Science Fiction or Your Future? The Story of Tomorrow’s Landlord and the “Tenant-Proof” Apartment Complex

Science Fiction or Your Future? The Story of Tomorrow’s Landlord and the “Tenant-Proof” Apartment Complex

2 min read
Al Williamson

Al Williamson is a former civil engineer with over 24 years of experience investing in real estate, including single family, multifamily, house flipping, commercial, and short-term rental properties. He’s a nationally recognized authority on short-term rentals and has been featured on many podcasts and numerous real estate conventions and REIAs since 2014.

Experience
Al worked as a professional engineer while he purchased and self-managed a small rental portfolio. His goal was to replace his engineering salary, but he got side-tracked.

Al discovered that making money without purpose was unfulfilling. So, he decided that he would only prosper to the extent he helped others. That’s how he ended up assisting an inner-city neighborhood to get back on its feet.

Al learned that landlords could provide leadership as an investment strategy. He talks about this at length on BiggerPockets Podcast episode #8 and in his first book Building Wealth with Inner City Rentals.

After Al’s neighborhood became one of the hippest places in Sacramento, Calif., he switched his focus. He realized that the majority of landlords were not collecting the cash flow they expected. In fact, most were barely breaking even before taxes. So, Al went on a five-year quest to collect ancillary income ideas to supplement his rental income. He publicly documented his journey to pay the monthly mortgage of his eight-unit apartment complex with new revenue streams that didn’t include rents.

Al accomplished this mission in 2015 and placed his findings in his book 40 Ways to Increase the Net Income of Your Rental Properties. Through writing 40 Ways, Al realized that the traditional rental business model was the least profitable way to operate a rental. This insight led him to switch his holdings into a short-term rental mode.

Upon further refinement, he optimized his operation to extended stay rentals (stay of 30+ days), because that business model yielded the same high net income with a lower hassle factor.

Al’s journey resulted in him replacing his engineering salary with income from his extended stay rentals. He “retired” at the age of 50.

Now Al coaches others through his training program, Extended Stays for Landlords, and enjoys inventing new ways for landlords to increase their income and reduce expenses.

Education
In 1989, Al Williamson graduated from the University of California – Davis with a B.S. in Civil Engineering. In 1994, Al graduated with an M.S. in Civil Engineering from the University of Illinois – Champaign-Urbana.

Follow
Instagram @Leading_Landlord
YouTube
Al’s blog LeadingLandlord.com

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To advance the mission of finding auxiliary income streams that could exceed gross scheduled tenant rents, I offer the following fictional story:

It’s pretty underwhelming as you approach this “tenant-proof” apartment complex.

You can see some wind turbines on top of the three story building, but it basically looks like a nicer version of the other buildings on the block. However, this complex has gained fame because the owner has figured out how to use the building to generate another source of income that exceeds gross scheduled rents.

The back side of the building reveals a surprising story. From the back, you can see what looks to be a large black blanket covering the entire building with cut outs for the windows.

Lori Mills is the owner and creator of this now “mixed-use” building. She is a middle-aged lady; notorious for wearing denim jeans and white button ups shirts. Mills has successfully integrated a moderately profitable algae farm with her multifamily rental. She uses the building to hang the pads that capture carbon dioxide to grow the algae.

Growing algae that absorbs greenhouse gases has become a popular way to mitigate climate change. The growing market for trading carbon credits has spurred many entrepreneurs into action. And Mills is the success story.

According to Mills, the Supportive Corporation takes credit for her algae’s ability to reduce greenhouse gases as a way to lessen their permit fees. Supportive’s $25,000 yearly contribution to the plant is enough to cover Mills’ mortgage and expenses, but less than the $100,000 Supportive Corporation would otherwise pay if they accounted for all of their emissions. It’s a true win-win for both Mills and Supportive.

Additionally, Mills says she makes between $1,400 and $1,600 every other month selling algae charcoal to a hydrogen gas manufacturing company.

All together, her full automated algae plant earns enough to cover her apartment’s mortgage and expenses without tenant rents. Making it tenant-proof.

Inspired Beginnings

Mills didn’t plan on becoming an environmental entrepreneur. She began just like most lords, eking out a small profit before taxes. But things changed once she embraced the notion of earning more by helping more.

“I started off thinking really big. Why not try to help the entire planet?” Mills said with a smile. That’s when she started researching the latest technologies for fighting climate change.

Mills eventually discovered the Requiron, a machine that uses nanotechnology to convert algae into carbon powder, and found some grants and financing for the plant’s construction. “I could hardly sleep once I realized I could actually use my building’s exterior to hang the absorption pads,” she said.

So What About Tenants?

Although Mills can get by without tenant income, she still wants it. Tenant rents (less repairs) are sheer profit.

She laughs when asked about what her tenants think of the algae plant. “They hardly notice, but I did have to dedicate one of the six units to store the plant controller.”

Mills jokes that now instead of relying on tenants to pay the mortgage, she relies on them to provide security for her equipment.

“In all seriousness,” she says, “the algae plant has freed up funds to make my complex look better than otherwise possible. I can now afford a specialty gardener to maintain an elaborate landscape plan.” Being tenant-proof actually helps attract better tenants.

What Next?

“There is still much more that can be done” says Mills. “I’m still trying to improve greenhouse gas capture rates and the quality of the carbon we produce. There’s no reason the plant couldn’t be more profitable.” She also thinks the tenant-proof concept should be incorporated into the affordable housing industry to make for a “triple win.”

Note: Although this is a fictional story, the concept is feasible. We will, one day, be able to use our rentals to create a significant auxiliary income stream.

Tell us your story of how it will happen.

Photo: Rufus Gefangenen