If you’ve ever read any of the feel-good books like Tuesday’s With Morrie or self-help books like Stephen Covey’s 7 Habits of Highly Effective People, you already know about the concept of “vampire time-suck“. This is the person or situation that sucks the valuable time (aka “your blood”) out of you by attending certain meetings, taking certain phone calls, and completing to-do’s. If you think even for 30 seconds here, you can mentally picture that co-worker or vendor or daily/weekly job task that fills this time-suck, can’t you? Me too. Why do I bring this up today? Because one of my property management Clients reminded me how this concept intersects with the financial concept of “discounting value of money”. Here’s the basic concept: A dollar earned or saved today is worth more than a dollar earned or saved in the future. It’s the method used to bring future projected cash […]
Things happen when you run a rental property operation. That’s why there’s the phrase you see on bumper stickers that says “**** Happens.” As such, two primary choices present themselves: Be absolutely rigid and unbending in your policies and procedures….or…..Be absolutely flexible and have strength in your policies and procedures. What I mean is captured in this video below. As you watch it, consider the possible scenarios in your minds and do the metaphorical application to your rental properties, your tenants, and your landlord clients if you are a property manager. So….Is your operation flexible and strong enough to break your ‘cement blocks’? Or will you end up crushing all 27 bones in your hand?
Questions. We all have them. (If you don’t, run away from real estate.) Here’s the Top 20 questions asked by landlords and investors when choosing to hire a property management company. Some are deeper questions than they might seem the first time you read them, which is why the first question on the list is the first question on the list. If you are thinking about them in the correct mindset, you should realize within 2 breaths that the questions spawn subordinate questions and will take you down a rabbit hole even further. What do you charge? If I have a question and send in an email or call, what is the expected response time from your company? Is the prop mgr available on weekends if issues arise? How do you handle repairs? How does money get to me each month? What happens if the tenant doesn’t pay rent? What […]
Your Financial Freedom with rental properties is achieved by improving your margins for continuous profitability. This improvement should include how to instruct your tenants on best practices to clean up the “Whoopsies” they make or perhaps their pets make. I asked one of my favorite contractors to do a quick write up on what he tells his customers on how to handle spills and such. Here’s the advice from Todd Francis, Owner of First Serve Cleaning and Restoration. “One of the most common mistakes we see that homeowner’s make is Scrubbing carpet to get a spot out. They think “if I just scrub a little bit harder-put some elbow grease into it, maybe just maybe this spot will come out”. What you will end up with is a section of carpet that is damaged as a result of your scrubbing and more than likely the spot will still be […]
A common question from my clients is “My Tenant just declared bankruptcy and I got the notice in the mail today. What does this mean for me as the landlord/property manager/investor?” Here’s a single page, well-written explanation from this month’s National Association of Residential Property Managers (NARPM) magazine of what to do/what not to do. Landlord Loses Because Tenant Went Bust, Broke, and Bankrupt As with other legal issues, it’s best to seek counsel from an attorney in your state/city who deals with these issues in their primary practice. Why subscribe to our weekly tips? Because…..
Margin–that critical component Margin….What comes to mind for most real estate investors, landlords, and property managers is financial concepts, such as Profit Margin. Or maybe Gross Margin. Or, if you are a particularly deep financial geek–Contribution Margin. And that’s all well and fine. Yes, savvy investors fuel their Financial Freedom by keeping a focused eye on their financial margins because without them, let’s face it, losing money on rental properties flat out sucks. What I’m offering to plant in your fertile mind today is a different kind of margin. In some very very smart people’s minds, like Dave Ramsey for example, it is one of the best kinds of margin. The kind of margin I’m mentioning here is margin for the unplanned. Unplanned expenses. Unplanned sources of emotional pain. Ultimately, Unplanned changes in your overall plan for Financial Freedom. Unplanned expenses: In my experience in counseling hundreds of real estate investors […]
Yes, it is sometimes necessary to fire a Client…. In fact, it is one of the best actions you’ll ever do for your property management business. You work hard to earn Landlord business. You advertise your services, you interview, you scrap and scrape to retain your client’s when the proverbial SHTF (and it frequently does in the business of managing other people’s rentals.) You work excessively long hours. You even, sometimes, have to rebate back fees or stroke a check when someone in your company or a vendor screws up royally. We’ve all done it. But…..there comes a point where you grit your teeth with some clients when you wish you never wrote their business, isn’t there? Again–we’ve all done it. I certainly remember more than a few clients early on in our property management company’s history which I wish I would have terminated our services earlier rather than later. […]
If you’ve noticed a common thread to my posts, it is the critical nature of setting proper expectations for ALL PARTIES in a lease transaction. In other words, it’s critical for the Tenant to know what is expected of them just as it is for the Landlord to know their role. Today’s article is about the need to properly and repeatedly communicate with Tenants about utilities. And keeping them turned on! Now, most leases will have clauses in them about who pays for the utilities–Tenant or Landlord–and that is good to have this clarity. Where I see the expectation “break down” between Tenant and Landlord or Tenant and Property Manager is this: What about the time period when a Tenant voluntarily moves out of the home before the end of the lease and they turn off the utilities thinking they’ll save money? Case in Point: The picture of this once-beautiful […]
This post is one of those that isn’t fun to write or read for that matter, unless you’ve been there and done that. Then you’ll immediately appreciate it. It WILL happen to you. Play the Landlord/rental/Property Manager game long enough and it happens. A tenant trashes your property. You have a flooded basement. You have a fire. The proverbial Shit hits the Fan. It’s easy to panic. It’s easy to lose sleep, to not think clearly. It is tough to regain your sense of control in situations like these, but it can be done. With some advanced thinking and planning, you can and will survive. Here’s how to protect yourself when SHTF: Remember back to your childhood. You likely enjoyed playing with Play-doh, right? Remember the extruder toys where you put a ball of your favorite color into it and pressed the handle and out squirmed a shaped snake of […]
There’s an old Landlord saying…. If it wasn’t for the dealing with Tenants and property maintenance, Landlording would be Easy! If you’ve been a Landlord for more than 2 months, you’re silently nodding your head acknowledging the above with a smirk. It’s OK. Everyone does it, too. You also know that, as required by State law, you are required to send the outbound tenant a letter accounting for deductions to their security deposit. With this in mind, here’s the Top 7 reasons why tenants frequently see deductions made from their security deposit funds: 1. Light Bulbs. If your lease document does not require the tenant to replace burned out light bulbs in your property, you are literally throwing money out the window. When our management company moves in a new Tenant, all the light bulbs are confirmed to be working and in good condition via photographs in our extensive […]