Top 5 Tenant Complaints and How to Handle Them

I find that working as a property manager is in a similar capacity to working as a police officer. Whenever your job description includes enforcing rules, you tend to find yourself in the hot seat whether or not you are following protocol-it’s just the name of the game. As property managers, we tend to land in this proverbial hot seat with tenants more often than we’d prefer. Whether it’s a situation where you have made a mistake or the tenant just doesn’t like the rules, there are ways to keep these issues from becoming an all-out tenant/landlord dispute.

1. Rental Rate Increases
Tenants do not like rent increases and some may even find it offensive if they are a long-time tenant. A lot of times, your tenants may view a $20 rental increase to be undoable. I have found that if you split the rent price with your current tenants 50/50, they tend to view it as a bonus as they are not paying the full increase. For example, if I have a tenant that is paying $600 on an apartment that is now renting at $620, I’ll meet them in the middle at $610. While they may not be thrilled with the increase, they tend to be more understanding and grateful for the break.

2. Unkept Common Areas
Having extra common areas for tenants to use can be a major incentive for tenants. A beautifully maintained clubhouse, pool or gym can help to attract new tenants and retain your current ones. On the flip side, dirty and unkept common areas can do just the opposite and be very detrimental to your bottom line if word spreads. Hiring someone to do regular maintenance and cleaning on these areas will keep this from being an issue. If you spot something out of place or broken, speak up! Get it taken care of as quickly as possible. A prospective tenant could walk through the door at any time and you want your property to look clean and well maintained.

3. Response to Maintenance Requests
A major tenant complaint that pops up on web forums quite frequently is the amount of time it takes for their maintenance requests to be addressed. A good rule of thumb is to make sure that maintenance requests are addressed and resolved within 3 business days. Obviously there will be some variation to that if you have something come up that is more urgent such as a water heater that is out. There will also be times when the 3 day period will need to be extended if parts or appliances need to be ordered, in which case most tenants will understand. I go through my emails and maintenance request list daily to ensure that I don’t miss anything and that tenant concerns are addressed as soon as possible.

4. Noisy Neighbors
“Why do they call them apartments and not togetherments?” One aspect of apartment living that can really make a tenant’s hackles rise is the noise that accompanies living 4 feet from their neighbors. While property managers can’t do much until a police report has been filed, there are ways to help tenants disputing over noise to become a bit more cordial and avoid either of them ultimately choosing to move out. One thing I learned from my supervisor is to encourage tenants involved in a noise war to resolve their issue peacefully. Suggest that they bake cookies and take them to the neighbor and ask them very nicely if anything can be worked out that will work for both tenants. I have found that noise complaints are resolved quickly and effectively almost every time I have suggested this. Of course there will be times when the police will need to get involved if the noise involves violence or wild parties raging into the devil’s hour, but most of the time this is not the case.

5. Issues with a Hired Contractor
This complaint can be a difficult one to handle as most contractors doing work for you are not your employees. The best practice is to make your tenant feel validated. Apologize and assure them that you will look into what happened and make sure it doesn’t happen again. Prevention is also a great practice in this regard. Make sure that any third party contractor or handyman is aware of your rules regarding entering apartments and tenant interaction so that there is no confusion as to what they should or should not be doing.

Handling tenant complaints can be a difficult part of being a property manager. By following these 5 tips, you can alleviate most of the headache that comes with dealing with these complaints. By handling tenant complaints quickly and efficiently, you ultimately will create a more positive tenant/landlord relationship in the long run and avoid undue stress for both the tenant and landlord.

I have been working for a property management company for almost six months. I am an administrative assistant at one of the largest property management companies in the area. The role of an administrative assistant in an office is very important because you must be great at multitasking and be able to perform all the main duties in an office. The phones are ringing and there are people constantly coming in needing things. There are days when I want to scream and pull my hair out strand by strand.  During the six months that I have been employed at this company I have learned many key lessons to surviving while trying to please everyone. The biggest lesson I have learned is that it truly is impossible to please everyone. From the outside looking in you would not know that my job is as hectic as it is but trust me there are days when I want to yell. When working with the public you never know if today is the day someone will yell at you, so the question is how to handle the stress. There are several ways people react to others yelling at them. Some may cry, some may yell back, some may even hide under their desk, and some may run away. The best way I have found to deal with people yelling at you daily is to stay calm during these situations even though you may feel like blowing up on the person. Take a deep breath, collect your thoughts and go ahead and handle the situation one mini crisis at a time.  It may be an account not balancing or an angry tenant trying to sweet talk their way out of their lease agreement. It may be someone calling upset with a maintenance issue, there is always something that needs to be resolved. I tell myself to remain calm, smile and reassure them everything will be okay, the situation will be handled. Truly that is what people want to know that you care about their situation and that you care about them.

Stephanie Hernandez

Who controls 40% of the Real Estate Market?

20150119_143317

Real estate is more tangible than stocks and bonds. Real estate is more transparent than stocks and bonds.  Real estate is less risky than stocks and provides a much better return than bonds.  These simple truths make real estate a desirable asset. Private investors control about 40% of the commercial real estate market in the United States.  Private investors maintain title as the most significant influence in the real estate market.  Where do they get their money to purchase so much of the real estate market?  Most private investors obtain debt from commercial banks to fund their commercial real estate projects.  If a private investor is interested in a piece of real estate that is too large for them to purchase themselves they can always form investment groups with other private investors and purchase the real estate together.  Normally when investors get together one or more of them are accredited investors.  Accredited investors have a net worth, excluding their homes, of at least $1 million or an annual salary of at least $200,000 if single and $300,000 if a couple.  Other types of private investors would include investment banks, venture capital companies, mortgage brokers, and mutual funds.  Please be a social butterfly and share.  Also comment with questions, or ideas for Axiom’s future blog posts.

Amortization

Amortization is paying off debt with a fixed repayment schedule in regular installments over a period of time. In the Real Estate world this will refer to a mortgage on a property, most likely a home or investment property. At the beginning of the loan term, most of the monthly payment goes toward interest. With each subsequent payment, a greater percentage of the payment goes toward principal.

example of table

When acquiring an investment property it is important to purchase right. The quality of the investment will largely be determined by the purchase of the property. Amortization is one of multiple aspects that can be adjusted to facilitate a good investment that produces the monthly cash flow you may be looking for.

Before purchasing an investment property have Axiom Properties and Development review the investment and your goals. Often we can fine tune your already great plan. When the papers are signed and the property is yours we can use our property management skills to put you right where you want to be. Axiom is ready to handle your needs in commercial property management and residential rental property management.

How I Nearly died trying to Invest in Real Estate

 

When I was first married my wife had this crazy idea to get her Real Estate license and use that knowledge to purchase an apartment complex before we were even stable enough to buy a home.  Honestly most of our family on both sides thought we were crazy!  So while we were still in college and renting a loft apartment ourselves, we ventured off 220 miles from our humble apartment to search for our new investment. We actually quit our jobs and changed universities to make this happen.

Finding an Investment Property

 

We spent several months obtaining the Real Estate license and then another couple of months finding the right deal.    We started by going to look at each listing in the city with a knowledgeable realtor.  Finding this to be a waste of time we asked to see every listing for a 2-4 unit property available on the market.  We quickly found that shopping for investment property is not done with your heart but with your calculator. Once we had the fifty plus listings in our hands, we eliminated them one by one with a calculator.  Doing what I now know to be a napkin test, we checked the cap rate.  If a listing did not pass our standard we threw them out.  With only 5 minutes invested in each complex, this was much faster than the drive across town for each prospective listing.

Finding an Investment Property continued…

We found there were just a few listings that actually could be considered a real investment for us.  We then asked for a deeper explanation of the income and expenditures of the property.  Looking at the detailed financial statements, only one complex looked promising.  We mustered all the confidence and bravery we could and put our first real estate offer into action.  The asking price was $345,000 and to make the property make sense to us we needed to pay less than $200,000.  Our first offer was $160,000.  The realtor actually laughed at us and said that our offer would never fly.  Well it didn’t and we really offended the seller.  There was rumor that some ferocious words were flying between the seller and their agent.  Before 24 hours were up we had our rejection letter in our hands.  We almost gave up at this point thinking we had done all this work just to be rejected when we thought we were doing everything right.  A week or so later we noticed that the listing dropped from the original $345,000 down to $210,000.  Seeing that drop we figured that our low offer made them think a little and told us they were actually desperate.  So we wrote up another offer for $179,000 with almost $15,000 to be set aside for repairs as soon as we purchased the place.  The offer, although appearing much better than our original, was only $5,000 more.  We were ready for a quick rejection again.  When we got their acceptance letter we jumped for joy!  We felt that we were well on our way to success and the hardest part we thought was behind us!

Cutting the Fat

We found a lot of fat that could be cut off the annual expenditures.  For example we found that the current management was dry cleaning the large drapes that came as window covering for the units at a cost of $400 per unit per year.  The first day we owned the property we ripped down all those drapes and replaced them with blinds that could be wiped clean by the tenants.  This is just one example of the crazy expenses this property consumed due to poor management.

Eminent Death         

The units were in desperate need of some “lipstick” as I called it.  They were darkly painted and the units had very few windows.  “Lipstick” was an understatement!  We started by kicking out a sex offender who was in the largest of the units.  We could not stand to live in the apartment because of how gross it was.   The apartment itself was so weird that we were very uncomfortable to say the least.  We were in fear every night that the sex offender would come back.  We changed the locks on the doors and put sticks in the windows.  I slept by an ax ready to defend my family just in case he came back.  We saw him on multiple occasions walking down the street during the day and it freaked us right out!   On top of that we found that the heating bill was $400+ a month.  We were used to a heating bill of $40 at our loft apartment just months before.  During mid-winter we had the heat set to 50 degrees and we wore coats all the time to keep warm.  One night I decided to build a fire in one of the smoldering stoves.  Long story short the inspector misguided us that it was ready to use and we started the place on fire at 1 AM.  That morning I found that I have a unique skill of putting out rather large fires.  Then the week after the fridge went out.  We purchased a used fridge and found it was broken too.  It would heat up the fridge and freezer enough that inside the fridge was warmer than the apartment ambient temperature of 50 degrees.  After losing two or three weeks’ worth of groceries we started using an igloo I built in the back yard until the appliance company would fix our fridge.  It took them two months. I can tell you that lettuce keeps better in an igloo than in any fridge!  At this point of the story people usually think that I am joking.  Now the plumbing had some problems and when we tore into the walls to fix it we found the wall full of mold.  We then contacted a few mold remediation companies to learn how to get rid of mold.  We had to tear up the flooring and toilets as part of this process. We also had to shut off the water because the sinks had to come out.  For several weeks we had to walk to the gas station nearby to use the bathroom.  To get a drink we had to go to the water main and kick it on for a few moments until we caught enough drinking water to use. We caught the water from the multiple leaks we found.  Then when we washed dishes (in the same bucket) we had to go outside and dump the used water on the lawn because the drains were all torn apart.  This went on for months and then repeated itself in one way or another with every subsequent unit we repaired.  My wife will tell you today that giving birth was more desirable than the horror we went through with this apartment complex.

The Payoff                                      

 

When we were done the apartments looked well taken care of and felt good to live in.  When new tenants came to rent the apartments we raised the rents considerably.  Month after month the tenants’ rent paid the mortgage for us and gave us extra money to pay some of our schooling expenses.  When we finally moved out, the rent from the unit we lived in gave us the extra boost we needed to be able to live comfortably.  We held the property for several years and then sold it when we were ready to move on.  We still manage the property for the new owner, who could not be happier with the complex.  Because we purchased it well, we were able to sell at a decent price and because we put in the work to fix the place up the new owner has had very low expenses and has realized a great return on his money.  I am finding the best way to learn is to jump in.  Every journey begins with a single step.  I now manage multiple properties and deal with some similar concerns on occasion.  I have found better ways to deal with eminent death situations that do not involve walking to a gas station in the middle of the night to use the restroom.  The point is I would never be where I am now if it was not for what I have experienced.  Now I work with what I believe is the best management and development company – Axiom Properties and Development.  I wish I had a good friend to talk with and help me on my Investment Property Journey.  Now that I have the knowledge and skill base, I would love to give advice and help anyone ready to take their first investment journey or take your current journey and turn it into passive income.  Let’s make it a good one.  Be sure to share this article with your friends right now.  Everyone deserves a chance, pass it on!

Author:  Jake Blaylock

How to Qualify a Prospective Tenant

When managing rental properties, nothing can cause more headaches than a bad tenant.  By properly screening tenants, you can save yourself time, money, and headache.  Before agreeing to rent an apartment to a prospect, they should fill out an application and there should be a “waiting” period while you check them out.  On this application, it’s wise to get full name, contact information, birth date, social security number, current and previous addresses and landlords.  To minimize your risk with prospective tenant, you should use this information to do a credit check, call previous landlords, check the criminal history, and look into employment/income information.  By thoroughly checking this information, you can decrease your risk of non-payment, eviction, or issues with police with your new tenant.

One of the most important things to check is the prospect’s credit report.  This gives you a snap shot into their priorities and payment histories.  The credit score is important but you should also analyze what has been reported to the credit bureau.  Is everything medical collections or are there utilities and other business in collections?  Watch carefully to see whether there are any other landlords or property management companies.  If one shows up, this prospect should be a big red flag.  There are many companies online where you can purchase someone’s credit report and other background checks.

After you look over their credit history, you’ll contact their previous landlords.  Be sure to ask thorough questions.  First ask about their lease.  Find out lease dates, rent amount, if the lease term was completed, and if proper notice was given.  Secondly ask about rental history.  Find out rent amount, if it was ever late and how often, and if they ever had any NSF payments.  Next, ask about condition of the unit.  Find out what condition the unit was kept in or returned in upon move out and find out if any security deposit was returned.  Next ask if the lease was violated in any way, if neighbors complained about them, if the police were ever called out, and if there were ever any problems with guests they had over.  Finally, ask the landlord what they personally thought of the tenant’s character.  Was the tenant good at communicating with them, were they unpleasant to deal with, and would they rent to them again?  Once you get this reference, make sure to analyze the source.  Are you talking to a friend or relative?  If so, don’t let this reference influence your decision as much as if you talked to an individual landlord or a property management company who are likely to be much more objective.  It’s also important to realize the risk that an individual landlord or property management company (although there is less risk with a company) may lie and give a false good reference to get rid of a problem tenant.

The next thing to check is the criminal history.  There are many services that offer this, however  many states also offer free court records.  In Idaho, you can hop on the Idaho Repository at https://www.idcourts.us/repository/start.do .   All you need is a name and birthdate.  Go through their history searching for big things such as sex offenses, drug, unlawful detainer (eviction) and theft charges.  Also look for things like disturbing the peace (could be a sign of a noisy tenant) or a large barking dog if pets are allowed in this property.  These may be red flags.  Keep in mind though that people can change.  If all charges are older than 7-10 years, depending on the crime, it can make sense to not hold this against them indefinitely.

Finally, look over their job /income information, your impressions of the prospect, and any other information that was provided to you.  Make sure you are comfortable that the rental unit is within their budget.  If a prospect has an income of $1000/month it’s unlikely they can afford an apartment for $750/month no matter how much they try to convince you.  Make sure that you feel comfortable that this apartment is affordable for them.  Also take in to account your impressions of the prospects character.  Were they easy to work with or hostile during the application process?  Were they trying to rush through the application process?  If a tenant is trying to rush you and says they have to be out that same day, this may be a sign they are being evicted by their current landlord.

To properly and fairly analyze the applications, it is important to set fair and objective guidelines and then use the same guidelines for every applicant.  By establishing metrics for each category and consistently implementing them on each application, you will be able to prove you were both objective and consistent should you ever be challenged by fair housing.  Having set standards for analyzing applications also helps with the landlord/prospect relationship as it gives them an idea of what criteria they have to meet.

Fair Housing is a federal law requiring landlords to not discriminate against tenants over which they have no control.  It is important to know what rights tenants have, that are protected by fair housing.  Failure to know and accommodate these needs can cause for heavy fines to a landlord.  One area where many landlords get caught is with reference to service animals.  Provided a tenant passes the rest of the application process, a landlord cannot disqualify an application or charge additional rent or deposit to the tenant.  This includes properties with a “no pet policy”.   Landlords should know fair housing inside and out both for avoiding fines, but also because it’s just good practice and will help the landlord make sure their application process is fair.

By properly screening tenants, risk of eviction, damages, and neighbor complaints are drastically reduced.  With proper screening, a thorough lease, and making sure that your tenant understands the lease, you should encounter fewer tenant related problems.  Life is unpredictable and no amount of screening can completely eliminate the risk, but a solid background check will significantly reduce the number of problem tenants you will have.  If this helped you it may help someone else like you please share!

Author:                 Abra Kirby

Starting from $0. A tip on finding Success.

Because you’re reading this blog, I’m guessing you just sat down to relax and decided to kill some time on your phone, tablet, or computer by checking your social media account.  You clicked this link because it’s going to talk about how to start making more money.  You want to make more money because you want less financial stress in your life.   Essentially you want freedom from your “have to do’s”, being able to trade them in for the “get to do’s” in life.   Some of you have $10,000 in the bank, but become discouraged to find that if invested at 10% for 10 years, your end value would only be about $26,000.  Hardly enough to live off of for one year, let alone to retire from.   Others will have more, but it’s stuck in some IRA or 401k that seems to barely be outpacing inflation.  Finally, there are some of you truly sitting at $0, living paycheck to paycheck, stuck in the proverbial rat race and feeling like there is no escape.

We tend to think more money will solve our problems and make us happy.   It doesn’t, but keep reading.

btwashington

Source: http://en.wikipedia.org/wiki/Booker_T._Washington

Booker T. Washington was born into slavery in 1856.  At the age of 9, he along with his family were released to freedom as a result of the emancipation proclamation.   Starting with basically nothing, Booker became one of the first black Scholars and a dominant force in the political and economic arena around the turn of the 19th century.  Rather than focusing on fighting against segregation head on, Booker realized that the divide between black and white wasn’t nearly as wide as it was between educated and not, wealthy and not.  He chose instead to fight to help black people get an education and to become entrepreneurs, realizing that segregation would more easily resolve itself, if the black man could talk on the same educational and business level as his white counterparts.

He once said:

“Success is to be measured not so much by the position that one has reached in life as by the obstacles which he has overcome.”

Ponder this- even though they are probably great people, few care about the story of Sam Walton’s children. What people want to know about is the obstacles the Sam Walton overcame in order to build his empire of Walmart stores. Nobody calls a lottery winner “successful”, because there were no real obstacles hurdled to gain their wealth.  In essence, being rich is not the same as being successful, just as being a boss is not the same as being a leader.

While on this path of thinking, ask yourself- do I want to be rich, or do I want to be successful?  Not that you can’t be both and they frequently accompany one another, but what we’re looking for is what motivates us.  Few that are motivated by riches, become successful, but most that are motivated by success, become rich.   Why?

A Rich lifestyle is generally envisioned to be a life of ease, preferring to avoid obstacles.  While a successful lifestyle on the other hand is expected to be laced with difficult challenges, but accompanied by great reward as well.  Successful people will find happiness in achievement.  Yet, because we pay people to achieve things,  naturally a successful person tends to become rich as their achievements build up.   Take all the money away from a rich person and they will be poor, but take the money from a successful person, you’ll find that they are still considered successful.   Andrew Carnegie, Bill Gates, Jon Huntsman Sr., all died or have committed to dying with very little left to their name, yet we would be hard pressed find a person who wouldn’t consider them successful.

Here is a tip on finding success:

Write your biography before you live it.  Determine who you want to become, what you wanted to do and how you did it, before you do any of it.  Even if you just write an outline of how you’re going to have been successful, perhaps you’ll find your seed of inspiration, and a place to plant it. 

There is a large river of money flowing around all of us, throughout each state, town and city.  There are millions of ways to dip into it and take some home for yourself.  By focusing on who you are and what you want to become first, you’ll find the money side of success will come naturally once it’s no longer the focus.

Everybody is an expert at something.

Let’s find our next obstacle to success and destroy it with a passion.  Then when we’ve reached our later stages of life,  we can write our stories and we’ll all pay each other to read them.  🙂

 

 

How to Deal with Problem Tenants

As property managers, we’ve all experienced one of “those days”.  You come into the office, get settled and organized for the day, and the phone rings.  It’s a “problem” tenant-and they are not happy.   Depending on what obscenities are being thrown your way, your first reaction may be to throw the attitude right back at them. Conversely, maybe you are able to keep your cool so much that you seem passive, which infuriates your tenant even further.

I’ve handled my share of “problem” tenants.  In retrospect, I’m sure that I could have handled many of their situations in a better way.  In using my personal experience as well as the advice of wiser, more experienced property managers, I have come up with a list of the 5 best ways to handle problem tenants.

 

  1. Be Honest

A lot of the time, problem tenants are bred from from a lack of clear and honest communication on our end.  Be up front with your tenants from when they first walk in for an apartment tour until the day their lease ends and they move out.  Be available for questions they have on house rules and make them aware of important points in your lease (i.e. rent due dates, pet policies, and parking rules.)   Be clear on what they are paying for.  Make them aware of all fees involved in leasing and or ending a lease.  Do not be wishy-washy, as this will appear to the tenant as a sign that you are willing to negotiate your policies and procedures.

2. Be Professional

A great general rule in life, as well as in property management is to always be professional.  This will not always be easy. Problem tenants will often begin with shouting and threatening right off the bat. Do not take the bait. Remain calm and think before you speak. It’s always better to be safe rather than sorry when dealing with problem tenants who you may be involved with in a legal battle in the future.

3. Be Friendly

“You catch more flies with honey!”  Of course it’s not always our natural inclination to be friendly to someone who is chronically late with rent payments or is hurling insults your way.  As difficult as it is, being friendly with problem tenants can usually be a gateway for the problem tenant to become a great tenant.   Be friendly to your prospective tenants as well as your current tenants.  Find a way to relate to them.  Make tenants believe that you are their friend and you are on their side and they will generally have a more favorable attitude toward you and be much easier to work with right off the bat.

 

4. Be Objective

Often times, problems tenants come complete with sob stories that would have the most stoic of individuals in tears.  Just remember that the excuses that problem tenants come up with for not paying rent are usually just that-excuses.  Do not get sucked into the emotional whirlwind without some degree of suspicion.  Do not let your tenant’s problems become your problems.  Do what you can to be helpful without compromising the rules.

5. Be Prompt

Sometimes it seems the easiest way to deal with a problem tenant is to procrastinate getting back to them.  However tempting, avoid doing this in the interest of saving time as well as making sure that legitimate issues are taken care of.  Many tenants will see the lack of quick communication as passive and this tends to upset them more than a quick, concise response. On the contrary, a prompt and friendly response will make you appear to tenants a caring and efficient landlord.

 

Problem tenants are never fun to deal with and most of the time an inevitable part of being a landlord.  However, most of the problems these tenants are bringing in have been dealt with time and time again by most property managers.  If you follow these 5 tips, you can eliminate most un-needed stress in your business.  By being honest, professional, friendly, objective, and prompt, you can make your problem tenants a thing of the past.

How to Market Vacant Apartments for Lease

Marketing for apartments has slowly been changing over the years. Five years ago, most rental seekers would look into a local newspaper for classified ads or ads posted on a grocery store billboard. These days, the new generations that are moving out are tending to use more high tech gadgets to search for places to rent. They are using websites and cell phones apps such as, Google, Craigslist, Facebook, Twitter and Zillow, just to name a few. Here are a few marketing ideas that may help with the rapidly changing world.

  • Use every outlet for advertising you can, especially online. Use the newspaper, billboards, property signs, Craigslist, Zillow, Facebook and even use Twitter to announce new availabilities. You want to make sure that your available property shows up in Google searches. Also, be sure to put your Facebook and or Twitter link onto your office listings and websites for rental seekers and current tenants. This way, they can easily keep in touch and be up to date on new availabilities.
  • When advertising, let them know who to call for a showing or where they can pick up keys. Tenants need to know what property is for rent, what space is available, rent and deposit amount, distance from local schools or other major landmarks in the area. It’s important to let them know any and all information about the property or where they can easily get this information.
  • Use clear and updated photos. When advertising online, especially for the younger generation, they want to see photos. The photos need to be of the exact apartment that’s for rent. Rental seekers are expecting to view what they saw online and don’t want any surprises. In general tenants are looking for clean, affordable and updated properties. Sometimes, updating is not always an option, but even the littlest change can make a huge difference in property inquiries. It’s never a bad idea to look at what else is available for rent in the same area either. This can give you an idea of where your rental may stand as far as appearance and price.
  • Call or email back every lead interested in a listing you have posted. Even if a property has rented, offer them another property that is similar to what they are looking for.
  • Have an online application that is easy to submit online.
  • Offer incentives. IPad, tablet, mp3 player, TV, discounted rent for the first month, etc… people enjoy feeling like they are getting something for free or being rewarded for making a big purchase.
  • Offer a one-time rent credit to current tenants for referring someone to rent from your company or writing testimonials for your website.
  • Advertising must always be friendly, clear and up to date on any and all local housing laws or requirements. You want to be inviting to every rental seeker.  You want to treat every applicant and renter fairly and objectively.
  • Tenants are a good advertising medium with word of mouth advertising working for you 24/7. Tenants are good about letting others know how their living situation is or how the landlord treats current tenants. Leaving tenants unhappy from the first day, sticks with them through the end of their stay and where possible, it is wise for a landlord to make it right with each tenant.

 

Author:  Liz Westacott

How to Make $100k/year of Passive Income

From: http://en.wikipedia.org/wiki/Nevado_Mism 1
From: http://en.wikipedia.org/wiki/Nevado_Mism 1

The image above is a picture of Nevado Mismi in Peru. As you can see, it’s in a fairly dry and arid region which likely gets very little precipitation.  Yet Nevado Mismi is where the world’s largest river originates.  The mighty Amazon, a river which discharges over 8 trillion gallons of water a day at its’ mouth, starts here as a small trickle of water from a glacier.  Then across South America, millions of other small streams contribute to create the juggernaut that is the Amazon River.

Just as all mighty rivers have to start somewhere, so do large passive income streams. In the world of real estate investing, it’s a common phenomenon to encounter people that are “waiting for the right investment” opportunity to appear. They continually look for that one great investment that will provide them enough money to retire from and often will spend years and sometimes decades in this pursuit.  In the end, most of these would be investors will be disappointed, having spent their lives in search of their own personal El Dorado, only to find that it didn’t exist.  To add insult to their injury, their money is worth less than it was a at the beginning as inflation’s  voracious appetite  never ceases to consume, constantly eating at the value of your cash.

So how should I invest?

There is a sure fire investment strategy to build large passive income streams.  This strategy can be used by anyone and will work every time, in almost any market, but is often overlooked in a world where instant gratification reigns supreme.  The strategy is this:

All great rivers are derived from small passive streams.

This applies to water and just as well to passive income.

If you want to make $100,000/year passively, then start by establishing small streams of $100/month.  Once you’ve found a successful way to generate $100/month in passive income, that’s all you need to know!  Simply repeat the process over and over and watch the river form.  You’ll find that the more you invest, the better you get at it.  As your cash flow earnings start to pile up into bigger amounts to re-invest, the growth comes faster and faster as you’re able to do bigger deals.  The reality is that it may only take you perhaps 20-30 deals or less to reach your goal.   It’s ironic, but the secret to creating large rivers of passive income, is to start with creating small streams.  Whether you have $1,000 or $100,000 to invest,  I would begin with an investment that will generate consistent cash flow at a decent return that you can do now.  Procrastination is a heavy tax that you get to choose whether or not to pay.

3 Important Notes:

  1. Passive Income is income that you are not actively involved in generating on a continuous basis. If you’re managing your own properties, your income is considered at least partially active. To determine what your passive income is, deduct what the normal cost for management would be from the cash flow.
  2. When buying Investment real estate, doing good analysis up front is essential.   Never shoot from the hip, or go on a gut feeling. If you’re not confident in your analytical abilities, ask for help.  Plenty of people, including myself are happy to give you feedback for free or do an in depth analysis for you at a reasonable fee.  It’s critical that we not to put dams into our streams early on with bad analysis.
  3. Once you start to pull in your passive income, the immediate temptation is to look at it as extra spending money.  Don’t succumb to the temptation.  Save it up and keep reinvesting until you’ve hit your passive income goal.

 

Author:

Mark Bitton

Like this post?- please share it on Facebook, Linkedin or like it for us!