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December – January 2015 Rental Cash Flow

packs-163497_1280-PDThe rents were almost all collected and deposited by 1/5/2015, so the rental cash flow was consistent with previous periods.  I do have one tenant that paid $400 for the first installment of the rent.  The same tenant seems to struggle, but since she has been there for a while, I let it ride.   Any new tenants I took in over the past few years, they must pay late fees.

So, as has been the case for a considerable time, all rents were collected in a timely manner.

Continue reading “December – January 2015 Rental Cash Flow”

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What is the Meaning of Financial Independence?

option-112225_1280-PDThere are many people that read this blog that are striving for financial independence.  Financial Independence is more of a state of mind, than a financial thing.  If you are in the USA, you may consider yourself financially independent as soon as you become an adult.  Others wait until they are not working, are retired and on Social Security.  Lots of people just want to be able to quit the rat race, and enjoy life.  Still others are longing to achieve one of the main things that many people cannot, freedom.  Continue reading “What is the Meaning of Financial Independence?”

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6 Insane Landlording Stories That Prove the Importance of Tenant Screening

earth-237955_1280-PDOver the years, I have made many mistakes on tenant selection and have had the privilege of accumulating landlording stories. There is always value to a landlord education, even if provided by a tenant, and in the real estate game, the education can be very pricy. Almost all landlords have made similar mistakes, and it costs them dearly. Only the well capitalized or lucky landlords live to try it again.

One of my first rental investments was a couple of duplexes. I had one all cleaned up and ready to rent. Since I knew Section 8 was a guaranteed way to get rent, I figured “How can a landlord go wrong with that?” After all, most people are decent people and want to respect the property and the landlord. I quickly learned the hard way that tenants are not always that way.

Read More Here.  I have listed the landlording stories and lessons to be remembered.

6 Landlording Stories That Prove the Importance of Tenant Screening

 

Do you have any interesting landlording stories?  Or even a good renter story?

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How to Get the Best Tenants into Your Rental Property

When you have a vacant rental, you will inevitable have to advertise and fill it. Unless you are extremely lucky, you will not rent to the first person who inquires on your rental — or at least the first person will not likely be qualified to live in it.  You want to get the best tenants you can possibly attract to your rental.

Like it or not, you will be at some point showing your property to tenants that do not want to rent from you, or you do not want to rent to.

At some point, you will need to decline a rental applicant. This is one of the main problems landlords have: being unable to decline a tenant.

See the rest of the story here

 

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November – December 2014 Rental Cash Flow

packs-163497_1280-PDThe rental cash flow for the month was as expected and according to plan.  All rents for December 2014 were in hand by Friday, 12/5/14.  That is 24 for 24.  All units were full, with the exception of my one vacancy that I have been working on for a few months.

I generally have ~10 to 15% of the rents in prior to the first, 50% in by the first, 75 to 90% of the rents in by the seconds of the month, and 100% by the fifth of the month.

Continue reading “November – December 2014 Rental Cash Flow”

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Tenant Credit Score is Easily the Best Indicator of Tenant Quality: Here’s Why

credit-40671_1280-PDI know many landlords, and despite my success at screening and selecting tenants, they often think somehow their property is different from mine. They do not think they can use the tenant credit score as a reliable indicator. They are ignoring tenant credit score to their own peril.

The fact is, tenant credit score is the most reliable indicator of tenant success that there is, bar none. You need to make sure that the tenant can afford the unit with an income of 3.5x the rent, but the tenant credit score will weed out the people that have behavioral issues and have no problem cheating anyone that they owe money to.

If you are a landlord, you know you need to do a background check. A critical piece is getting a credit report, complete with a credit score. The credit score is a summation of everything that goes on a credit report. It is calculated the same every time, with no bias to any discriminatory practices. It is colorblind and not subject to any fair housing issues.

Read More Here

What do you think of using tenant credit score to predict tenant payments and behaviors?

 

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Best Home Improvements to Increase the Value of Your Home

It’s the question that nearly every landlord wants the answer to: What are the best home improvements to make that increase the value of my home?

Ultimately, you aren’t just embarking on your improvement project to increase your standard of living, you’d hope that there would be some return on your investment as well in terms of an appreciation in the value of your home.

Unfortunately, the question of which are the best home improvements is one where there is no one size fits all answer, and it would be foolish for us to assume that. It will depend on many factors such as the location of your home, preferences of the local market, the state of the economy, interest rates, and you could probably come up with a list the size of the Empire State Building listing numerous other examples!

Read More Here

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Month to Month vs Annual Lease: Which Protects Landlords?

hand-376212_1280-PDWhat are the advantages of a Month to Month vs Annual Lease?

When renting out property, many landlords want to lock in a new tenant as soon as possible, and they want to lock them in for as long as possible. It makes sense — until you begin to look at all of the commitments that you are making and how little of a commitment the tenant is making.

As soon as you know you are going to have a vacancy, you want to begin marketing. If your existing tenant is a slob, a hoarder, or being evicted, it is extremely difficult to attempt any turnover until you have a vacant unit. With a long term tenant, you just need to factor in a bit of vacancy time to clean up and repair, as well as some down time until you find a tenant.

Worst case, it was a one year (or less) tenant and you have to wait for the tenant to move out to show it, you can look in the mirror for your issue. You should have bypassed this tenant.

Continue reading “Month to Month vs Annual Lease: Which Protects Landlords?”

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October – November 2014 Rental Cash Flow

cash flowThe rent collections were stellar as always, and the rental cash flow is solid.  All 24 of 24 rents were in the bank by 11/3, which was the first Monday in November.  If you look back at my previous reports, you will see this is typical for me.  I can attribute it to having the ability to screen tenants and use credit score to my advantage.  I have solid units, and they are priced right.  Landlords that do not use credit score as a screening tool, and do not understand the significance of it, are fooling themselves.  They are either working too hard, or not making as money.

Continue reading “October – November 2014 Rental Cash Flow”

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Smoking in a Rental Property

no-smoking-145888_1280-PDAre you aware of the expenses associated with allowing a smoking in a rental property?  If not, you need to understand that a smoker will cost you at least 10% of your profits due to increased turnover costs and additional vacancy. That is an unscientific number, and I may venture to guess it may be much higher.

Smoking in a rental property will cost you plenty in term of lost profitability.

Continue reading “Smoking in a Rental Property”