Landlording Skills Worth Big Bucks
by Fixer Jay DeCima
That saying comes from the fact that I charge 10 percent for managing properties.
I dont manage properties for others anymore, but years ago I did to help keep the wolves away from my door.
If youre just starting out with your investing career and you already have a little experience managing a couple of your own properties, Im sure your net income is minimal, especially for highly leveraged purchases. If so, you might consider managing a few extra houses to prop up your income. Charge 10 percent because it is worth that much!
Do you need a license to do that? Yes.
Many small mom and pop type investors give up the opportunity to make a ton of money and have a wonderful free come and go lifestyle simply because they never see the importance of learning to be a skilled landlord. You dont become a skilled landlord when you acquire houses. You become the owner ” thats all. Skilled landlording will take some education.
Basically theres just two ways to learn landlording! You can learn from people like me or you can learn from the tenants! I will tell you right now, if you pay me 10 times more than I charge to teach you, its still cheaper than learning this job from the tenants.
Every landlord should know and understand landlord/tenant laws in his own area. Once you know the laws your fear of renters or of being intimidated will vanish. An overwhelming number of property owners incorrectly assume these laws favor deadbeat tenants. I can assure you this is not the case. Laws are mostly about equity. Its well to remember there are unscrupulous landlords the same as naughty tenants.
Landlords who learn to act before small problems become big will control most tenants. This strategy works well for collecting rents and also for enforcing your tenant rules. Speaking of rules: many landlords have far too many rules. Its best to keep your list of rules short and enforceable rather than long-winded, without any teeth.
One of the most important questions all landlords should ask themselves is, What would I rather be, popular or profitable? Dont let your mind wander here. You dont have to be a greedy person to become a wealthy landlord. What you must be is a fair-minded business person. Fair-minded business means that accounts receivable (rents) are collected in a timely manner and that your business assets (houses) are maintained properly by the tenants who lease them. See how simple this stuff is?
Rent monies are life blood to apartment owners. Yet, I know many property managers and owners alike who participate with their tenants each month in a silly little rent collection ritual. The tenant starts the game by saying the checks in the mail. Then the landlord begins calling every day or driving out to the property to inform the tenant he hasnt received it yet. Sometimes this goes on for weeks.
Playing this game will only eliminate whatever respect one party may have for the other. It generally leads to more bickering about other matters as well. Dont allow yourself to be part of this game. Youll fare much better if you simply use the rules already on the books. Im referring to your state landlord-tenant civil laws and, of course, your own rental contract terms, agreed to by your own tenant.
Landlords will not be disliked or hated any more than the supermarket cashiers or bank tellers when they demand timely rents. Everyone knows that cashiers will not allow groceries to leave the store until they collect the money. Customers expect that and they dont feel hateful toward cashiers or bank tellers for following the rules.
Landlords who insist on timely rent payments are no different than cashiers in the supermarket.
Over many years, Ive discovered the key to easy people management is to keep emotions out of the daily management process. Youll find its almost impossible when you visit tenants every time something becomes an issue, whether its about collecting rents or rule enforcement. I have a much better way. If you wish to improve the quality of your landlord life write short notes or memos to your tenants about concerns. When you sit down, think about what you wish to tell them, youll be surprised how unemotional communication becomes. No shouting, bickering or name calling. Just the facts. Always keep copies!
Enforcement of the rules, whether were talking civil code (laws) or your own house, rules is the best way you develop a smooth running management operation. Preventative techniques are as important to managing tenants as they are for the doctor who manages your personal health. One of my main criticisms about professional property managers is that they very rarely act. Mostly they react! Theyre always ready and willing to fix the busted door, but only after the horse is outta the barn!
Jay P. DeCima, known to many as “Fixer Jay” is a seasoned real estate investor with more than 40 years of hands on experience; nearly half that time has been devoted to Jay’s specialty – fixing-up rundown houses and adding value. Fifteen years ago, Jay Decima began teaching others about his money-making strategies at seminars and at his popular house fixer camps in Redding, California.
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