Tag Archives: tenants

Always Keep Learning

My Rental Property Coach-Always Keep LearningWhen you’re just getting started as a new landlord and buying your first rental property, the learning curve is very high.  There is an enormous amount of information to find, read and gather before you take the plunge.  Some examples include doing a property analysis before buying, all aspects of managing your rental and how to deal with problems as they arise.  All of the information you could ever need is available online but it’s time consuming to sift through it all to find the useful articles and true expert landlords that can help you along the way.   It took me many years to find everything I needed and create a system for myself to keep my rental property business running smoothly. 

What starts out as a difficult task though, soon becomes a joy as your confidence grows, your rental business grows and you see a significant increase in your net worth.  Eventually you will know more about buying and managing rental properties than you ever dreamed possible.  You might think at that point you’ll sit back and relax and let things take care of themselves for a while but that hasn’t been my experience at all.  Even after many years of being a landlord and managing my rental properties, I still visit rental sites and blogs regularly both to find information and opinions or offer my own.  I remember exactly what it was like when I was just starting out and all of the fear and uncertainty that I experienced.  Now I use that to help and encourage new landlords that are just getting started, just as it was done for me in the past.

My best advice to everyone reading is to always keep learning.  If you’re at the beginning of a new venture, it doesn’t have to be daunting.  Buy one book, take one course, visit one blog…eventually it will start to feed on itself and then watch out!  You’ll be unstoppable.

To your success!

It Doesn’t Have To Be A Real Estate Empire

New landlord,my rental property coachA lot of new landlords getting into buy and hold real estate try to acquire as many properties as they possibly can. They realize that real estate can be a lucrative business – especially over the long term and they want to capitalize on it as much as possible. More so once they’ve overcome their fears, gotten their feet wet by buying a rental property or two and feel more confident about what they’re doing.

A lot of “would be” landlords think they have to follow this philosophy too. Once they’ve decided that this is where they are going to invest some or all of their savings, they feel like they will need to acquire as many “doors” as possible to make it a worthwhile venture.

Let’s face it, this can be daunting to someone just starting out in real estate investing. Not only fear of taking the plunge and buying their first property but fear of then having to build a real estate empire.

Most people are also thinking, “I’m already so busy, how will I manage this all?” With kids, a job and a million activities, it’s hard to become a property manager as well. And unless you start off with a lot of positive cash flow (difficult), you will need to keep a day job and manage the property or properties yourself.

The point of all of this is – you don’t need an empire or the stress of thinking you need an empire. Even one rental property puts you way ahead of the game and on the road to financial freedom. Then you can decide if you want another or if you want to put other investment money elsewhere.

Managing 1 or 2 properties yourself is completely doable, even with a whole other life. I’m married with 2 very busy kids, a guinea pig and I work a lot. But I manage 2 residential properties and 1 commercial property with minimal stress and few issues. I started with one, figured everything out and then bought another one a couple of years later. A year after that I was approached about buying a commercial warehouse and I knew I could take that on as well. And to be honest, that’s good for me. I like having time to spend with my family and working on my other ventures and I feel GREAT having these 3 appreciating assets being paid off for me while I do that. You will too – so take the plunge and stay calm…it will all go great!

Top Ten Best Tips For New Landlords

20130123-10-landlord-tips-corrected2-151x300So, you want to become a new landlord? Haven’t you heard the horror stories? 3:00 a.m. calls for a plugged toilet, tenants that don’t pay their rent, nasty evictions…it’s a minefield out there. But maybe you’ve heard the upside too. That owning a rental property substantially increases your wealth because you have a solid asset that someone else is paying off for you.

So how can you, a would-be new landlord, avoid the pitfalls and reap the rewards? How can you dodge the disasters and turn this into a profitable, hassle-free venture? The key is to start out on the right foot. Putting everything in place and being prepared will ensure that your experience as a new landlord is a positive one. Sure, there might be bumps along the way, but if you’re prepared, you’ll meet these challenges head on and overcome them.

The best way to prepare is to learn from experienced landlords that have come before you. Al Williamson and I met on the Bigger Pockets Real Estate blog and decided to share our own experiences by putting together an infographic called “The Top Ten Best Tips For New Landlords”. We think these tips will be very helpful to someone that is just starting out in the rental property business and I’ll break them down here for you in more detail.

  1. Follow Your Entire Screening Process. We didn’t put the tips in any particular order because we think they are all crucial steps for a new landlord to take – but if pressed, this is #1. Our best advice is don’t EVER take what a prospective tenant tells you at face value and hand them the keys. Be rigorous. Do all of your employment, reference and credit checks EVERY time on EVERY tenant.
  2. Establish Great Tenant Relationships. This is a very important step for new landlords because new tenants = a successful rental property business. Having good tenants, after all, prevents the aforementioned “horror stories”. Establishing these relationships starts before you even meet your prospective tenants through advertising and screening and then carries on through the duration of their tenancy.
  3. Run it Like a Business. Owning a rental property is a business and an organized landlord with systems and processes in place is much more likely to succeed than someone who is just “winging it”. Some examples of these systems would include your forms, your ads, your property information binders as well as filing and accounting systems.
  4. Use Customized Forms. When you’re just getting started with a rental property, it’s important to have your forms ready to go. These would include things like an inspection report, lease agreement and rental application. Many new landlords use generic forms that they find online thinking that one form is as good as the next and often times they don’t even understand everything that is written there. These are huge mistakes which will come to light when a lease needs to be enforced. Use customized forms to lay down your rules and regulations from the outset.
  5. Make Security a Priority. Most new landlords think that the cost of rent is the most important factor for tenants when they are looking for a rental. In actual fact it is security for themselves and their families that is a top priority. Many tenants are actually willing to pay a little more if there is great security in place when they rent and they know it will be ongoing.
  6. Make It Easy For Your Tenants. When it comes to “who should do what” between tenants and landlords, conflict often arises unless it is clear from the start. The easier you make it for your tenants, the easier it will be for both of you in the long run. Putting a reference binder in each property, installing a keybox and making the yard low maintenance are just a few ideas to keep things running smoothly and hassle free.
  7. Use Your Head Not Your Heart. I would venture to say that this might be the hardest obstacle for anyone getting started with a rental property. As a new landlord, you’ll eventually hear a story or promise from your tenants, especially when it comes to late rent payments. Unfortunately, you’ll also figure out that most stories and promises aren’t true. To keep more money in your own pocket, it’s important to separate emotion from business and know your local eviction processes before you have to implement them.
  8. Prepare For Bumps In The Road. Let’s face it, it won’t ALWAYS be smooth sailing, even if you do follow all of our tips. Even with all of your systems in place, challenges will still come along. It’s how you handle these challenges that will determine your success.
  9. Save For A Rainy Day. Rental properties cost money for repairs, maintenance and vacancies. If you don’t have a way to cover these expenses as they arise, your properties will deteriorate and so will your grade of tenant. It’s a slippery slope so it’s always best to expect expenses and plan for them ahead of time.
  10. Keep On Learning. You’re doing a great job of investigating before you become a new landlord. It’s how you ended up here! As your rental property business continues to grow and evolve, so should your education. Keep informed through blogs and online forums for landlords. They are a valuable resource and you will eventually have a lot to contribute as well. Soon YOU will be teaching new landlords how to begin!

Becoming a new landlord might seem like a huge learning curve and in the beginning it really is. Use our inforgraphic “The Top Ten Best Tips For New Landlords” to help you keep all of these points in mind as you start out. Al and I sincerely hope you find it helpful and we wish you all the best with your rental property empire!

What’s in an Ad?

What’s in an ad?  Everything. Where you should you advertise for tenants? Online.Online-Advertising
When you advertise to find new tenants for your rental property, your ad accomplishes 2 things for you; first, it is a screening tool that let’s prospective tenants know what you’re looking for and second, it allows you to be very descriptive which brings more and better potential tenants to you.
When I advertise for new tenants, I use online sites exclusively. I have never advertised in the newspapers because it’s very costly for very few words. A typical newspaper ad might read “house for rent, 3 bdrm, $1000/mo + SD, avail Jan 1/14″. Depending where you live, this ad alone can cost a lot if you need to run it for a couple of weeks and it provides very little information to attract new tenants.
Online sites are cheaper (often free) and give you unlimited space to describe your property and provide multiple pictures. Prospective tenants are much more likely to look online for a property because it is more convenient and they also can find a better description before having to go and see a place. I’ve had people say, “well what if someone doesn’t have a computer?” and honestly, in this day and age, they would definitely be a very small minority.

Writing a great ad takes a bit of skill but if you’re successful, great tenants will always come in great numbers! Need some help? Just let me know.

The Easy Way To Get Your First Rental Property

My Rental Property Coach - The Easy WayIf you live in a city with high real estate prices like I do, it can be very difficult to find and buy a good rental property. If you can’t charge enough rent to cover all of your expenses, the property soon becomes a drain on your bank account. One of the easiest ways I’ve found to acquire your first property is to move and rent out the house you’re in. Here are the benefits:

  • Banks generally want to see a 25% down payment to purchase a rental property. Since you are now buying your principal residence, the down payment can be significantly less (generally 5%-10%).
  • You know exactly what the mortgage payments will be on the rental and they will likely be very manageable if you’ve been in the house a while.
  • You’ll know exactly what you need to charge in rent every month to cover expenses.
  • No need for a house inspection as you already know everything about the place. You now just need to clean and get ready for tenants.
  • You probably have a nice place so you’ll be able to charge higher rent and attract better tenants.

This plan worked well for us to get started in our rental property business but it might not appeal to everyone. Here are some disadvantages that might have come to mind (followed by my good reasons to just do it anyways):

  • You have to move! Yes, this is the big one – to leave your house and move to another. This might be bothersome for many reasons…you love your house and are too nostalgic to leave…it would take you completely out of your comfort zone to do something so drastic…it’s a very big job and more than you’d like to take on etc. etc. (Yes, all true but in the end it just depends what you really want. If your goal is to substantially increase your net worth with a rental property and financially it looks like the better alternative to buying a property to rent out – just keep the idea in your mind for a while. It may start to take root:))
  • Moving is expensive. (True but also a relatively minor expense in the grand scheme of things.)
  • If you’re putting 5% down on your next place, you will need to take out mortgage insurance which is costly. (I list this as a disadvantage but it is the reality for most people and really the reason for this whole plan. You can usually add the insurance on to your mortgage and it still makes a huge difference when compared with making a 25% down payment.)

We stayed in our next house for 2 years and then followed this plan again to get our second rental property. If you’re just starting out in the rental property business, I hope this plan will work well for you too.

Merry Christmas Tenants

Christmas is a great time to make your tenants feel appreciated. Little gifts go a long way towards a happy, long term relationship. In December, our city has the “Our Best to You” craft event and I always head there with my tenants in mind. Homemade fudge, amazing soaps, original prints, personalized ornaments – there is no end to the fun. I put a few items together in a gift basket with some homemade turtles and knitted dishcloths (thanks mom) and voila. Your tenants feel your appreciation for taking care of your property and in turn become greater tenants because they enjoy living there. Celebrate the season and share the love. And if you don’t love them – make that your New Year’s resolution!

How to Attract and Keep Good Tenants

Attract-Good-TenantsTalk to any landlord and they’ll have a tenant horror story to tell – myself included! When you get into the rental property business as a new landlord, tenants are one of the most important factors to consider. Not only will they be looking after your property for you, they will also be paying it off and ultimately building your wealth in real estate. Your ability to attract and keep good tenants will determine whether your rental property business will be a success or a failure so it’s important to know the basics.

ADVERTISING

Writing a detailed advertisement has two purposes. It allows you to describe all of the benefits of your property and is also the first step in describing the type of tenant you are looking for. You can be clear about whether you allow smoking, whether you allow pets, the amount of rent and damage deposit expected and the length of lease term you are looking for. With all of this information available in the ad, you have already narrowed the field to prospective tenants that potentially fit your profile.

SCREENING

Screening is your second line of defense and the most important step in weeding out bad tenants. When a prospective tenant calls me, I have a list of questions that I ask immediately. If their answers to these questions are favorable, I set up a viewing time to see the property. If they are interested in renting from me, I take things to the second and most important step; filling out the Application Form. This signed form is invaluable as it covers their personal information, their employment history, their financial status and their rental history. The form also allows you to call previous landlords, call credit references, call personal references, conduct a credit check and a criminal record check. If a prospective tenant is not willing to sign the Application Form and provide me with access to this information, I do not rent to them.

Screening is an important first step for landlords and it also sets the tone for tenants as well. It portrays you as someone who is organized, diligent and someone who takes their business seriously.

RELATIONSHIP

When you have completed your initial screening and decided which tenants will be moving in to your property, the rest of the relationship is up to you. You may have found the best tenants in the world but they won’t stay with you if you don’t live up to being a good landlord. A good landlord/tenant relationship involves many aspects but here are the most important things to remember.

When tenants are moving in, have a landlord checklist ready so that you don’t miss anything. Some examples are signing the Lease, getting the locks changed, going through the Accommodation Inspection Report, getting post dated checks, preparing a Tenant Binder and putting together a Tenant Basket to welcome them to your property.

Throughout the tenancy it is important that you are always available when contacted. If a tenant calls with a request or repair that needs attention, always respond in a timely manner. Keeping your property in good repair let’s the tenant know that you expect the same from them and also gives them a sense of security about where they live. Stopping in at prearranged times gives you peace of mind that the property is being looked after. Giving small gifts at holiday times and lease renewals also goes a long way to making the tenant feel appreciated.

The law of attraction is always at work in every aspect of your life and the landlord/tenant relationship is no different. Be a great landlord and you will attract and keep good tenants!