Landlords Can Always Afford to Wait

Copyright 2020 Cain Publications, Inc.
by Robert L. Cain

We, as landlords, cannot afford to wait for the rent. Trouble is, many tenants believe we can. Enough tenants to populate a large city believe we get to keep as our own all the money they pay us in rent. We don’t have mortgages, insurance, taxes, maintenance or management expenses to pay. They have visions of us rolling in dough, and like Scrooge McDuck, having a huge vault where we keep our ill-gotten gains, and daily going in to roll around and play in our money—the money we snatched from them.

Some of our tenants wake up on the 22nd of the month and find themselves in the predicament of having more month than money and having to choose which bills to pay. How do they go about choosing who gets paid this month and who gets to wait? They use two criteria to decide.

One, who is going to hassle them. Two, who will report their nonpayment to a credit reporting agency. So our tenant sets his pile of bills on the table and goes through them.

Electric bill: “I paid it last month, they won’t call me and bug me, and they never report it to a credit-reporting agency.”

Visa bill: “Whoa! If you don’t pay them, they call you, they hassle you, and they send notices to credit reporting agencies.”

Phone bill: “I didn’t pay them last month, so I guess they have to get paid now. They’ll shut you off if you don’t pay. At least they don’t report you.”

Cable bill: “They won’t report you, but they will cut you off. If they cut me off, I can’t watch baseball on four channels at the same time. Gotta pay them.”

Car payment: “Gotta pay that one, too. If I don’t, they’ll come and get my wheels, and report it to a credit agency.”

THE RENT (landlord one): “I have such a nice understanding landlord. He won’t hassle me. I can call him and tell him I had some emergency. Let’s see, what will it be? Uh, kids in the hospital is always a good one. He’ll let me slide a couple of weeks, then I can call back and get him for another couple of weeks. Best part is he never reports me to a credit agency. That’s a big bill, too, I can pay a bunch of other ones if I don’t pay the rent. Besides, the landlord’s rich, anyway, he can afford to wait. I think the cell phone company would like to get paid before they cut me off.”

That, or something really similar, is the thinking that goes on in the mind of a tenant who has more month than money. Why do tenants do that to landlords? It’s because we don’t make sure they know from the beginning that paying the rent comes first, period.

Imagine the difference with a landlord who takes a different attitude.

THE RENT (landlord two): “I’d better get that check written right now. It’s the 29th and the rent is due on the first. If it doesn’t get there on the first, that jerk is going to call me. Besides, I won’t get the prompt-payment discount. Then, he’ll bug me some more. On the 25th of next month there’ll be a notice posted on my door reminding me of the importance of paying the rent on time. I remember one month when I tried to not pay the rent, he called reported me to that RealChek company, and they reported it to a credit agency. That ended up costing me a bunch when I had to pay a higher interest rate on the car I bought because of my lower credit score. Gee, maybe I should hand deliver the check.”

From the beginning landlord two made it clear that the rent was the most important bill. Many landlords use a move-in checklist so they don’t forget anything. One checklist item explains to the new tenant that the rent is due on the first and late on the second. We need to make clear that we will always collect late fees from the tenant or deduct the late fees from the security deposit, after which the tenant will have to make up the deficit in the security deposit. We need to make clear that we begin eviction proceedings the first day they are legally allowed. Finally, we need to make clear that if the tenant pays the rent late more than three times in a year, we will terminate the tenancy or will not renew the lease.

Tenants can think whatever they want about all landlords being rich. They can imagine mythical vaults crammed full of money. There is no cure for this particular piece of ignorance that we, as landlords, can provide. Regardless of the mistaken notions of tenants, we still need to make clear that prompt rent payment is vital. If we don’t make that clear, if we don’t stress the importance of on-time rent payments, if we don’t believe with all our hearts and minds it’s important, neither will our tenants.

The Cheapest Marketing You Can Do

Copyright 2020 Cain Publications, Inc.

by Robert L. Cain

You have a vacancy. Now you get to clean up the unit, do some painting and carpet cleaning, tidy up the front and put it on the market. Then write the ad. That might take a while since the last one didn’t work too well—in fact, the only calls you got were from people who shouldn’t rent a Barbie playhouse.

You’re still not done. Now you have to place the ad and pay for it, unless the only place you run it is Craigslist. Then there’s the sign. You have to put one of those up. And the flyers that go outside the unit, you need to create and print those.

Finally done with all the preparation, you have to hope and pray the phone rings and rings at a time you can concentrate on the call about your vacant unit.

Wow! All that work and much of it could have been saved.

Of course, if you breathed a sigh of relief when that tenant moved out, that’s different because all that preparation for that fantastic new tenant is worth it.

But this tenant was a pretty good one. What if you will miss her? What if the reason she’s moving is not for a new job in a new city or to buy a house? What if she told you “it’s just time for a move”? Maybe you could have avoided spending all the time, effort and money finding a new tenant.

What’s the secret? There’s no secret really. Small Business Marketing Strategies estimates, “Acquiring a new customer can cost 6 to 7 times more than retaining an existing customer.”

An article in Entrepreneur Magazine pointed out, “It’s a truism that long-time customers are vastly more profitable than newcomers, yet most companies keep better track of office supplies and magazine subscriptions than they do of their customer relationships.”

That’s for normal brick and mortar businesses where they send salespeople out to call on existing customers and find new ones. But landlords, assuming their units are relatively full, can concentrate on the customers they have. Keeping an existing tenant costs even less than the retail industry standard for keeping a customer.

You have to make repairs anyway, so there’s no extra cost there. You have to do preventive maintenance anyway, so there’s no extra cost there, either. You will have to repaint or recarpet sometime, so there’s no extra cost there, either. The only extra cost might be for saying thank you occasionally and patting yourself on the back.

Do you have a tenant-retention plan? It doesn’t have to be complicated.

How about a “thank you program”? You can reward tenants every so often with a $20 gift certificate to such places as, Starbucks, gas stations, local department stores, or anywhere else your tenants might like to shop. Gee, $20! Why that would buy a whole line in the Sunday classifieds for about an hour or three days on an apartment rental site. At lease renewal, you could also provide a catalog of gift items that your renewing tenants can choose from that cost maybe $75. That’s a whole line in the Sunday classifieds for an entire day. One such website is choose your com. You can even set up your own private-label gift site. That should truly impress your tenants.

How about telling your tenants what you did to make their home more pleasant and livable? Believe it or not, tenants do not think about their landlords all the time, or even that often, unless their landlords aren’t doing their jobs. Then they think about landlords a lot. Since you do your job, your tenants don’t think about you that much except when they write the rent check. So tell them all the wonderful things you did to keep their homes great places to live. You can do it with a short note, an email or a full-blown newsletter, depending on how many properties you have. What’s important, though, is that they know what you do for your properties and them.

But even if you aren’t willing to spend money and time on your good tenants to keep them living in your property, at least send a thank you note. If you hand deliver it, the cost is only that of the paper you wrote it on and an envelope Mailing costs a little more, 55 cents. Is it worth 55 cents to keep a good tenant?

They don’t know you care unless you tell them. There are numerous ways to tell your good customers you care and to keep them as your customers. In fact, if you do it right, they might never move. Just think, a long-term, regular-paying, good-neighbor tenant

Appeasing the Anti-Pet and Pet-Free Resident

I found this excellent column from Pet Screening
Visit their site at the link below

Admittedly, pet owners can sometimes look through a narrow lens. Their pets are everything to them, and they often can’t fathom how anyone could see it differently.

But at a rental property, some residents are between pets, some choose not to own them and others simply don’t like them. Perhaps they experienced a dog bite when they were younger, have allergies to certain animals or have other reasons as to why they’d rather avoid them.

While pet enthusiasts might not be overwhelmingly sympathetic to these individuals, they are not vastly unlike any other resident. Like anyone else, they want a comfortable home, but finding one that doesn’t allow pets is becoming more challenging. After all, 60 to 65 percent of residents own a pet and there are an average of 1.3 pets per household.

As a property manager, ways exist to strike a balance. Although you probably allow pets at your community, it doesn’t mean you can’t find a way to create harmony between your pet residents and those who would rather not interact with them.

You have to screen each pet and its owner to make sure it complies with your community regulations. Additionally, you should consistently enforce your pet policies to ensure an undisruptive living experience for all residents, pet owners or otherwise.

Part of creating a welcoming environment for anti-pet or pet-free residents involves understanding the factors most important to them. PetScreening data has confirmed the top three apartment-related concerns from non-pet owners. Here’s a look at each and what can be done to combat them:

Excessive barking/noise
Whether your residents are working from home, trying to sleep in or just enjoying a day at home, nonstop barking can certainly invade their solitude. While some pets are naturally noisy, the chance for disruption increases exponentially if they are left out on a patio/balcony or left inside for too long while their owners are at work. Property managers can help address this for future rental communities by documenting repeat noise-complaint offenders.

Failure to pick up pet waste
Whether it’s the unmistakable scent of pet urine in the hallways or unattended pet waste in common areas, residents are going to react negatively. And let’s face it, not every pet owner is going to be responsible 100 percent of the time. Communities can reduce these types of incidents by offering an adequate supply of pet bags throughout the community, providing regular reminders to residents about the importance of picking up after their pets and by holding offending residents accountable through DNA testing services. Companies such as PooPrints match DNA samples to determine which pet is responsible for unattended waste.

Fear of animals/allergies
Whether or not a traumatic incident is the cause, some people have an inherent fear of animals. While everyone might seem to love that cute Corgi mix, others might be terrified of her. Others might think she’s cute enough, but they are allergic to her and don’t necessarily want her swiping past their pant leg. Enforcing leash-at-all-times policies helps remove anxiety for these individuals and otherwise appeases the remaining non-pet owners.

While the rental housing industry continues to move in a pet-centric direction, having too many pet amenities can be alienating to pet-free residents. Pet parks, pet spas and dog runs are great for those with animals, but they don’t do much for those without one. While these amenities can serve as a positive differentiator for some prospective renters, they might serve as a deal breaker for others. Apartment operators should be careful to strike a balance with universal amenities if they have a strong pet presence.

Leasing offices should regularly distribute materials and post flyers that indicate they are serious about making pet owners accountable for community policies. While it’s easy to get caught up in the all-pets, all-the-time mentality, property managers have to remember the segment of renters who are indifferent to Pickles the cat and Buster the bulldog. Tactics exist to make sure everyone remains happy.

Positioning Yourself for Success

Copyright 2019 Cain Publications, Inc.

Ready, Set, Grow! Now is the time to think about where you stand in the race for success next year. It is a race, you know. It’s a race between you and a neighborhood that may be declining or improving. It’s a race between you and properties that always need updating and repairing. It’s a race between you and government and its agencies that are constantly passing new laws and regulations that not only cost you money, but make it more and more difficult to earn a fair profit. And finally, it is a race between you and your tenants.

It is a race between you and your good tenants to not only keep them as tenants, but to keep them happy customers so they won’t even think about moving. And it’s a race between you and bad tenants to get them out before they do too much damage, drive off the good tenants and get even more protection from the courts, legislatures, and city councils.

How to win your race? The first requirement is knowing what you have to do to prepare to win. John Maciha wrote in his book Musings of an Irreverent Property Manager, “Use the budget process to analyze your real estate or property management business. Are you positioned properly for the short range as well as the long range? Are upgrades needed to remain competitive? Do you need to hire more people or get more equipment?”

About the first thing you do, then, is to figure out where you are and where you want to be. What is your position in the market now? Is it what you had in mind?

As the New Year approaches, it’s time to sit yourself down and plan what you want to happen in the next year. I always have a problem doing that myself. I can find all kinds of things to do, playing computer games, working out, going for a walk, playing golf, rather than figure out what I want to get accomplished and where I want to be. It seems as if my brain just dries up. Over the years, though, I’ve learned a few tricks to get my brain off the dime. I’ll tell you about three here. You may know one or more of these already, but read them anyway. Possibly reading them will inspire you to actually do the exercise.

Brain fooling trick #1: The 20-Idea Trick
This one works for me just about every time. I can’t claim credit for it, I first heard about it from the noted motivational speaker Brian Tracy. And I am certain it is not original with him. What you do is to write down the question or problem you want to find an answer or solution to, such as “How can I attract better tenants?” Now you write down 20 possible solutions. It’s called “mind storming.”

You have to be careful with yourself. Don’t judge the ideas as you go along, just write them down. Most important, sit there until you come up with all 20. It has to be done in one sitting. No getting up, mowing the lawn, fixing that leaky faucet in a rental you’ve been putting off for a couple of months; stick with it!

The first four or five will be easy. The old standby ideas will come to mind first. The next few will be a little more difficult. By the time you get to 16 or 17 you’ll be getting some truly worthwhile ideas. That’s why you sit there and mind storm until all 20 are on paper. Chances are you’ll get so many good ideas that it will take you several weeks to implement them all.

Brain fooling trick #2: The 10-Minute a Day Trick
Jay Johnson of Note Finders of America writes, “Zig Ziglar advocates spending 10 minutes a day, immediately after awaking, writing down 10 ways you could become more effective at what you do.

“Would you spend 10 minutes a day if you were GUARANTEED to accomplish what you want? My bet is NO! Because most people don’t believe that this can work ‘it’s too simple!’ But the magic here is that it really does work— really!

“There’s brilliance in what Mr. Ziglar suggests. First, it will get you thinking about what it is you want. Second, it will get your mind on the ‘right track,’ and you will find solutions to obstacles or problems you might be experiencing. Third, you will get a continual supply of fresh ideas. And last but not least, by committing to a daily ritual, such as spending your first 10 minutes focusing upon what you want, you will open pathways to the powerful subconscious mind. The subconscious mind can help you solve any problem or over come any obstacle.”

Brain fooling trick #3: The Play with Numbers Trick
This is nothing more than basic goal setting. Figure out where you want to be financially at the end of a year, five years, ten years or whatever. Write the figure down.

Now comes the more difficult part, break the figure down incrementally to find out where you must be in a year, in six months, in a month. Then you have a goal to work toward and you are able to measure your progress.

Need more ideas on how to progress? Use Brain-fooling tricks one and two.

Positioning yourself for success takes planning. Block out some time now before the end of the year to get yourself ready to be even more successful in this landlording business next year—to win the race against the neighborhood, the government and your tenants.

Good luck and good profits.