Stop Losing a Month’s Worth of Rent!
For many landlords, it seems normal to lose a month’s worth of rent anytime they have a vacancy. One landlord wanted to review and compare her own turnover procedures with other landlords. She asked the following questions to fellow rental owners to consider if there was room for improvement in her turnover time period:
- How long do you typically expect to leave a place vacant once it’s ready?
- Do you advertise a rental home months before it’s ready and have people sign a lease without seeing what they are actually getting?
My response is: 24 to 72 hours. I start advertising 60 days out. I usually start with prospects seeing pictures of the interior online. Then I work with the cooperation of the vacating residents to have prospects see the rental while it is still occupied but in good showing condition. I also encourage occupants to willingly say positive comments about the property and the neighborhood. Offer vacating residents a cash reward of $100 if by working together you can get the place rented to another qualified applicant by the last day of occupancy of the current resident.
Fair Housing – Emotional Support Animal
The U.S. Department of Housing and Urban Development (HUD) issued a press release concerning a new Fair Housing case. Specifically, HUD alleged that the landlords of a rental property violated the Fair Housing Act (FHA) by rejecting the emotional support animal request submitted by a veteran with disabilities. HUD filed the case involving a landlord who refused to waive the $250 pet fee for the emotional support animal, which by law are not considered pets.
9 Items Not to Include in Your Rentals
The reason for not including the below items is often because they are much more likely to break down or become damaged, thereby costing more money to maintain and affecting your cash flow. Some of the items listed however, are because they create greater potential liability exposure to the rental owner.
- Screen Doors
- Bi-fold Closet Doors
- Garbage Disposals
- Ice makers
- Swing Sets
- Lights with Pull Strings
Stop Losing Half Your Renters Every Year
A landlord recently asked on our Q&A forum why it seems that her residents don’t stay with her longer. How come they are tempted by other rental advertising in the area and consider leaving her rental, even though she tries to treat them right? No loyalty? In her words “It bothers me that he (the renter) evidently doesn’t appreciate what he has and will dump us as soon as he finds something better.”
My response: “Do you offer anything ‘extra’ to your residents as part of a customer loyalty program? Most businesses who want loyalty from their customers go far beyond what a customer would normally expect and offer bonus ‘perks’ for continued loyalty. What bonus perks do YOU offer residents?”
A Landlord: “Does going at 9:00 p.m. to investigate strange sounds count? I think three bedrooms, central A/C, washer and dryer, are perks enough for $475.00. Just saying…”
Me: “I hear you, but from a customer’s standpoint, it’s a good chance those are all things that they would expect from whomever they are renting from. UNLESS, you are doing a good job of SELLING your customers on how much you are doing BEYOND what the typical rental in the area offers, which rents for the same price.
Here’s my much bigger point for all those reading: If the truth be told, most of us landlords do a LOUSY job of communicating (SELLING) to our residents the value, benefits, and/or perks of renting our property. We simply assume our residents can see the value and then we can’t understand why the residents wouldn’t want to stay. Unfortunately, many good landlords lose up to half of their residents every year because of turnover. And I would dare say that a large percentage of renters who move would have stayed longer if those same good landlords had done a better job of regularly RESELLING their renters on the value and perks of renting from them. Hear me: It’s not always about what you offer; it’s what and how you communicate about what you offer! My name is Jeffrey and I’m your friend …”
Charge More, Not Less!
One of the most expensive lessons in property management is that people, who pay less, seem to care less, and that costs more! Have you ever shopped at Ross’s “Dress for Less” or a similar deal at TJ Max? You can buy a name brand shirt on clearance for less than a Subway sandwich. Have you ever read the label on your new shirt only to find it is dry clean only? What do you do? Do you take the shirt to the dry cleaner and pay more to have it cleaned than you paid for the shirt in the first place? Do you put it in your washing machine and just see what happens? Sometimes clothes even say, “hand wash!” on the label. When you pay less for a discounted item, it’s easier to ignore the instructions on how to take care of it! Are you guilty as charged? Nothing establishes value more than the price. We take better care of things when we pay more for it! If you want to attract quality people to your rentals, you’re going to need them to pay MORE not less!
When rents are lowered to the bottom of the market, your product becomes “discounted”. By discounting the rent, you run the risk of attracting bargain hunters (who only care about getting the lowest price) who may not appreciate or take care of their home properly. There is not as much value in the rental home that is leased on a discount. When you charge MORE, people appreciate their home more and are more likely to take better care of it.
True Test of a Landlord
A landlord and regular website contributor to our Landlord Q&A forum recently posed an interesting challenge: “If you had to design a test for landlords or for real estate investors to pass in order to become a landlord or a real estate investor, what would be some of the questions that you would put on this test?”
One landlord suggested the following test question: “Can you let someone totally bad mouth you and remain quiet?”
Don’t Just Go With Your Gut
Don’t make the costly mistake I used to make as a landlord. I used to think that I was good enough to evaluate whether someone will be a good resident or not. I have learned the hard way that just going with your gut, even for the most experienced of us, can lead us to still be fooled. Luckily, I have not lost thousands by making this costly mistake like other landlords who have shared their disaster stories. Rental property can make good investments, but they come with risks.
However, you can greatly reduce those risks. As far as I’m concerned, the true test of a landlord is a person who is able to learn from others’ mistakes and from other successful landlords. Don’t make the #1 mistake made by other landlords. ALWAYS run a credit, eviction, and criminal report.
The above tips 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 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 the advice of other rental owners 24 hours a day.