investor, but I think it's important to understand, too, what do you think are the top three things that cause investors to fail in the Reno market?Trevor Steadman: Yeah, that's a great question and something that my clients, all the time, come to me and ask and say, what do I need to avoid? The first one I'm going to say, over-improving properties for their areas. As anyone knows in Reno, we have the Midtown, we have South Reno, Somerset, some of these big areas that are up-and-coming. And, sometimes, they're pouring money into properties that really over-improves the unit for what we can actually fetch rent-wise.Steve Rozenberg: Is that because they think that that's how it should be and that's how they would want it if they live there? Is that kind of the perception?Trevor Steadman: Yeah, it's more kind of an emotional tie. You know, we have some investors that come from the Bay or some other parts of the area where that's kind of what they expect but they need to realize that we still have the same tenant base here in Reno. That hasn't changed for the most part. And so, they'll put stuff in a property that won't allow them to get the highest rents that they should get for that property versus something located right in Downtown or Midtown that could afford that kind of leverage.Steve Rozenberg: That's normally coined a “white elephant” from investing terms, where it's basically, it's a great house, it's pretty, but it does not align with the market and it's way overpriced, and you'll never get it. And, unfortunately, I think what happens a lot of times is, and this may be something that's on your list, but they overprice it and now they're saying, “well, I need this much,” because now they’re in debt to it and they can't get it and then they hold out and then they don't get that much. And then, next thing you know, they’re in a bad financial position and, it kind of circles the drain, so to speak. So, tell me the second reason.Trevor Steadman: Yeah, and that actually goes right into my second point, not pricing the units correctly. You know, with all these improvements and people looking for higher rents throughout the town, we have to make sure the units are priced to move quickly and attract the right kind of residents. We have a lot of influx of people moving from out-of-state who maybe rent for a couple years, and then buy. We want to carve out a good portion of the rental market for people who are looking to rent for the next 2,3,4,5, 6 years and not just a 12-month and then have to rent it again. So, we have to price the property for the right resident, as well.Steve Rozenberg: And do you find that, when this happens, is it normally an upper-end property or mid-level? Is there a common theme that you see that this happens to take place in?Trevor Steadman: You know, typically we're sitting across all types of classes of property. But really, right now, the class C and the class B housing is where we're seeing a lot of these fudgy-ness in terms of pricing. And, unfortunately, the investors do get their number sometimes. So that's what's urging forward this kind of mindset where, you know, we have one investor who makes the mark, but then we have another investor who has three months of vacancy loss. So, we have to mitigate that for them and set real expectations.Steve Rozenberg: Yeah, I know, myself, as an investor, I used to be able to talk myself into the numbers all the time to make the deal make sense and that was the worst thing I could do because the numbers were clearly telling me what it was going to do. But, you know, I’d think, “well, if I make it look nicer and if I get that right tenant and this and that,” and I bumped it up 10, 15, 20% in my mind, thinking this is going to be a great return on my investment, and the reality was it's just not there, because the market bears what the market bears and that's a great lesson. It is what it is. And you can't change the neighborhood. You can't change the population of Reno because you made your house nicer. The population is the population. And that's a great value to learn.Trevor Steadman: Exactly, exactly. And that actually kind of goes in my third point with regards to resident screening and selection. I don't think enough time is spent there, especially for homeowners or landlords who do their own self-managing. They don't put the time into actually looking for the right tenant for the right property. So they also should spend a lot of time in that area, as well. Screening, selection, rental verifications, all the above.Steve Rozenberg: And I think the biggest challenge with that, in general, is that most landlords don't have a process and procedure or qualifications and they go off their gut or their reaction or their emotions. And, I don't know about you, but I've never seen someone make a knee-jerk reaction and come back and say, “that was the best decision I ever made. I'm so glad I did that.” It normally is the other way.And I'm guilty of that myself as an investor. Because, when you price a property wrong and you plan for maybe one or two months of vacancy and now you're into four and five months, they can see and that one person rings the phone and says, “hey, I'll take it,” you throw all the ideas out the window and all of those things and next thing you know, you maybe put the wrong person in your property.I used to tell owners, it's still vacant, you just have a person living in it now. And now you have a bigger problem because now you got to worry about getting them out. And I think the biggest challenge when it comes to doing this and making these mistakes are, nobody really accounts for the mental stress that you put on yourself by making that wrong decision and having that wrong person in your property. And now you've got to untangle the mess that you basically made. And what I'm hearing from all of this, which is funny because the other video we've done in the past talks all about successive investors using data. This shows me the reason a lot of investors fail, if you count up all these things, is because of data. They're just not paying attention to the data. And so they're making more emotional decisions or what they think it should be, not what the numbers are telling them.Trevor Steadman: That's it exactly. You hit it on the head. Exactly.Steve Rozenberg: Wow, that's great information. So, if somebody wants to make sure they make the right decisions in Reno and purchase a property and not the wrong decisions and they want to get ahold of you, what is the best way to contact you?Trevor Steadman: The easiest way is to give me a call. The number is 775-335-0124. or shoot me an email. Trevor.firstname.lastname@example.org. That’s CO at the end. That’s the easiest way to get ahold of me, and we can see what we can do.Steve Rozenberg: That's great. And for those of you that want to learn more and get more engaged in the investing world, I would ask you to join our Facebook group. We have a Facebook group called the Mastermynd Real Estate Investment Club. A lot of serious investors in there. New investors. Experienced. All learning, engaging, conversing. I'm in there. Trevor's in there. Join that. you'll learn a lot of things that you can do and avoid a lot of pitfalls of things that you shouldn't do.Also, if you want to go to our website, mynd.co. M-Y-N-D.co. Again, I'm Steve Rozenberg. This is Trevor. I Want to thank you for watching. We'll talk to you later. Bye-bye.Trevor Steadman: Thanks again.There are many factors to investing in real estate that new and seasoned investors may not think of which could lead to serious failure in the Reno market. For example, with an influx of new residents from California and elsewhere, some investors may find it necessary to improve and update the residence they are renting. While this may seem like the right thing to do, depending on the neighborhood, improving a property too much can actually make it harder for an investor to achieve their desired returns.Likewise, pricing a property incorrectly is a major mistake many investors have made. As such, it is incumbent upon the property manager or owner to thoroughly understand the market, the neighborhood, and the property to set the right price.Lastly, it is incredibly important for property owners to take the time to truly screen potential tenants to make sure they are right for the property, but also that the property is right for them. Success or failure in the Reno market and other markets, generally, depends, in part, on how a property manager or investor manages these factors when renting a property.