Indianapolis Tops Another List

I came across this Zillow article today and was pleasantly surprised. Yes, we know our rental market is strong and will continue to flourish. But for many would-be homeowner/investors who’d like to rent their homes, they find the costs associated with owning that house aren’t covered by the rental income they receive. This is especially true on the east and west coasts, and in many larger cities. But not so with Indy! Here’s the article:

Return on Rent: In Most Major Markets, Most Homes Can Be Rented Out For A Profit – Zillow Research

As this article shows, more than 98% of homes here can be rented out for more than their monthly expenses, i.e. mortgage payment, insurance, taxes, maintenance, major improvements, etc. So, more and more homeowners are considering jumping into the world of real estate investing. And, what better time than NOW?

Onward and upward ……  🙂

 

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Best Sealer/Primer

I’ve tried them all … from Kilz to Zinsser. Most of them are too thin, even the oil-based ones. I stumbled upon the best one ever, made by PPG. I have an account there, and I love their Hi-Hide brand of interior paint. I had a major “issue” to take care of at one of my rentals, as seen here: my tenants decided to have a painting extravaganza (unbeknownst to me), with these horrifying results.

(Don’t ask me what that red thing in the corner is — I have no idea.) Anyway, the PPG rep suggested I try their Seal Grip Universal Primer/Sealer. They even tinted it to match the color I was going to use in the rooms. It’s water base and doesn’t have that annoying toxic smell that some do, so I was happy to give it a try. I’M SOLD. It’s nice and thick and only required one coat before moving on to my normal paint color. Here’s what it looks like:

The house is back on track and ready to rent, and I’ve discovered another great product to add to my long list of “faves” I share with my readers!

😎 Onward and upward ….

Major Fail

I do my best on the screening side with my tenants. For my low-income demographic, I don’t run credit checks; many of them either have no credit, or poor credit. But this doesn’t necessarily disqualify them. If someone has a solid job history, a good recommendation from their prior landlord, I generally give them a chance. And I, of course, do apartment checks, to ensure they’re taking care of the place.

But things don’t always work out. I did my first walk through on these people about three weeks after they moved in, and I was NOT pleased. I warned them, in writing, that the situation needed to improve fast, but — fortunately — they neglected to pay rent the following pay period, so I immediately filed eviction. (Here in Indianapolis, the court date is two weeks after filing, and the judge orders them out five days after the court date.)

So, in that three week period, things deteriorated further and the video above shows  what I faced after they moved out. Luckily, this doesn’t happen very often! But when it does, I get to work right away … no tenant = no income. This place was up and running within a week, and my new tenant has been delightful.

Onward and upward!  🙂

 

Rental Property Myths

When people ask me about owning and managing my Indianapolis rental properties, I get the same questions/comments again and again. Here are the most frequent  myths I respond to:

  • “I’ll bet you’re always getting calls in the middle of the night!”  No, in my 21+ years of doing this, it’s rarely happened. Yes, I’ve received calls on the weekend and/or in the evening, if someone has an emergency, like if a furnace goes out. But fortunately, I have my trusted contractors to call, and they can take it from there. I’m not making trips to my rentals on those calls. And if it’s something minor (which it sometimes is) I have them wait until the next working day.
  • “Don’t you get tired of your tenants totally trashing the places?”  Well, I’ve had tenants leave trash behind after a move-out, for sure. When I’ve evicted a person, sometimes they take what they need, and leave the rest. This happens more often in the lower economic demographic. But as far as vandalizing/destroying the apartment, out of anger or resentment, no. If you treat your tenants with respect, this doesn’t occur.
  • “I’ll bet you’re making a ton of money!”   Uh, no … When you buy rental properties, you’re buying for income, yes, but also for long-term investment. It’s not a “get rich quick” proposition. If you’re buying with a loan, you want to make sure your rent will cover more than your loan payment and other expenses (i.e. taxes, insurance, utilities, etc.). You can make a “ton of money” if you buy a ton of rentals, for sure. But the commercials you see on TV are totally exaggerated! Don’t buy into that crap!
  • “You’re a slave to those properties…you don’t have a life of your own!”  That depends on a couple things: if you fix them up well in the first place, you shouldn’t have many major repair issues going forward. And also, you have the option of hiring out the management if you don’t have the desire, personality or time to do it yourself. The cost per month is usually 8-10%/monthly rent, plus a percent of the first month’s rent. But beware — good, honest property management is hard to find.

So there you have the comments/questions I get most often — all myths. This business is intricate, demanding, frustrating, and very rewarding. I don’t regret beginning my journey all those years ago, and I do my best to educate others before they jump in. It isn’t for everyone, but for many, it can be part of a smart, long-term investment strategy.

Onward and upward!  :-))

 

Best Landlord Practices

It’s a competitive market out there. How do you attract and — more importantly — keep great tenants? For me, there’s a simple answer: show them you care about them and the home they’re renting. Here are some things I try to do on a regular basis:

  • Make sure every unit is clean and in great, working condition before showing to prospective tenants. I always supply shower curtains, toilet paper, and entry rugs for “starters.”
  • Maintain the exterior of the home. Trim bushes, pull weeds, paint when necessary. When your tenants see you taking care of the outside, they’ll be more likely to take care of the inside!
  • Tell your new tenants about the positive points of the neighborhood — locations of parks, schools, grocery stores, etc.
  • Review all points in the lease and make sure they understand and agree with how you run your business.
  • Be available to the tenants. I respond quickly to every call and text during my waking hours. This sets me apart from other landlords or management companies who are lax about returning calls.
  • Take care of repair issues promptly. Again, I try to get someone on the repair the same day if at all possible, which shows my tenants I care about them.
  • Let them know you appreciate them! Every year at Christmas, I deliver a small (food) treat to each of my tenants, and wish them a wonderful holiday season.

Some of my tenants have been with me for years, and I love it when my good tenants refer other good tenants to me. When you treat people fairly and with kindness (not leniency — there’s a difference!) they often return that favor. The Golden Rule lives on ……

Tordon!

With 22 rental units in Indianapolis, there’s a lot to take care of, including exterior trimming and cutting. I have my tenants take care of the grass cutting, but two or three times a year,   I go down there and cut back tree limbs, shrubs and weeds that have gotten out of control . It’s not a job I enjoy, but it needs to be done.

In a couple weeks, I’m having a tree guy go to six properties and do some major trimming. I have limbs overhanging roofs and gutters, etc. He’s also going to cut down several mulberry bushes that are growing in fence lines at a few of my properties. Annoying! Mulberries are nuisance bushes that grow like crazy, and the berries attract flies…more annoying!

So when I was talking to him about the mulberries and how to kill them, he suggested I buy a  product called Tordon. The nice thing about it is that you squirt it on. I’ve used Fertilome Stump Killer in the past, and I applied it to the exposed cut surface with a sponge brush, kind of labor intensive.

So after he does his “cut down” and I do mine, I’ll apply Tordon. I bought several quarts of it from http://www.treestuff.com.  It’s also effective on poison ivy, and I have a couple of big vines that I’ll attack with it.

Buy some, and say bye bye to those nuisance trees and bushes!

Rubberized Flooring?

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I’m always looking for durable flooring to put in kitchens at my Indianapolis rentals — something easy to clean, easy on the feet, and a surface that won’t show dirt or scuff marks. I came across Amorim Sports Floors at Lowe’s and thought I’d try it in one of my smaller kitchens. (It’s not cheap, at around $100 for a 4×10′ roll.)

As you can see in the picture, it’s black with a little fleck in it, which makes it great for basements, playrooms, workshops, pet or utility rooms, and in my case, a kitchen! This floor comes with a five year warranty, and is easy to clean and install, with a utility knife and a straight edge.

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You can lay it and secure it with double-sided tape, to keep it from moving around. I had my handyman do it for me, and he removed the quarter round, laid the floor and reinstalled the quarter round over it.

The floor’s been down for over a year now and still looks new. I’m done with sheet vinyl … it’s just not durable. I do have ceramic in a couple of places, but in homes that are sometimes 100+ years old, you often have to install a new subfloor before laying the tile, and it can be a very costly project. With this type of floor, it doesn’t matter if the floor isn’t perfect in every area. And it’s so easy on the feet!

I’m going to give it more time before giving it a 4-star rating, but it may be a great option for future kitchen, bath and laundry areas. Amorim may be the answer!

Gotta Love It

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You don’t have to have a lot of money to keep your home looking nice. Here’s proof of that. This little house is on a street in downtown Indianapolis, near one of my rental properties. It’s definitely a lower-income demographic.

Regardless of the season, the family that lives here manages to “dress it up” outside — I see the mom outside in the nice weather, trimming and weeding, sprucing up here, there and everywhere. The potted plants, yard art, wind chimes, et. make me smile.

With the holiday season just around the corner, I’m excited to see what’s in store for this happy little place … More pictures to come!  🙂

 

Tenant of the Month

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Meet Shuyu Li … his friends here know him as Terence. I stopped in while he was having a lunch of Chinese noodles, juice, and a little touch of pop culture on the side … the energy drink! LOL

Born and raised in China, Terence is attending grad school here at IUPUI in furniture design. He was given some scholarship monies to attend.

He responded to my ad on Craig’s List, which I also posted on Postlets. (When you put a property on Postlets, it automatically goes to Zillow, HotPads, Trulia and several other internet sites, all free of charge. Postlets is another excellent marketing tool I use to get the word out about my Indianapolis rental properties.)

I mentioned the proximity of my property to IUPUI in my ad, hoping to attract someone like Terence — a serious student, not a party animal! He lives in one of my duplexes, which is about 100 years old but very sturdy and in great condition, everything updated.

There was one glitch on his application. He wasn’t employed so he volunteered to show me his bank account balance as verification of funds/ability to pay. It was in Chinese. LOL! Anyway, we worked through it and he’s been fantastic. He lives simply … Terence ordered all of his household furnishings on the internet (a bed, a shelving unit, his card table where he’s sitting to eat Chinese noodles in this photo, etc.) and had them delivered. He purchased a bike to commute to school, which is about 1-2 miles from the house.

On school breaks, he travels to California or Hawaii, where he has some relatives. He’s hoping to have his parents come from China to visit sometime this summer. I hope to stop by and meet them while they’re here, although I don’t know if they speak English at all …

Terence has been an excellent tenant — here’s to diversity!  🙂

 

Small Money, Big Improvement!

IMG_1645[1]I try to make small improvements to my Indianapolis rental properties each time a tenant moves out. Kitchens and baths are the two most important rooms, in my opinion … for the other rooms, if you have fresh paint and decent floor coverings (I suggest carpet for the bedrooms, for sure, and I usually put it in the living areas as well), it’s all good!

But the kitchen and bath need to be fresh, clean, and updated where possible. The cabinets in this duplex were very old, metal ones that had been painted. I’ve had the house for over ten years, and it was just time to get rid of them. The drawers weren’t shutting well any more, and were rusting out in places.

IMG_1723[1]So I bit the bullet and had my handyman install these stock cabinets from Lowe’s, prefinished, and a stock counter top. The counter top is just formica, granite look-alike … so inexpensive, but durable and nice looking!

So, for under $1000, I have a new kitchen, which attracted a good-quality tenant who was excited about the update!

Of course, I won’t take the “good quality” assessment for granted … I’ll do apartment checks periodically, as we all should, to ensure our tenants are caring for the property and keeping it in good condition.

As I look to the new year, I hope to serve more people in need of reasonably-priced, clean housing. Establishing good relationships with tenants, taking care of the properties I manage … these are the keys to a successful 2015!

Happy New Year!