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Rental Property Investing 101 – 7 Tips Rental
Property Management Hi! It is Neva at TimeForINvesting.com Today,
I want to share with you some great tips if you are a landlord, how to make the process
easier, smoother, and collect rent on time. Just do make your investment a better investment.
Stay tuned! Hey guys! In this week’s video, we want to
talk about land lording. I talk about wholesale a lot but really, land lording is like one
of my favorite investment strategies. I think it’s because with rentals, you find the property.
You get it a deal, whatever, and you just rent it out forever. Whereas with wholesaling,
you always have to be out there trying to get your next deal.
I just wanted to talk about land lording and share some things that I have learned, the
process of being a land lord, and things like that.
For me to start it off and give you a little background. I grew up with land lords. My
parents have been land lords for as long as I can remember. I remember them owning rental
property from watching them all, hearing their conversations and things I know that they
have gone through with rental property. Me personally, what I have gone through is how
I came up with this. I am just going to share seven tips because
this thing can go on for a long time. I am just going to share seven top tips that I
wrote down. I want to really share it with you that I think will make a big difference
or have made a big difference since I’ve started implementing and following them. Let us start
off. Number one. The most painful thing being a
land lord is definitely evictions, at least for me. I do not like to throw people out
even when you do not pay the rent. I do not like it. I do not know if anybody likes it,
right? Comment below and let me know your eviction stories. I have done three. The hardest
one was the first one. Mostly, the lessons I’ve learned was from that first one.
What I would say my tip here is when it comes to eviction, to start the process as soon
as possible legally in your state. What I would recommend actually is go to this website.
It is called landlordology.com I’ll put it in the description box below.
You can go to landlordology.com. It is a good starting point because it have all the rules
that landlords needs to abide by, by state. You can click on your state where your rental
property is located. Get the rules of your state for evictions, securing deposits, and
all the different guidelines that you need to make sure to abide-by by being a landlord
because you wanted to make sure you too evidently, legally, you can get people out of your property
legally. Start the eviction process as soon as it is
legally possible in your state. Some states, you can start the process soon as it is late;
15 days late, 30 days late. As for me, whatever that timeline is in your state, start it.
You need to start it. It comes off really harsh. But since I have
started really following this, I get better tenants. I do not do evictions like I used
to because I think, one, the attendants now know my expectations and what my expectations
are and they know what to expect from me when they do not abide by the lease when it comes
around paying rent on time. Once you start to collect rent on time, I
would say 80 percent of the stress of being a landlord is removed. It used to cause me
stress relentlessly because you have to pay the mortgage deal, utility bills and all that
stuff. The mortgage company does not care that your attendant is late. They are going
to charge you the late fee and all the stuff, so start the eviction process early.
Talking about late fees, that is my second tip. Your late fee, it needs to be the max
it can be, for your sake. I was a hundred dollars. That was, to me, a big late fee.
The good thing about it is that it is high enough that it provides an enough incentive
for people to pay on time, because people would rather pay the rent on time than give
us an extra hundred dollars every month. Never ever waive your late fee. Whatever your
late fee is, never waive it. I am telling you, never ever waive it especially in situations
if you have multi-units and things like that and multiple tenants. They talk to each other.
One tenant will be telling the other tenant how they did never pay the late fee or whatever
sob story they have that month that they told you and you waive the late fee. I am telling
you, do not do it. Do not waive your late fee.
Make the late fee high enough that it is really inconvenient for them to pay it late. I will
tell you my experience. When the late fee was $15.25, people would just add it on to
their rent and pay the rent late. You do not want that because I want to pay my bills on
time because I’m collecting rent so I can pay the mortgage, utility bills, whatever
else. You have your money coming into due. You just want all that stuff done on time.
I do not want the hundred dollar late fee. What I want is the rent on time. High late
fee is just an incentive that people would say, “Let me make sure I pay my rent on time
because I do not want to pay extra hundred dollars.”
Another tip that my dad told me is that he is like, “”Neva, when the times get hard,
your people have to make a list and kind of prioritize what need to be paid first.” When
they have a lenient landlord and things get tight financially, their rent will get lower
on the lease because they will say, “Oh, my landlord is understanding. Instead of paying
my rent the first, I will pay it with the 15th check because my land lord will understand.”
He’s like, you do not want that. You do not want your tenant saying that. You want them
saying, “I need to pay my rent on time or I am going to have to pay an extra hundred
dollars. That is a hundred dollars I can take to buy groceries and things like that.” That
is my tip, dear. Number three is the process of collecting
the rent. No personal check is what I would say. Especially with us when your rental property
is in other state, there’s mailing people, mailing checks. Then you get the check deposited,
checks balancing, return check fees. Eliminate that entire process.
What we do is we use Quick Books. It is so convenient. The tenant goes online and they
log in. They can either use their checking account. They can even use their credit card
and pay the rent. They’re received right the way so you are not mailing receipts to people
and stamps, and all that foolishness. It is all electronic and then you get an email.
Quick Books send you an email immediately when your tenant pays a rent. I think it is
too late, if I remember correctly from that email, two business days that money shows
up actually in your bank account. It is just way more convenient for me. I also use it
to pull and do all our income and expenses to get it ready for tax purposes. Everything
is already there in one thing I just download the report and give it to the accountant.
That is just way more easier than writing and keeping books, and all this stuff, way
more convenient. What we usually do to provide incentive for people to use Quick Books and
pay online as opposed to mailing us rent, we’ll offer a discount if it is paid online.
Most people want to save money, so they will just go ahead and pay online.
If you have tenants that still want to mail the rent, I would say only accept money orders
and bank checks, but still do not accept personal checks. I am telling you, just the whole process
of waiting for checks to clear and then, they bounce and return check fees. You can charge
at some, but just getting yourself away from all that drama with that really helps.
If they want to mail it end each year, for people that still want to mail their rent,
what we do is send them 12 envelopes already stamped with the addresses already written
on those envelopes where the rent needs to go. I do not know why, but somehow, with the
envelope there already, with the address on and the stamp people do send their rent on
time quicker. I do not know why if people are running around to buy stamp and then they
keeping it off or something. But if you do that, that will save you as well.
My fifth tip is to go and you personally inspect your property or you need to send someone
to inspect your property that you trust because there are two types of tenants that I have
found. One tenant will call you for littlest thing that breaks. I have had a tenant call
and she was like, “Oh, the shower rod broke.” I am like thinking to myself, “You can go
out and just buy a shower rod. You do not need to have repair ticket and all that.”
Then, you have the second tenant. I do not know. It could be wall damage. They would
not call you and you will never know until you go and visit the property, and you see
the water damage. We had a tenant. They were there for a year,
never called for any repairs. And then when they left, the water heater – because this
is New York, has those old types of water heaters. And the bottom of the heater evidently
leaked water. They just had leaking water and it just rotted the wood floor in that
section of the room so we had to repair the entire room. We had to put down new wood floors.
I do not know. Some tenants are not just going to call you to make repairs. I do not know
if they think they do not want to call, the more repairs they have. Maybe they are thinking
that you are raising but I do not know. I am telling you, go and inspect your property
yourself. Have it in the lease that you can go in and inspect it, so that you know what
the condition is. You do not want surprises like I have had when people are moving out
and you send the new crew just to get it fix for the new tenant and there’s like major
damage in your unit. You are like, “Oh my goodness, they never called and told me this.”
Also, that leads to repairs and things like that. That is my next tip to you. When they
do call, fix things quickly. Fix things quickly. The reason why I say that is because one,
it will save you money. If your tenant calls, even if the land lady called and said that
the shower rod was broken or whatever and she was a great tenant. Always paid rent on
time. I still had to repair that real quickly and order her a brand new shower rod and get
that in there as quickly as possible. I also find that it saves you money as the
land lord when you fix repairs quickly. And two, the tenant, they get to know what you
expect because your expectations are high. If you fix repairs quickly, that means your
expectation for the condition of your property should be are high.
When people call you for repairs and it is taking you seven or eight months to fix it,
you know what they are thinking? They are thinking, “I totally ordered these things
to be fixed. He did not fix it. He does not care. He is the owner. If he does not care,
I do not see why I should care. I am just a tenant. ” They do not care. Next thing you
know, you have a tenant that does not care. You want a tenant that cares about the property
while they are living in it. So definitely, make your repairs quickly and
it is going to save you money. You do not want like, they call you one thing and by
the time you go to fix it, it is a bigger issue. So fix things quickly.
My seventh tip was, and I know some people would probably be against this. But the thing
is I do not allow people to smoke in our rental units. No smoking. Some smokers may get upset.
But the thing is that what I have in the lease if they are smokers or whatever, is that they
have to smoke outside. I would give you an example. We had tenants; they were great tenants.
They took care of the apartment. It was in really nice condition when they left. The
only thing was the smoke smell and the unit was renovated before he moved in. So everything
in the unit was completely brand new. But oh my goodness, we cannot get the smoke out.
We had to, what you call it ‘deodorizing’ the walls or something. You had to put like
deodorizer primer. It is just so much to get the smoke out. You had to think that you are
always going to have some cause when there is a turnover in tenants but you want to minimize
that. When you have to get rid of that smoke smell,
it can get expensive because we ended up having to getting new carpets even when the carpets,
we just recently purchased the carpets. We still have to go out and rip those carpets
out. The shampoo and everything, we cannot get the smell out. You end up having to just
bleach down or wipe down everything. Closets is inside, the appliances. The smell just
gets into everything. They had to go like stripping down the ceilings
with the deodorizing primer and all just to get the smell out. Just to save yourself that
additional cost when you are preparing for the next tenant, I would say, do not allow
the tenants to smoke in the property. My next tip is to raise the rent every year
or every time that you renew the lease. You may do annually or if you do at least every
two years but always raise the rent. The reason is that, sometimes what happens is – I have
done it and I have seen other people it, is they do not raise the rent and the tenants
get used to that rent. You do not want to have the tenant in your
property for 3, 4, 5 years paying the same rent because when it is time for you to raise
the rent, they are going to have a harder time in adjusting to a new price. Like I was
telling you for instance with my mom, she did not raise out rent for a couple of years
at the time. Then what happened was property tax went up. When property taxes went up,
basically that was reduced to our income. It took her a couple of years to raise the
rent to adjust to get her income back to what it was before property taxes went up. Do not
get yourself in that situation because taxes go up, utilities go up. Adjust for that each
year and increase the rent every single year. Get the tenant used to the fact that the rent
goes up every year because the expenses for you are mostly going to go up. Maybe the prior
year, you have more repairs, then you estimated or something like that. I just find, lesson
learned, my mom would tell you the same thing even if it is five dollars to raise that rent
every year because at least, the tenant going to get used to expecting some form of rent
increase. I am telling you, raising the rent after five
or six years, then you are going to have a hard time if it is the same tenant, you are
going to have a hard time with that because they are going to be like, “Oh, what happened?
Why was the rent going up?” But if they were used to that every year, even if I say that
is only five dollars, they are going to be like, “Oh, great! The rent only went five
dollars this year,” because they knew to expect something, so they will be glad for if it’s
this low this year or something. But do not get them in the habit of they are just going
to sit in your house for five years paying for the same monthly rent.
Those are my seven tips. There is so much more I could share with you, but I just want
to make a quick video as quickly as I could. This one is a little longer than what I usually
do. I just wanted to give you guys some real,
good advice and things that I know personally once I started to do had just make a big difference.
Share me some of your tips. Let me know some of your eviction stories. All land lords hate
eviction stories but like I have said, it is just part of the process. The easier that
we make it, we keep our investments and things like that.
Stay tuned for my next video! Next week, I am uploading that on Tuesdays. But what I
want to do too is, I am thinking of implementing I’ll upload on Tuesdays and Thursdays. So
hey, let me know if you liked the video, that idea of the uploading twice a week instead
of once a week. Just hit me up and get me a like. Let me know because that is what I
am trying to figure out, if I could upload more or once a week is enough. Because I have
a lot to get out information and get it back to you guys by responding to emails because
sometimes, that is what I like to do. I read those common email questions. I just like
to do a video and answer it so I can answer everyone else’s.
Subscribe so you will definitely get my next video. Take care and thank you so much checking
out my channel. Bye!