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“Turn Your Home Into a Rental House!” finally sees the light of day

Wednesday, May 15th, 2013

 

Although it took a little longer than we anticipated, “Turn Your House Into a Rental House Instead of Selling It!” has finally popped out of the incubator and is available as a paperback book.

In a nutshell, what is this book about?

With my charming wife and business partner, Angy, as co-author, we have created a guide on how to find properties, live in them, and then turn them into a rental house, instead of selling them.

According to the “American Association of Realtors,” the average American purchases seven houses during their lifetime. Angy and I believe that those seven houses should be converted into rental houses and held for the rest of our lives. They are valuable assets that will generate monthly income for the hard years to come, and provide further assurance of long-term economic family security. Like the old folktale says: “Don’t kill the goose that lays the golden eggs.”

How does this book help the average Joe?

We show the average Joe where to find the best properties, how to pay for your houses, property inspection, the nitty-gritty steps on how to prepare your new rental house for tenants, how to attract and screen tenants, managing tenants, and complying with EPA regulations. The appendix includes samples of leases, property inspection sheets, tenant selection rating sheets, and many other valuable forms to get you started in your rental house business.

What do millionaires do that most people don’t do? 

Go into politics?

Buy their own Starbucks?

Become a bearded recluse?

Well, those are some of the things they do, but according to Thomas Stanley, in The Millionaire Next Door, most American millionaires own their own houses, and they own at least one rental property.

Our perspective is, “If it works for millionaires, it ought to work for us too.”

Our hope is that this book will inspire you to buy a rental property and to receive the enormous benefits from that one bold action. Even if you buy just one rental property throughout the course of your entire life, your economic picture will almost immediately get better.

You may wonder, as we did, “Why didn’t we do this a long time ago?”

Where do we order this book?

Click here to order the book through Amazon.com.

—–

Recommended reading:

The Short and Sweet Guide to Target Retirement Funds at Fearless Men

Creating an Outsourcing Master Plan For Your Business at Louisville Gals

Top Sights In Australia For The Adventure Seeker at Untemplater

Is There Right Time to Buy Real Estate? at KrantCents

How To Easily Reduce Your Utility Costs | 5 Simple Steps FRugal Habits

How Big Should Your Emergency Fund Be? at Work Save Live

Working Towards A Debt Free Lifestyle In 8 Steps at Canadian Budget Binder

Help Me Spend $1100! at Eyes on the Dollar

How You Can Start Freelancing at the End of This Article at Modest Money

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Posted in how to turn your home into a rental property, purchase second home and turn current home into rental, real estat investing, real estate books, real estate investing, real estate principles, rental houses, rental management, rental properties, rental property, rentals, renting, turn my home into a rental, turn your house into a rental, turning a primary into a rental, turning an owner occupied home into an investment property, turning my home into rental property, turning your home into a rental property | 12 Comments »

5 Steps to Get Your House Ready to Rent by Terry Sprouse

Tuesday, November 13th, 2012

“Life is either a daring adventure or nothing.”

– Helen Keller

If you are following my suggestion and turning your old home into a rental house, or if you are just purchasing an investment fixer upper house, use these 5 steps to prepare your house to rent out.

 Step 1:  Remove Furniture

Move all of your furniture and personal belongings out of your old house. The absence of these items makes the house look bigger and the home is more inviting if it is not cluttered up with beds, chairs, food supplies, and toys. It also makes it easier to do a thorough job of cleaning the house.

This only applies to the first time you rent out your new rental house. After tenants leave in the future, they will take most of their things with them. Of course, some tenants do not follow the normal procedure, and they may leave in the middle of the night to avoid paying their last rent check.

(Occasions like this make it tempting to slip a magnetized GPS tracking device under the fender of the renter’s car.)

An incident like this happened to me a couple of years ago. Not only did the tenant leave a pile of clothing, bottles and boxes of cleaning supplies, cupboards of food, and a sofa, but also left behind a car that didn’t work. (So much for the GPS idea.)

Renters like this one are the exception. Tenants normally take all their things with them when they leave, making it easy for me to prepare the property for the next tenant, and without much effort, present an appealing yet empty house.

Step 2:  Clean Up

 Thoroughly clean the house. This includes painting walls (a fresh coat of paint makes the place look and smell good), washing floors, cleaning appliances (especially the oven), shampooing carpets, washing the windows, cleaning the bathrooms and checking the roof.

 Step 3:  Make Repairs

 Take care of all repair work. Leave nothing to chance and make all repairs before tenants move in. Change broken outlets and switches, patch holes, remove stains, replace cracked and broken glass, repair dripping faucets, replace missing shingles, and fix roof leaks.

The old saying that “Left to themselves, things always go from bad to worse,” is especially true with rental houses. It’s tempting to assume that that small leak in the bathtub, or a toilet that flushes most of the time, won’t bother anyone. But trust me, you will get that call to repair the bathtub or toilet at the most inopportune time.

This doesn’t mean that everything in the house has to be new, but everything should be in working order.

It is a rental house after all, and not Buckingham Palace.

For example, bedroom doors do not have to be replaced every time they have a crack or a hole in them. I rehabilitate the door with wood putty, and a fresh coat of paint. The guy in the “Easy Repair of Hollow Core Door” video below uses drywall mud to fill the hole, with equally good results.


 Buy used construction materials

Missing or broken light switches, outlets, covers can be replaced inexpensively with quality used ones. I have also purchased reliable doors, cabinets, stove tops, dishwashers, and toilets at stores that recycle construction materials, for pennies on the dollar. The Habitat for Humanity Store is one such place that I frequent for good used materials. There are 825 Habitat Restores in the United States and Canada. You can locate a store near you at www.habitat.org

Buy new or used appliances?

 If broken clothes washers or dryers cannot be easily repaired, our policy is to replace them with a quality used one, or with lower end new appliances (like the Kenmore brand from Sears).

 Buy bargain appliances before you need them

 Craigslist and yard sales are great places to find good used appliances at bargain prices. If I see a nice working appliance for a good price, I will purchase it, even though I don’t have any immediate need for it. I’ll just store it in our shed until I need it.

I bought a like-new furnace at a yard sale for only $40 and installed it into a rental house and it has worked great. For furnaces, there are very few moving parts to worry about, and the wiring is relatively simple. As long as the motor works, you’re home free.

I once literally picked up a clothes dryer from the side of the road that had a “Free Dryer” sign taped to it. I gave it a new home and it has been working

Low maintenance yard (in the southwest)

reliably for over 10 years now. The only repair, about five years ago, was that I had to change the on/off switch on the door.

Step 4:  Simplify Landscaping

The front yard of your rental houses must look great. Curb appeal gives the potential tenants a good first impression. Simple and neat landscaping gives the client  comfort that the yard is low maintenance and ecologically and economically low in water consumption saving the tenants money on water and saving you time later not having to replace a yard of dead plants.

This yard went too low maintenance!

I personally like to utilize decorative rocks on our rental yards, and plants that don’t require any watering, like Mesquite and Palo Verde trees, which have long roots that tap into the aquifer.

 Step 5:  Re-key the Locks

 One other thing that I like to do before a new tenant moves in is to re-key all the locks. This is cheaper than buying new doorknobs, and it provides security for our tenants. This protects you and your tenants in case a previous tenant has surreptitiously kept an extra copy of a house key.

 

            

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Posted in buying fixing renting rehabs, buying real estate, fix up houses, fixer upper houses, fixer uppers, fixer-upper business, for rent, how to make money renting housing, how to turn your home into a rental property, making repairs, rental house improvements, rental houses, rental properties, rental property, rentals, renting, repair, repairs, tenants, turn my home into a rental, turn your house into a rental, turning a primary into a rental, turning an owner occupied home into an investment property, turning my home into rental property, turning your home into a rental property | 19 Comments »

Don’t Make This Mistake, If You Want to Keep Good Tenants

Saturday, September 1st, 2012

Where’s the problem?

The issue of respecting tenants’ privacy is really close to my heart, based on a perplexing experience that my wife, Angy, and I had.

Shorty after we were married, Angy and I were experiencing marital bliss on a our honeymoon in Mexico. We rented a house near the beach, and after a few days we mentioned to the landlord that the kitchen sink was draining too slowly.

The next day was Saturday, and we still in bed that morning. Angy was sleeping and Terry was reading The Hitchhikers Guide to the Galaxy, when we heard the back door opening. It sounded like two people were entering.

A happy Spongebob-ish called out, “We’re here to fix the sink.”

Terry yelled, “Hey, why are you guys here so early? We’re still in bed.”

The Spongebob voice said, “Sorry, we have a tight schedule to keep. It’s not easy being a handyman you know.”

“What did he say?” whispered Angy.

“He said its not easy being a handyman.”

“Well, that’s his problem isn’t it?”

“I would have thought so.”

Terry shouted out, “Can you guys come back later? We’re not prepared right now. And if you could avoid unloading your burdens on us we’d really appreciate it.”

“Come on,” said the cheerful voice, “we can fix this pipe in two shakes.” We could hear random tools dropping on the floor and bouncing around, followed by an exclamation of “Oops.”

“And we are really good guys. I read poetry and I’m good at carrying on interesting conversations.”

“And, I write novels,” the other one with a goofy, Patrick-ish voice chimed in, “although I haven’t had any published yet.”

Objections to the contrary, we had our sink fixed and the handymen did turn out to be pretty good guys. They became our friends over the course of our stay.

Although this was just a light-hearted incident, it was also an example of violation of tenants’ privacy. Not only is it wrong from a courtesy perspective, but it is also against the law to enter the premises without the tenant’s permission, except in an emergency.

The more you can make the tenants feel it is their home, like keeping a handyman poet and a Pulitzer Prize wannabe from showing up unannounced to their private living space, the better your relationship with them will be.


 

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Posted in managing tenants, rental houses, rental management, rental properties, rental property, rentals, renting, tenants | 6 Comments »

Add “Start a Rental House Business” to Your Bucket List

Friday, August 24th, 2012

Taking a break from my regular fixer upper rental house blogging, today I am going to comment on some favorite blog articles that I have recently read.

Fearless Men

While I agree with Fearless Men’s article on the silliness of most bucket lists, in their article, 12 Things A Man Doesn’t Have To Do Before He Dies-Stupid Bucket Lists, I also think that starting a part time business is the exception to the rule.

While most bucket lists consist of activities that might reduce your life expectancy ( e.g., bullfighting), or your ability to enjoy life (e.g., broken body from the ever-popular choice of skydiving), a part time business, like owning rental houses, can actually improve your life.

Landlord Investor

Chuck’s article on Vacancy, First one in a while for us . . . is an insightful description a recent episode of  losing  and replacing a tenant. I appreciate this “real life” rental story that I can both relate to and learn from.

Louisville Gals Real Estate Blog

In her article entitled, 13 Cool Tools to Make You a Marketing Superstar, Sharon describes 13 amazing tools to help real estate investor to streamline their business. This is great for me because I didn’t know a lot of these things even existed, or that I needed them, until I read her article.

Any Shiny Thing

I actually read Lynn’s article Nora Ephron Left Us Sleepless a couple of weeks ago. It’s the type of article that touches your heart and makes you reflect on life’s bigger issues.

Turn Your House into a Rental House

By now, you probably know that my theory is that one of the easiest ways to get started in real estate investing is by turning your home into a rental house, instead of selling it.

My wife, Angy, and I are presently finishing up a book about how we go about doing this, entitled, not surprisingly, How to Turn Your Home into a Rental Property, Instead of Selling It.

Here is a quote from a book

According to the American Association of Realtors, the average American purchases 7 houses during their lifetime. In our opinion, those are 7 houses that we should hold onto for the rest of our lives, to generate monthly income and for long-term economic family security. Don’t give away the goose that lays the golden eggs!

The usual procedure that most people follow is to sell the home that they live in and to use the cash from the sale to buy a new house. If we tweak the old procedure just a little, it can result in a huge difference in our net worth and our economic security. We propose that instead of selling your home, just refinance it, and use the money from the refinance as a down payment on your next house. Now, you own two houses and you can just turn your old home into a rental property.

Presently, the book is going through the final editing and formatting process. Of course, it’s being reviewed by Homeland Security and the Pentagon, to avoid any classified information from leaking into the wrong hands.

By September the book should be available in both Kindle and paperback editions.

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Posted in best blog posts, blogs, book publishing, buying real estate, create wealth in real estate, fixer upper houses, fixer uppers, fixer-upper business, fixing rental houses, how to make money renting housing, how to start a real estate business, How to start your own house fix up and rental busines, how to turn your home into a rental property, investing, investing in real estate, investing in your spare time, rental houses, rental properties | 13 Comments »

The 5 Rules on How to Lose Money and Get Your Rental Property Trashed by Tenants

Friday, August 10th, 2012

Tthe Arizona Network of Real Estate invited me to give a presentation to their group about my book “Fix em Up Rent em Out.”

I thought the video might be available to the general public but it looks as though that’s not going to happen.

However, so that no one feels left out, I am going to provide  a summary of the key points that I hit during the presentation. As someone who was regularly picked last for teams in gym class, I’m sensitive to people feeling left out. Casting modesty to the wind, I am also including exclusive photos of the event.

So here are:

The 5 Rules on How to Lose Money and Get Your Rental Property Trashed by Tenants (based on an article by Andrew Stefanczyk)

1. Choose the Worst Possible Area

Location will determine the kinds of tenants you will attract, and how much rent you can fairly charge.

Do you want these bearded wonders as tenants?

The best approach is to identify target areas in your city where you would like to focus your purchases. I like to focus on “transition zones” (where there is a mixture of housing types) which are good for investors because we can purchase properties at lower prices, and there is high demand to live in these areas.

2. Put in the very best of things when fixing up  an investment property

Use new and expensive sinks, doors, refrigerators, light fixtures, etc. Never shop at stores that recycle construction supplies. Spare no  expense.

Of course, the problem is that tenants will not take care of our properties as well as we would,

Habitat Store

so we end up with many broken or worn out items. The better alternative is to shop at used building supply stores, and to purchase good, inexpensive, supplies for our rental houses. One such store is the Habitat for Humanity store.

3. Make sure you have absolutely no experience in make basic repairs

Not knowing how to change electrical outlets, unclog drains & toilets, and replace broken windows will cost quite a bit down the road.

The better way is to:

A. Learn as you go, and comply with EPA regulations

B. Take construction classes at junior college

C. Learn from handymen and contractors

D. Take the Zen approach to  house repair – learn to do everything yourself

5. Utilize fix-up books, investing books, & YouTube to find answers on how to make house repairs

4. Do not screen your tenants

Being as uninformed as possible about who you rent to may be the best way to lose money as a landlord. Do not ask for or check references. Do not call previous landlords and ask questions like, did they pay rent on time? How was the condition of the house or apartment when they left? Did they ever disturb neighbors with loud music or shouting matches? How often would you have to make special trips for repairs? Being as uninformed as possible about whom you rent to will make a huge difference and will increase the chances that you will get tenants that will trash your property and refuse to pay rent.

However, the better way is to:

A. Use a checklist for tenants. Decide what kind of tenant that you want ahead of time.

B. Look at their paycheck to verify income.

C. Check county records to see what illegal activities they’ve been up to.

D. Know the Fair Housing Act. Never select tenants based strictly on “race, color, national origin, religion, sex, familial status or handicap (disability).”

E. To find new tenants, use Craiglist, put up arrow signs, and host an “open house.”

5. Make sure you have not learned about your rights as a landlord

Be completely unfamiliar with the eviction process to guarantee long, drawn out disputes with tenants. Don’t keep up to date financial records or copies of correspondence with tenants. Most states provide online information about tenant and landlord rights so avoid reading these.

The better way is:

A. Get an authoritative legal guide like  “The Arizona Landlord Deskbook” by Carlton Cassler.

B.  Copy forms and letters from your legal book to send to tenants.

C. Comply with legal ways to deal with bad tenants.

D. Use memos to communicate with tenants so you have a record of correspondence.

E. Use a month to month lease instead of long-term lease to more easily scrape off bad tenants like barnacles.

F. Reward tenants for paying on time by discounting their rent $25.  

G. Send good tenants Target  gift cards for Xmas.

In Conclusion

Share Your Knowledge

“Each of us has cause to think with deep gratitude of those who have lighted the flame within us.”

–Albert Schweitzer

Carve Out Your Niche Update

My award-winning book on self-publishing, Carve Out Your Niche, is now available in Kindle format.

The Midwest Book Review called Carve Out Your Niche,

“Invaluable for anyone seeking to successfully write, publish, and market their own work.”

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Posted in Arizona Landlord Deskbook, book review, book review real estate investing, book reviews, buying real estate, carve out your niche, create wealth in real estate, do it yourself, excellent real estate books, finding tenants, Fix em Up Rent em Out, fixer upper book, fixer upper houses, for rent, home buying, house buying, house repair, house repairs, how to make money renting housing, How to manage tenants, How to start your own house fix up and rental busines, investing in real estate, investment house, investment property, investmet properties, landlording, learn repair skills, learn to invest in real estate, learn to make repairs, legal information, making repairs, managing tenants, maximize rental profits, month to month lease, mortivation, opportunity zone, places to advertise for a tenant, presentations, quirky tenants, real estat investing, real estate books, real estate investing, real estate principles, rental house improvements, rental houses, rental management, rental properties, rentals, renting, repair, repair books, repairing properties, repairing rental houses, repairs, selecting tenants, share your knowledge, success, tenants, tenents, transition zone, Zen of Real Estate Investing | 14 Comments »

Required Roof Maintenance for Fixer Upper Houses

Monday, July 2nd, 2012

One of the jobs associated with operating a fixer upper and rental house business is to keep your rental properties in ship shape!

With the annual approach of summer rains, now is almost the last chance to make rental house roofs water proof before the watery onslaught. As someone who has a sworn aversion for arriving too early to parties, I subscribe to the time-tested philosophy of “better late than never.”

This morning I applied some black roofing cement on some areas on one of my townhouse roofs. I had located some cracks upon my inspection of it about 2 weeks ago.

The first photo shows the area in question, where I had previously applied a small amount of plastic roofing cement, but today I was going to put on some more and cover a broader area.

Before picture

The second photo shows the application of the plastic roofing cement. We apply one layer of cement, then put a white membrane on top of that, followed by a second layer of cement. The membrane allows for more cement to be applied.

Application of roofing cement

Below is the “after” photo. You can see that in addition to the corner, we hit a few other cracks with our roofing cement on the sides of theroof. Later, we’ll come back with white roofing paint to cover the black cement.

Completed repair

A good rental house

My wife and I purchased this 2 bed 2 bath townhouse in 1993 and lived in it for 10 years before moving on to a bigger house (to accomodate our growing family), and turning this property into a rental house in 2003.

Its been one of our best rental houses because it is in a “transition” zone (aka “opportunity zones”) where there is heavy demand for housing, and it is easy to care for because it is compact (1100 sq ft with small front and back yards). The townhouse perfect for single people or small families.

We originally purchased it for $53,000 and we charge $750/month (more if the tenants have pets).

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Posted in Fix em Up Rent em Out, fix up houses, fixer uppers, fixer-upper business, flipping houses, house repair, house repairs, How to manage tenants, how to start a real estate business, How to start your own house fix up and rental busines, learn repair skills, learn to make repairs, making repairs, managing apartments, managing tenants, maximize rental profits, opportunity zone, property damage, purchase second home and turn current home into rental, rental house improvements, rental house protection, rental houses, rental management, rental properties, rental property, rentals, renting, repair, repair books, repairing properties, repairing rental houses, repairs, spare time, tenants, tenents, transition zone, turn my home into a rental, turn your house into a rental, turning a primary into a rental, turning an owner occupied home into an investment property, turning my home into rental property, turning your home into a rental property, Uncategorized | 5 Comments »

Funniest Tenant Screening Stories

Monday, June 4th, 2012

This guest post is from Endre Rex-Kiss, an online marketing, social media and human resource enthusiast. He currently represents FidelisAM, a US based agency providing employment and resident screening services. Follow his occasional guest blogging activities on Twitter.

Tenant screenings is the way to go if you want quality tenants and most landlords come across potential tenants who are either not what they claim to be or have serious behavioral problems. This article takes a look at the funniest screening stories landlords have had and their aftermaths. So sit down, relax or better still grab a cold bottle of beer to nurse while you go through the experiences below.

The Estranged Wife

A couple with no kids moved into a 4 bedroom duplex in the suburbs, the house and environment provided the perfect scenery for the couple but there was only one problem and it was that of meeting up with their mortgage payments. So they decided to put a room up for rent. The necessary adverts were created and finally a prospective client came knocking, he was the perfect tenant for he claimed to be single, had no pets, did not smoke, drink, do drugs and had a well-paying job. This obviously was too good to be true so the couple decided to hire an agent to conduct a little screening on him. After two days, the agent returned to tell the couple that they had been invited to have dinner with the previous landlord of their prospective tenant. On getting there, they were told that the tenant usually preys on sympathetic landlords and if you fall into his trap by renting a room to him, he would move in, behave for some days but a week later a woman who would claim to be his estranged wife would come visiting for some time and then finally move in with a cat. They would then proceed to co-habit like pigs, steal your property and when rent is due, disappear like thieves in the middle of the night.

Ghost Tenants

A couple responded to a landlord’s accommodation advert, they came to see the Landlord and professed that they loved the apartment and would be willing to rent it for the long term. The landlord was convinced that they were the perfect tenants so when the wife came calling the next day without her husband (due to the supposed fact that he works late) to ask for the keys to the apartment so she could look through it, the landlord duly obliged. A day passed, the lady did not return, two passed and she was still missing. The landlord quickly called his agent who conducted a quick search only to find out that the woman and her husband had already moved into the apartment. The police was called and the couple quickly evicted.

Dead beat Prospective Tenant

An agent once recommended a tenant who had the best recommendations ever; he had a good job, perfect credit and good relationships with his previous landlords. A meeting day was fixed and the prospective client shows up with a dead beat car and the attitude of someone who was one step ahead of the law. The landlord who needed to rent his facility out as soon as possible, overlooked this tell-tale signs and had agreed to lease the apartment to the tenant. The recommended signatures had already been traded and an upfront deposit had been made but as luck would have it, a police officer who was driving randomly through the neighborhood spotted the prospective tenant, felt his face was familiar and got down to trade some questions. Suddenly, the tenant bolted and a foot race began. The tenant was finally apprehended and the landlord discovered that the name, details and personal information given by his perfect tenant had nothing in common with the tenant.

The Thief

A couple came with an agent to view a landlords property, after going through it, they decided it was perfect and would be signing the necessary papers the following day but there was just one issue, they needed the house repainted. The landlord obliged, carried the necessary equipment to the house and started painting. He painted into the night and decided to spend the night there instead of returning home late. In the middle of the night, he began to hear strange noises at the side of the house, quickly he got up to investigate and on getting there, he found his prospective tenant trying to detach an A/C unit.

These stories show that conducting an in-depth screening which should include: former landlord credit checks, recommendations and past criminal activities are highly recommended.

Upcoming Speaking Engagement – Terry Sprouse (author of Fix em Up Rent em Out)

I will be making a presentation to the Arizona Network of Real Estate Investors. Mark your calendars.

Where:
Fidelity National Title, 6760 N. Oracle Road, Suite 100, Tucson, AZ

When:
June 7th, 2012

Time:
Meeting begins at 5:30 pm, presentation at 6:00 pm

Title: The 5 Rules on How to Lose Money & Get Your Rental Property Trashed by Tenants

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Posted in bad tenants, do it yourself, Fix em Up Rent em Out, fix up houses, fixer upper houses, fixer uppers, How to manage tenants, investing in real estate, landlording, managing apartments, managing tenants, places to advertise for a tenant, quirky tenants, real estate investing, rental houses, rental properties, rental property, tenants, tenants move our, tenents, Terry Sprouse, turn your house into a rental, Uncategorized | 4 Comments »

Silent Wealth Generation with Rental Properties

Thursday, January 12th, 2012

When you own a rental property, two silent forces at work to increase your wealth:

1.) principal reduction, and

2.) increasing equity.

With each mortgage payment, you decrease the amount that you owe on a home loan as you reduce your principal. When your property is rented out, your tenant pays your loan for you. At the same time, equity goes up as property values appreciate over time.

Let’s assume that the original mortgage (loan) for a property is $150,000, which is also the original value of the house. As time goes by, the value of the house may increase to $300,000, due to appreciation. At the same time, the amount owed on the mortgage is reduced to $20,000, due to the mortgage being gradually paid down. At this point, the amount of equity (or value) that you have in the house would be $280,000.

If we don’t allow periodic dramatic rises and falls in home values to shake our confidence, we can count on steady, long-term, profits from our investment properties.

Carve Out Your Niche” Radio Interview Tomorrow

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Posted in mortgage paydown, mortgages, mortgages and real estate, rental, rental houses, rental properties, rental property, rentals, renting, tenants, tenents, turn your house into a rental, Zen of Real Estate Investing | 3 Comments »

How Take Care of Tenants for the Holidays

Thursday, December 15th, 2011

How should your treat tenants? Treat tenants the way that you would like to be treated.

Think about it, at some point we have probably all been tenants. When I was a tenant, I wanted the landlord to respond to my problems around the house, I didn’t want rate increases, and I wanted to feel that the place that I was renting was my home.

Most tenants are just like you and I, and they deserve our utmost respect, especially over the holidays.

Here are my 4 key tips on how to keep good tenants

1. Practice good communication

The desires of most tenants are fairly common, and easy to identify. Good tenants don’t like noisy neighbors, appliances or other items in their rental property that don’t work, and frequent rent increases. Fortunately, good communication can take care of most of these problems.

One great pet peeve of tenants is when they have landlords who are as slow as snails to respond to their needs. Does it take you 2 hours to watch the television show “60 Minutes”? Then maybe you’re too slow.

If you are slow to respond to your tenant requests for help, you will be perceived as uncaring. The reason for this perception is because you don’t have good communications with your tenants.

Any time a tenant calls me, I will almost immediately return their call. Even though I work a regular 8:00 to 5:00 job, I can still manage my rental house business by having my cell phone with me everywhere I go. This way, I can deal quickly with tenant issues that may become exponentially worse (like a broken water pipe), if I waited to deal with it until I got home from work.

A phone call is good when you need to quickly get in contact with your tenant, but if it’s not an urgent matter, my preferred means of communication with tenants is by sending them memos by regular mail.

For example, if the tenant is not keeping up the yard work around their rental property, I will write them a note in a calm and respectful manner identifying the problem. I make a reference to the section of the contract that requires them to keep up the yard, and asking them to take care of it. A phone call could easily turn into a heated conversation, but with a memo, the tone stays calm and the point gets made. And, I have a written record of what I have told them that I keep in the tenants file folder.

I keep our tenants informed about activities that I have planned for their property. I will send a memo out and let them know well ahead of time if I plan to do some preventative maintenance, on the roof, for example. If a plumber cancels an appointment, I’ll call them so they are not waiting around all afternoon for no reason. It’s really just practicing common courtesy.

2. Timely responses to repair requests

I’ll admit that when I first became a landlord in 2002, this was a low priority on my list. I used to cringe when I’d answer the phone and a tenant would be on the line with a repair request. I knew I was going to have to spend some of my valuable time and hard-earned money to deal with a maintenance request. I would sometimes let the repair linger instead of jumping right on it.

Now, I look at it as an opportunity to show the tenants that I take their problems seriously, and I respond to their concerns immediately. I have a busy schedule, but my tenants have busy schedules too.

Keeping my good tenants happy is my highest priority because it directly affects my profits. The less turnover I have in my properties the more money I make.

What has helped me to respond quickly is that I have accumulated a list of good repair professionals over time. I have plumbers, an air conditioner company, handymen, and other professionals that I trust, on the speed dial of my cell phone, so that I can get them working on a repair without delay.

3. Rental fee Increases

I know that many landlords feel the need to regularly raise tenant rental fees. For obvious reasons, this can stir up the resentment of tenants and may cause them to think about looking for a new property.

I don’t have this problem because the only time I raise rents are when one tenant moves out and another one moves in. My philosophy is, why give the tenants any reason to look for another place to live?

In the case of rent increases for extremely long-term tenants, I think that tenants don’t mind paying a fair and competitive price, as long as it doesn’t seem like an exorbitant increase to them.

4. Warm Their Holiday with a Gift (card)

I may have said this before, but it bears repeating, remember your tenants during the holiday. The holidays are a great time to build the relationship that you have with your tenants. I have established a holiday tradition of buying my tenants a gift card from Target.

Don’t be a Grinch, at the very least, send a nice card.

For more information on giving gift cart for tenants see:A Holiday Tip for Keeping Good Tenants

Are You Big Enough to Pay it Forward?

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Posted in rental houses, rental management, rental properties, rental property, rentals, renting, tenants | 1 Comment »

Increase profits by improving your rental property

Saturday, July 9th, 2011

I’d like to share with you an email that received from an insightful real estate investor who, I think, uses a great way to increase his rental profits.

Hi Terry;

I have been the landlord of a triplex for just over 5 years. For most of that time, I simply maintained the property that I owned after making a couple of bigger renovations (windows and insulation). The biggest challenge I had was that my existing tenants paid way below market rent and rent control would not allow me to increase rents beyond 0.7%-2.2% each year. I felt stuck.

Recently, one of those tenants moved out. I managed to gut and redo the one bedroom unit and once it was finished I rented it out for almost double what I was getting before! This took the pressure off quite a bit but I realized I had to get my other “long term” renter out of her apartment. I ended up paying her to leave (2 months free rent) but it looks like it paid off. Her rent for a 2 bedroom was $474.77, but I have a lease now on the apartment for $799 a month. Surprisingly, I got this tenant because they saw pictures of the first unit I did and knew that I was finishing the second unit the same way. When they did the walk through the place was gutted and I didn’t even have the walls framed in yet!

I have looked at some other systems out there, but it seems to me that the only one that really works is finding a run down property with below market rents in a good area, fixing it up, and rerenting to higher classed tenants. If I knew a few years back what I know now, I would get the old tenants out ASAP even if I need to use my “cash for keys” program.

Right now I work full time so I rely on a dependable contractor that I feel I can trust. I hope to start renovating my own houses down the road, but I think I might need to get rid of my job to free up the time. Currently, I just do a walk through each day to see what work has been done and simply manage the renovation. Once the triplex is completely turned around next month I figure I will start looking for another project; I just need to convince my wife who still has fresh memories of my less stellar tenants.

Anyway, wishing you all the best!

Jim Thrower

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Posted in Fix em Up Rent em Out, fixer uppers, for rent, rental, rental house improvements, rental houses, rental properties, rental property, rentals, renting, repair, repairing properties, repairing rental houses, repairs, safe ways to invest in real estate, small investor, start small | 1 Comment »

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