084: Property Management Tips with Turbo Tenants Sarnen Steinbarth
On this episode of the InvestFourMore Real Estate Podcast I interview Sarnen Steinbarth who is the founder of TurboTenant. Sarnen went to school to become a pilot, ended up in the air traffic control business, and along the way bought multiple rental properties including a 29 unit complex in Montana.
Sarnen ended up starting his own property management company to manage his properties, which was expanded to manage properties owner by other investors. Sarnen was a real estate agent in Montana, taught real estate classes, and eventually started TurboTenant to help landlords manage their properties. TurboTenant comes with tenant screening tools, free property management software, and free marketing for rental properties. We talk about all of this and more in this awesome interview.
How did Sarnen get started in real estate?
Sarnen grew up in a real estate family with his parents owning hundreds of rental properties. However, he decided to go to school to become a pilot. Unfortunately when Sarnen graduated 911 had just occurred and there was not much demand for commercial pilots. Sarnen ended up getting a job as an air traffic controller in Montana.
While Sarnen was in school he was already starting his real estate business. He got his real estate license at 18, and started buying properties shortly thereafter. He bought a single family rental, a duplex, a 13 plex and a 29 unit property. By the time he was 22 he had 44 rental property units.
Why did Sarnen decide to start a property management company in Montana?
Sarnen had 44 units and a full-time job, which left him little time for managing his rentals. He decided the local property management firms were not very good so he started his own company. He had to take a property management class to be certified to manage properties and was frustrated that there were very few classes available in Montana. Sarnen started his property management business to manage his properties and began to take on other clients as well. Eventually his company was managing over 200 units.
Sarnen also saw a need for more property management classes. He got certified to teach the class as a real estate agent and taught other educational classes to real estate agents as well.
How hard is it to start a property management business?
Sarnen believes starting a property management company was not terribly difficult, but it takes some planning. You cannot make much money from simply charging the landlord a monthly fee for management. When Sarnen had his own management company he had his own cleaning crew and maintenance people. He could make extra money from those crews as long as he disclosed he was making money to the landlords. Sarnen mentions you can have your own legal team, and contractors as well to make even more money. Sarnen mentions the first step to starting your own property management business is knowing the rules and regulations for fair housing, evictions, maintenance, and of course the best tactics for getting great tenants.
What should you look our for in a great property management company?
Sarnen also gives a lot of tips on how to find a great property management company. He suggests asking a lot of questions when you talk to any property management company:
- How often do they inspect their properties?
- How do they screen their tenants?
- How do they determine market rent?
- How many properties do they manage?
- Do they have their own maintenance and cleaning crews?
Along with interviewing the property management company, you should also check your state licensing authority to see if the property management company is licensed. Most states require property managers be licensed real estate agents to manage properties for other people. You can check with the state licensing authority to see if any complaints have been filed against the company.
Why did Sarnen start TurboTenant to help landlords manage their properties?
With today’s technology it is much easier to self-manage properties than it has been in the past. There are online tenant screening services, online marketing services, and property management software. When Sarnen was managing properties he was paying $400 a month for property management software. He thought that was way too expensive and not suitable for the landlords with fewer properties. He created free property management software, free marketing for rentals, and would make money by taking a small chunk of the tenant screening charges. Charges that most landlords would pay for anyway to get credit reports and background checks. The awesome part of his business plan was he did not have to charge landlords any more for those services than they would normally pay, because TurboTenant could negotiate a lower bulk rate.