My wife and some investors and I have built a profitable little side hustle buying and holding MF rentals. I self manage so I'm at the properties fairly often and get to know our tenants. From the beginning, my protocol has been to maintain absolute professionalism and follow the line of "Always friendly, never friends" with tenants. Our business model requires me to raise rent whenever possible and evict whenever necessary. We're in it for money. However, in the back of my mind I often wonder if there are ways we might be helping our buildings residents, many of whom are good people who are struggling despite making the best choices out of the options available to them. I have been in their shoes and understand how a small leg up can make a huge difference. What are some ways that all of you have found to improve your tenants lives without compromising profitability?
1. Solar panel
2. Water filter system
3. Monthly cleaning lady
4. Provide cable and Wifi
Basically, any upgrade towards the house will make their life better living inside.
Thanks for the reply Wayne, and great ideas. I love that the first item of the first reply to this thread was "Solar panel" because ironically I sell solar panels as my day job. I'm definitely hoping to put solar on all of our buildings eventually. Our area has a patchwork of rebates, incentives, and interconnection fees/net metering agreements. So unfortunately not all of our properties pencil out well for solar even with me getting equipment at wholesale cost and free labor. It would be great if the federal investment tax credit applied to investment property, but unfortunately it's just for primary residences or up to one vacation home, maybe that will change in the future. If there was an incentive to put solar on rental properties the solar industry would explode overnight. I get calls all the time from investors who want to put solar on all their properties but depending on where they and what the roof situation is the numbers don't always make sense to power the whole building. Even just powering the common area with a small system can make tenants happier however, and it makes the building feel more modern even if it's an old building. I also really like your idea for providing Wifi. That is definitely something I'll look into. Having high speed internet available will definitely improve tenants lives and attract better tenants. Your last comment about overall upgrades is also a great point. I've noticed that when I make upgrades the tenants also tend to take better care of the property, and everybody benefits. Other ideas I've had are perhaps less conventional, such as offering English language classes, providing info for tenants to access free counseling if they have marital/drug/mental health issues, and even hiring tenants to make repairs if they are qualified to do the work and trustworthy individuals. I'm interested in hearing from more landlords with additional ideas!
Just posting because I'm sure some of the replies will amuse me greatly...... carry on.......
When we have a tenant that we really like and want to do a something extra we like to upgrade something in the house. That way they get to enjoy it and get a little nicer rental. An easy one that is handy and has been a big hit are the front door locks with the number pad so you don't have to have a key. Also then we can change to code after tenant leaves and we don't have to have a bunch of keys:) That is really nice of you to understand that most are really good people.
@Steve K. When the wifi goes down, as it often does, who are they going to call?
Also, I really appreciate your thoughts about the solar industry.
Hi Lee L., Several of our buildings are in a town (Longmont, CO) that recently developed municipal Wifi which is actually provided by the town cheaper than commercial services. It's also the fastest Wifi in the country. So for these properties it seems like a no brainer to provide Wifi to the whole building from the town. I'm looking into setting it up now and I don't see any downside. It's hard wired in with fiber so I think the service will be very reliable, and if/when the tenants have connectivity issues they can call the town who provides the service along with electricity, water, sewer, and trash. Pretty ideal scenario. I plan to include the very minimal fees in with our utility fees for the common area and even thought the tenants will be paying for it they'll still be benefitting because it's much cheaper than any other Wifi options. Not every location will have the same scenario but I imagine moving forward more and more cities will be developing muni Wifi. For other scenarios I expect there are still efficiencies of scale to be gained by supplying Wifi to a whole building, but there is also potential for increased headaches if you had to manage it.
My suggestion would be take a hard look at the units first. Do they have in unit laundry, dishwashers, central a/c, and garbage disposals? Start there with some basic amenities that add value to your property and help attract and retain good tenants plus add to qol.
Next I'd look at additional property upgrades. Are the water heaters actually big enough for the unit to accommodate hot showers in the morning for all in residence and appliance utilization? Perhaps upgrade to tankless water heaters. Do the units have private outdoor space? If not, do you offer communal space? If not, is there a way to add this by making some improvements to the yard or adding a roof deck? Possibly add a built in grill for communal use. What about storage? Is there an unused space (perhaps a basement) to add storage lockers and/or indoor bike storage?
I think your intentions are admiral with a huge BUT. First, you never know how another will perceive your offer of kindness. They might think their English is great and be offended that you think they need to take classes, etc. Not a path I would go down. Also, I would not use a tenant for work on the property. If you don't feel they completed the work to your standards, how does that affect the relationship going forward? You could be stuck with shoddy work and an angry tenant. Not worth the risk.
Stick with capital improvements. As a landlord, providing a safe, comfortable space and fostering a relationship of mutual respect is a way to enhance quality of life. Let your tenants seek self improvement elsewhere.
I've provided $25-$50 AMC movie gift cards to tenants in the past as a thank you for being a great long term tenant. It's a small gesture but can set you apart and sends a message that you care.
I treat everyone I deal with integrity and act ethically. If I say I'm going to do something, I do it. If I shake your hand on a deal that means way more to me than a signature on a page does to others. I try to keep my units slightly above the standard of the competition at the same price. If a tenant has a problem I try to fix it as quickly as possible... but let's be honest. That's just business.
Even though some of those decisions often have the result of improving the tenants lives, those are just business decisions and have nothing to do with a desire to improve anyones lives other than my own. Those are all things that I believe will make my business more profitable. Keeping tenants happy means keeping quality tenants that treat the property well. That all allows me to spend less time on them, have less headaches/stress, and be more profitable (improving MY life)
My business is my business. My charitable contributions to improve lives are my charitable contributions.
@Steve K. I fix problems immediately and stay out of their business. Tenants do not want landlords in their life unless there is a problem. The only other advice I have is to stay on top of CAPEX and common area upkeep. Paint the property, new roof when it is time, spray for weeds and plant trees. These are all things you should be doing for your own benefit anyways, but some landlords skip them to keep profits up.
Good ideas coming in here. We've stuck with capital improvements so far and have made tenants happy while increasing the value of our properties. I've even remodeled units fully in order to justify raising the rent, while tenants were living there. It takes a special relationship with the tenant to pull that off. Sometimes I just wish there were more I could do. Bike racks, solar, wifi, Christmas gifts and rewards to good tenants for paying rent on time are all great suggestions. I also appreciate the comments about staying out of tenants lives unless there's a problem, fixing things promptly, and keeping the relationship strictly business. Our main goal is building PASSIVE income after all. Our plan is to achieve that by transitioning to a PM when we have enough units to get a good rate and enough cash flow to justify the fees, but I'm also interested in maintaining a healthy conscience personally in the meantime. The human element of investing in MF rentals is real and can't be ignored, for me at least.
@Sandra B. I mentioned English classes only because of an El Salvadoran family we have in one of our units who have been here for years but haven't had the opportunity to learn ANY English because they work all the time and they work with only fellow Spanish speakers. They told me (in Spanish) that they would like an opportunity to learn English but they don't have access to classes, since they work 100 hour work weeks just to pay the bills and don't have time or money for anything else. I'm not sure how to solve that problem for them but it crossed my mind. I only have basic Spanish so it's hard to communicate with them beyond a basic level "theres a leak in unit A so we're shutting water down to the whole building so we can fix it," etc. however thank you for pointing out that some people may be offended if a landlord were to recommend English classes, that's a valid point. In the scenario I'm dealing with they want to learn English badly but don't know how so it's a different situation.