Rental and Cashflow Property - Management, Strategies and More

This may come off sounding a little harsh, but I believe the vast majority of landlords out there are absolutely terrible.

I'm not just referring to the way they treat their tenants, though that is a problem as well. I'm talking about the way they run their business. I believe being a landlord gets a bad reputation largely from those who fall into this "terrible landlord" group, but in reality -- being a landlord is not an impossible task and success can be found.

The following are five tips for being a successful landlord, most learned through mistakes I've made in my own landlording journey. If you have any additional tips, I invite you to share them in the comments below the post!

1.) Treat Your Business Like a Business

We have a house that was rented to a couple that has recently split..now he lives in the house and he has sent the last few rent check (late by a few days). the rent is due on the 1st. Last week he emailed and said he had an accident and didn`t have the money, But would send it when he got paid last Thursday (5th)..still no check in the mail..I emailed him yesterday (8th) and asked if the check was in the mail yet and he hasn`t replied..I know he gets his email instantly on his iphone. so he is ignoring me..The lease is up Sept 1st and he obviously can`t afford to live there, so we could get him out by then, but in the meantime...what would you do?...send him a registered letter?

If you’re a real estate investor, the first activity you probably initiate post-purchase is the property’s renovations or upgrades.

Quick and smart property renovations help to ensure that you’ll have a tenant moved in sooner rather than later, and can also significantly increase the property value in the event that you’d like to sell for a profit in the future.

In the short run, we all know that property upgrades will result in higher rental income opportunities. People are willing to pay more for a nicer place; plain and simple!

However, you must be careful not to “over-improve.” Certain upgrades, although desired, are not necessary for rental properties; they can in fact break the bank.

In today’s market landlords are looking to buy more properties due to discounted properties
and the demand from renters. Even though it would be better for somebody to actually own their own property,
it's not that easy in today's economy, so rental units are in demand.

Vera Gibbons wrote an article Zillow.com entitled, Everything You Need to Know About Today’s Rental Market

Home builders are really happy right now, but it’s mostly just those working on multi-unit housing. Apartment starts are up 416 percent from the 2010 low. Builders are anticipating even more growth in rental demand.
One reason for this growth in apartment construction is that new household formation in the next few years is anticipated to be coming from lower wage-earners. With home prices rising, these households will not only be looking for rentals, they’ll want lower end rents. Apartments are definitely much less expensive to build than single family homes, so rents are always much lower.

1. Stay nearby
Never purchase financing properties out of your local area. Even the most knowledgeable real estate investors have experienced issues when investing outside of their safe places or local areas

2: when you purchase, don’t pay more
If you are paying the current market price, then you are probably paying too much. When you purchase below market, you are free to decide if you want to hold, flip, or wholesale.

3. Set aside rental installment capitals
As you must expect vacancies, preferably you should have three to six months of rental payment reserves. On the off chance that you need to dip into your reserves, renew them!

4. Set aside a slush reserve for repairs.

Rental properties can be extremely profitable in any economy. The advantages should be obvious. To name a few, monthly cash flow, appreciation in value for a long term investment, and with the uncertainty of the economy and people losing their home to foreclosures many new properties are on the market at a reduced rate and many more people are turning to renting as the only option.

If you are considering rentals as an option for your portfolio now is an ideal time to do so. Armed with the right knowledge of how to succeed with rentals you can positioned to profit from the current economic condition. In fact you can do so wildly and becoming wealthy in the process. Imagine recurring monthly income from stable long term tenants.

If you owned a service business with employees, you’d be at severe risk if you were operating without an employee manual. Specific policies and procedures protect you from employee errors, but if they err anyway, you have proof of your instructions to protect you in case of a lawsuit.
If you’re a landlord, you’re not in an employee situation in most cases. However, your tenants can actually be a bigger risk factor than employees. From property damage to security deposit disputes and liability issues, you should be taking action to protect yourself. Sure, everybody has a lease agreement, but if that’s all you have you should be doing more. The plan is to set expectations upfront to manage your tenant relationships.

As foreclosure inventories begin to dwindle, but investor competition remains strong, where is the enterprising rental property investor or wholesaler to go for good deals? It’s true that we still have a pretty good stream of foreclosures, but they won’t last forever. In the best rental markets, there’s a lot of really stiff competition as well. It’s been a great run for investors from 2006 when the crash began. Tens of thousands of new rental property investors have entered the business.

I had someone ask me if it were possible to retire with $100K in Minneapolis: My answer was absolutely, but you would need to use the $100K for down payments and get financing on the rest and be very selective on the rentals you purchase. Twin cities is a good market, but taxes are a little higher and there is less govt subsidized housing as there is in OH, MO and IL. The key would be to find properties that you could get for <$40K that are rented for >$800-$1000/month and use the $100K to put 20-30% Down and buy 10 of them that would NET you $400-$500/month each after all costs.

Hope this helps!

Dave