Property management during a real crisis.

I get stressed very easily and very often. I stress about my tenants when it rains, when it gets over 100 degrees, when it freezes, and obviously on the first of every month. All my stress and one thing I have never stressed out about is the real estate market freezing because of a war.

Wow…..This blog on IREM (Institute of Real Estate Management) about “Managing in Midst of Crisis” puts it in context. And of course, as a father myself, I would be more concerned about the safety of my family and friends, but I have to admit, I have never contemplated the impact a war would have on my ability to manage effectively.

It is too easy to take things for granted – sometimes it helps to take another perspective and rethink our reality. Agree?

It’s getting hot! And that’s not cool.

My rental homes are in middle Georgia…..Not a very cool place to be in the summer without air conditioning!

This week I am having my local HVAC company go by all of my units to do an annual, pre-summer inspection. They will replace the filters, check the lines, and repair any damaged units. This is one of those things I don’t enjoy doing but I would really hate for any of my tenants to have their system break down on a 100 degree July 4th day!

Do you have a pre-season maintenance ritual? I’d love to hear how you maintain your rental units.

Laying down the law. Defining and clarifying the rules of engagement with your prospective tenants.

Laying down the law is not my natural style. I am a laid back nice-guy so how am I to lay down the law with a prospective tenant before we even sign an agreement. However, last night I listened to fellow landlord, Ian Robbins, at the Georgia Real Estate Investors Association monthly Landlording Education Group, and learned a few valuable tips on how he approaches each new tenant.

Before Ian accepts a security deposit and moves a tenant into one of his units, he says he invites them to share a cup of coffee. While at the table he hands the prospective tenant their security deposit check and their application and simply says (paraphrasing and considering this is all within GA Tenant Law), ‘I am giving money and application this back to you and not renting this unit to you until you understand and agree to the following: 1)Rent is due on the 1st, not the 2nd. 2)A $50 late fee is applied on the 2nd if anything less than the full rent is delivered. 3)Anything less than the full rent will not be accepted. 4)You will receive a Demand Letter on the 5th, giving you 2 days. 5)On the 7th I will file for dispossessory at the court. If you can agree to this and we are clear, I will rent you the home.’

I love it. Disarm the tenant before they give you a penny. Ian’s approach clarifies his position and allows him to reference that single, memorable event anytime questions arise.

I have had to go through the ugly process of courts and dispossessory a few times before and it is the absolute worst part of being a landlord.

What is your technique? How do you recommend laying down the law for your existing and prospective tenants?

Sand the floor. Spring maintenance and my rental home.

I had no intentions of refinishing my floors this weekend. Not one. However, after I installed those nice LED recessed cans, it put a bright light on my awful looking floors. So, I took matters into my own hands and started sanding the kitchen floor. It takes a certain amount of stupidity to personally take a hand sander to your pine floors, but these floors were so far gone that something had to be done and I am simply too cheap to pay someone to do it.

A relatively small kitchen took me about 3 hours to sand (twice) and put down one heavy coat of Waterlox Tung Oil. I used a shop vac and connected it to my orbital palm sander and started with 60 grit sand paper to knock off the worst spots and remaining finish. After the 60 grit, I bumped it up to 120 grit and smoothed it all out nicely. My biggest fear was that I wouldn’t be able to get the rich color back out of the wood, but after a number of tests my confidence was restored. I used a lambswool applicator to apply a heavy, even coat to the floor. After it was all complete, I shut down the house and left for the week. Next weekend, I will apply a second coat and expect that to complete the job.

Home ownership is a pain….in my back. One nice Easter weekend equaled pressure washing, recessed lighting replacement, and floor refinancing for my rental home.

What’s next? Any suggestions on projects I should tackle next?

Before Floor Finishing

Kitchen floors before sanding and Waterlox

Newly Finished Floor

After sanding and one coat of Waterlox Tung Oil.

Demanding more efficiency from my rental home via LED

This weekend I spent quite a bit of time waging a war on halogen.

We have a short-term vacation rental home and we pay for the power bill ourselves so I am making a number of steps in the home to make it more efficient – one of which was replacing the recessed can lights with LED. I have done this at my personal home and really appreciated the results.

This weekend’s project turned out to be trickier than simply replacing the trims. The old cans had to be removed from the attic side and sadly they were installed very well from below. I could not afford to damage the ceiling so I had a to pry, cut, and pull the old cans out. After several hours of sweat, I got the job done. The lights look great and best of all, I should not have replace the bulbs for many more years (they claim 25 years, but come on).

There are a number of reasons I have justified the expense of LED for my rental home, as well as my personal home. Personally, it comes down to changing bulbs and power bills. I despise them both! I always seem to have bulbs blow out at the most inopportune times and never have the replacement on hand – it drives me crazy.

The power bill is my other nemesis. I don’t expect the LED lights to impact my entire power bill by too much, but it certainly does play a part. As I have gotten older, I seem to have developed a paternal instinct to yell at my kids for leaving lights on and leaving doors open. I have started taking a number of steps in my homes to improve the overall efficiency: switching to LED, increasing cellulose insulation in the attic, finding and stopping all open points of air entry, and upgrading all my HVAC systems to higher SEER ratings. In any home, rental or not, these changes do add up. The problem is I never feel like the job is done. By the time I am 50 I will probably be living in passive-solar bunker with a grass roof and wind turbines….just maybe.

What am I missing? What other simple tips should I consider to help in my war against my power bill?

Spring cleaning. Get out the pressure washer for your rental homes!

Mid-April in the southern United States….A blanket of pollen covers everything. Everything.

This weekend I will spend some time hosing down the pollen but I realize I need more power because of the mildew from our wet winter. I can’t speak for other parts of the country, but the south had an unusually cold and wet winter and the siding on my homes have green mildew streaks. Nasty, really.

So, I will upgrade the hose power with the pressure washer and take more time going around the homes. Oh, the joy of home ownership!

Tell me about your region and what spring cleaning means to you.  Pressure washing? Window cleaning?

Most successful marketing for your rental home?

Since 2002, I have owned and renter a small, 2 bedroom home that is lucky to be located on a busy, country highway in middle-Georgia. The home is tucked away from the highway so it is not visible from the road and over the years I have tried various forms of marketing, such as CraigsList, the local paper, flyers, and signs.  The most successful marketing tool for this house is the most obvious, and the most low-tech:  a simple  ‘For Rent’ sign.

The road is a two-lane country highway so I had several failed attempts with cheap signs because the first truck that goes by blows the cheap sign down. So I had to step up my game and ordered a large, more substantial 24 x 36 sign. It holds up great.

The sign generates about 20 calls per week, which can be overwhelming because most are tire-kickers, so I setup a local number on Google Voice (free) and simply setup the Google voicemail with a quick description of the home with the price. I like this method because the people get what they need and if they really want to see the home they will leave a message. What I really like is that I get email transcripts of the voice mails and can pass them to wife if necessary or handle them myself.

Obviously the ‘For Rent’ sign is not quite as effective for every home  because of location challenges, but I have to think that my Google Voice solution for filtering calls could be helpful for everyone.

What has worked best for marketing your rental home?

 

No joke. Texting tenants for rent is ridiculous.

 

 

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The text stream you see is no joke – what you see are three months of rental payment requests to one of my tenants. Most of the time I remember to text her on the 14th to leave me a check on the 15th, but quite often I forget. She always pays on time, when requested, but she tends to be just as forgetful.

For context with this particular tenant, we first tried this logistics and delivery company called the US Postal Service.  That proved spotty, at best. Then, around 2009, I discovered an ACH option that seemed decent but they had trouble consistently sending payment reminders and the whole thing was a mess. Finally, in 2012, I just asked that she leave the checks in the mailbox since this rental home is so close to me.

I share this self-deprecating silliness because I know I am not alone. I know that as independent landlords, we all get caught up in life and sometimes forget about even the most important part of rental management: the rent.

This is one of the main reasons we started RenterUp.  I personally want to simplify the process…..even if only for my sake!

 

Best investments are the ugliest

Yesterday I was with my family heading to the Dogwood Festival in Atlanta at Piedmont Park. We were enjoying the nice weather and walking along the sidewalk admiring the charming homes, mostly all 1920’s bungalows. Along our walk I noticed some fine details on an old, run-down home hidden behind messy shrubs and a rickety old fence; frankly, you could hardly see the house behind the mess.  “This house!” I exclaimed to my wife. The responding look from my wife was priceless. “What?” she asks, “What exactly do you see on that house?” My response: “I see value.”

This was the kind of house that has value written all over it. Why? Demand is low for ugly homes. This particular home was surrounded by others valued around $600k and I would argue that $350k-400k would be a fair price in its current condition. Obviously this is still a lot of money but the same idea holds true regardless of the surrounding price range. I like to ask myself, “How much value could I extract from one day’s work?” In this instance,  a chainsaw and a shovel would have done most of the work!

I will never forget the first time I invested in the ugliest home on the street. I tore out a rotting screen porch, dressed up the front yard, painted the exterior, and updated the interior. The hardest part is buying it right, but there is something very satisfying about rehabbing an old home – like you are lifting the entire street.

Whether buying a home to rent or buying a home to flip, I recommend considering the curb appeal if you appreciate a good value for your real estate investment.

What do you look for in your real estate investments?

 

“Daddy, what’s a fax?” asks 10yo daughter

I am the owner and landlord of 7 rental homes in Georgia and fielded the funniest question from my intelligent 10yo daughter the other day: “Daddy, what’s a fax?”

“Oh sweetie, I am expecting to get a contract signed on a lease for one of my rental homes and the new tenant will fax me the agreement – they will send me a copy of the agreement over the phone line.”

“Daddy, why wouldn’t they just email it to you?” she replies.

Hmm. Why wouldn’t she just email it?  This is one of the conversations that spawned my desire to develop a better way to manage properties. Simplify the process.

In 2000, US Congress passed the Electronic Signature in Global and National Commerce Act to facilitate the use of electronic records and signatures.  Now, in 2014, there is no reason to fax or mail contracts any longer. None.

It’s time to simplify the process.

Do you agree? Has your state gone against the ESIGN Act? What is stopping you from going  digital?