Most of my rental properties are 100 years old. The major operating systems (heat, wiring, etc.) have been updated, of course. And with some of them, I replaced cabinetry along with the initial rehab. This duplex had older wooden cabinets that had a few good years left in them. I had ceramic flooring and a new bath installed last year, and after a recent move-out it was time to update the kitchen.
I used stock, pre-finished oak cabinets from my local big box store, and one of the formica “grant lookalike” countertops they keep in stock. I think they look fabulous, and this place should rent quickly.
My investment goal 20 years ago was to buy and hold, for income and long-term investment. And with each improvement I make beyond the initial rehab, Im:
- Making my rental more attractive to potential tenants, thus drawing a better quality renter.
- Improving the value of the home itself, thus making it a more attractive purchase to a buyer, when it comes time to jump into my exit strategy.
So, every improvement I make, I keep these points in mind. Is it adding value in the eyes of my next tenant? Is it adding value down the road, when I decide to sell? If so, then go for it!
Over the past 20 years as a landlord in Indianapolis, I’ve learned a lot by trial and error … a lot of trial and a lot of error! And one thing I know for sure is that the secret to happy land lording is to attract and keep good tenants. And it all starts with:
- Curb Appeal — I assume my prospective tenant will do a drive by before meeting me or pursuing an application process. With that in mind, I do as much low-cost/high return sprucing up as possible. (Fresh paint, at least on window trim and front door, minimal landscaping like some perennial flowers or shrubs, mulch, window washing, a door wreath, new lighting, a pot of flowers or hanging flowers on the front porch.) This mini-facelift can make the difference between someone driving on by, or pursuing your rental as their next home.
- Good Screening — As I’ve mentioned before, I use National Tenant Network as my screening tool. They’re quick and efficient, and after filling in the tenant’s personal and work info, I get a qualification score back immediately through the website. A basic screening costs anywhere from $20-$36, depending on how detailed you want to get. (I go basic.)
- Quality Workmanship — Your unit must be in good working order and immaculate throughout. Would YOU live there? I always make sure there are no leaks/repairs needed, the entire unit is clean and paint is fresh.
- Be Attentive — Once your wonderful tenants have signed the lease and moved in, don’t abandon them! Stop by (give them notice, of course) and say hello occasionally. This will also give you the opportunity to see they are taking good care of the place. If repairs come up, take care of them immediately!
- Reward Good Behavior — When you come across those tenants who are just downright spectacular in every way, i.e. they pay rent in a timely manner, keep the home/yard clean and are a great addition to the neighborhood, give them perks as evidence of your appreciation! A gift certificate to a local restaurant or grocery store, a “coupon” for a dollar amount off their next month of rent, etc. Be creative, and always put a personal note with it expressing your gratitude.
I have people who’ve been with me for years, and I do appreciate them. I try to keep rent prices reasonable, while making a decent living for myself.
The nice side effect of attracting good tenants is that good news travels. Those great tenants (who also appreciate your excellent land lording) tend to spread the word to their friends and relatives, thus bringing more quality people into your rental world. Your good tenants will network on your behalf. Nice (free) perk for you, right?
Onward and upward! 🙂
As you know, I’m all about saving time and money. I’ve done a few posts on painting tools, tips and techniques. As an entrepreneur, I enjoy watching the TV show Shark Tank (ABC) and they featured a great new product I’d like to share with my readers:
It’s called The Paint Brush Cover. Whether you’re a landlord, real estate investor or homeowner in the middle of a painting project, you rarely finish it in one session. So, what do you do with that brush? I’ve usually wrapped it tightly in Saran Wrap and it’ll keep for hours or even a couple days if need be.
Well, this product is air tight, made of plastic, and holds almost 100% humidity! Therefore, it’ll keep that brush moist and ready to use for weeks if necessary! Truly a time saver! And it accommodates brushes up to 3″ wide.
I’m going to order one at http://www.paintbrushcover.com. And by the way, when you’re totally done with the project, don’t forget to clean your brush the right way. Paint brushes are expensive … around $10-15 if you get the right brand. (I recommend Purdy or Wooster.) I use warm soapy water (or my trusty Krud Kutter) and a stiff wire brush to remove all the paint from the bristles. Start in the spine, up close to the handle and brush down to the tip of the bristles. A good brush should last for years if you treat it with love and kindness. 🙂
I’ve owned and managed my own rentals for 17 years now, manage other properties, have written a book about the business, recently got my realtor’s license, and am going to be getting my broker’s license soon. I’m frequently asked, “What does it take to be a property manager? What personality traits are essential?”
I’d never thought about it but here’s the short list:
- You must be very organized. There are records to keep, tenants to manage, etc.
- You must be laid back. Things happen that are beyond your control and you have to roll with it. (Hmmm … organized and laid back? Those qualities don’t appear very often in one individual. Most laid back people aren’t organized. Most organized people aren’t laid back.)
- You have to be willing to evict people quickly when they get behind in their rent payments. This is an income-producing business, and although tenants run into rough situations, you can’t let your heart rule your head. You can’t just hope they’ll get caught up next week, or next month.
Tenant management issues are the main thing that drive people out of this business. I’ve learned — the hard way — to stick with my lease agreement. I’ve modified it through the years and it’s short but air-tight. It protects me from all of the “sticky” situations that can pop up, and I know that if I adhere to it, I’ll be okay.
So for those who are considering buying their first rental, my advice is to educate yourself before jumping in. Look at your finances, your personality, your risk tolerance. And if you’re still excited about the possibilities, go for it, and enjoy the journey!