Consider throw a party this year for those who help your rental business! Finding and keeping good contractors/suppliers is just as essential as finding good residents. Throwing a PARTY for them has really paid off for us. The good will is AMAZING!! Here’s what we do:
- Book the back room of the local “stuff your face” smorgasbord restaurant. You do NOT want all these people tromping through your house! The room is already decorated at the eatery. Our bill is about $11 to $12 per person plus tip.
- Make a list. Who do you need to jump when you call? The handyman, sewer guy (He never gets invited to anything!), plumber, HVAC guy, electrician, roofer, Section 8 case workers, Lowe’s managers, flooring store, etc. We’ve expanded our list to include government offices like treasurer, tax assessor, utility offices, Police, and the Sheriff.
- Use written invitations. Be simple and direct. For example: “Come as you are and have a great meal on us! 11am -1 pm Thursday, Sirloin Stockade.” Hand deliver a few invites and mail the rest.
- Greet them and thank them for coming. Most people like to sit with their buddies so don’t think you have to entertain them with your marvelous conversational skills!
- Not necessary, but we give some take away gifts. Like a cute candle with fun scents like “Warm Your Buns” and some Christmas gospel handouts for their family.
Successful business people know that a MEAL changes a person from a BUSINESS ASSOCIATE to a FRIEND. We get sooooo many favors out of this. The gals from the utility office CALL US if something is wrong. When I called the Sheriff about a sticky court notice delivery he replied, “No problem” and did it that day! The Police Chief walked over to shake my hand and thank me for inviting his officers, (only 2 showed but the INVITATION got me points!). The clerks at the tax assessor office are now “friends” not “clerks” with canned answers and long waits.
If three people show up to the party, GREAT! You’re moving forward. Ours has grown. One year, we invited 179 people. 53 showed up (that’s a high %!). 53 x $11 per person = $583, + $100 tip = $683 invested, yielding THOUSAND$$$ is benefits and good will. This party PAYS OFF! Try it and tell us how it worked for you!
LED LIGHT FIXTURES WARNING!
Warning: When using light fixtures with built-in LED’s, you need to replace the fixture when the LED goes. As one landlord in a recent LED discussion stated: “I was on a buying spree for LED fixtures until someone shared with me the obvious that I was missing. When the fixture goes out, you have to replace it. When the bulb goes out, the tenant has to replace it.”
Another landlord advised: “Why replace a fixture when you can just screw an LED bulb into an existing fixture and voila! LED light!”
My Favorite Sources of Free (or Nearly Free) Materials
- Construction jobsite dumpsters
- Buildings scheduled to be torn down
- Auctions and storage space eviction auctions
- Curbside “junk”
- Spring cleanup days
- Kitchen/carpet/worker installers
- Home Depot/Lowe’s dumpsters, etc. (Ask first)
- Blowout sales at home centers
- Yard sales
- Asking around: “Are you throwing that out…”
- Jobsite foremen—Ask or pay for old stuff
- Your own properties—for example: tear out old carpet from your home and install in rental; pull out paneling from rental walls and use it later for sub-floor in kitchen
The $3,000 Late Fee I Gave Away
Everybody’s personality is different, so this may not sound like you, but I think many landlords started out with almost what you’d call a fear of tenants. When you’re thinking about buying your first rental, you think over and over about the downside of the tenants moving out, the tenants not paying, the tenants breaking all the rules, the tenants not taking care of things. In the beginning, like many landlords I was out on a financial limb buying my first multifamily building (a three unit rental property) and I was counting on every bit of that rent each month to pay the bills for that building. If a tenant didn’t pay on time, my main worry was just getting the rent—never mind a late fee. In fact, I was afraid that if I tried to charge the tenant a late fee that they might get mad at me. I had envisioned a domino effect in my mind. It starts with no rent, then I tell the tenant they now owe the rent and a late fee. With that, the tenant gets mad and now doesn’t pay anything and starts damaging the apartment. I had an irrational fear of things spinning out of control.
So, for the first few years I never pursued collecting late fees. After I had acquired a few more investment properties and they were all running smoothly, I decided to start enforcing late fees. I was in a better financial position (and state of mind) to handle a tenant who might get mad over it and perhaps stop paying all together.
What I found was that although you do have a few hotheads here and there who are going to give you trouble anyway, the majority of tenants understand their obligation (once you remind them about the fees they agreed to in the rental contract) and will pay what they owe. They won’t be happy about it, but most tenants won’t scream and holler over it either.
Additionally, the enforcement of late fees has a positive impact of increasing the likelihood of on time rent payments in the first place. Real estate author John T. Reed wrote in one of his books, “What you demand you get. What you tolerate you encourage.”
If I look back over my early years when I didn’t enforce the late fees, I see that I gave away over $3,000 that my tenants should’ve paid me. That was an expensive fear! Lesson Learned: When I didn’t enforce my own rules, the person who lost was me! The solution is to simply enforce the rules that I went to all the trouble of including in the rental contract. Enforced rules tend to get followed. I once read in a management book: People do what is “inspected” not what is “expected”.
The tips in this column are shared by regular contributors to the popular MrLandlord.com Q&A forum, by real estate authors and by Jeffrey Taylor, [email protected]. To receive a free sample of the Mr. Landlord newsletter, call 1-800-950-2250 or visit their informative Q&A Forum at LandlordingAdvice.com, where you can ask landlording questions and seek advice of other landlords 24 hours a day.