Investor · Madison, WI · Member since 2012 · 242 posts · 61 votes
Does anyone as a landlord do anything they have thought is cool and has worked out well?
For example, I had refrigerator magnets made for our property management company with the phone number to call for issues. Almost every tenant has them on their fridge when we go into rentals to do repairs, so I feel it's worked out well so they always know where the phone number is.
Has anyone else done anything like this? I have to imagine there are more great small ideas to make things easier in general for both tenants and landlords.
Real Estate Investor · atlanta, GA · Member since 2013 · 456 posts · 237 votes
12y
Great idea - we do higher end hardware, faucets and ceiling fans with remote controls for our shared housing rentals. Keeps the tenants happy and they feel more at home...which means higher rents and less turn over for us. We often get as much per room as other landlords get for the whole house and our net rents on most homes is 3 times higher than a traditional rental. Our whole model is unique.
Bedford, NH · Member since 2012 · 2k+ posts · 1k+ votes
12y
I haven't been doing this long, but I have yet to raise anyone's rent.
As Rick says, vacancy cost is part of the reason. But the other part is cosmetic refreshes.
I have done all new systems, so there really is no "repair" if we take that to mean something that is going to continue to degrade and get more expensive if not addressed. What I will have are cosmetic needs.
I have a house with laminate counters that are getting pretty worn. If the current tenants move, I will need to replace the counters. But it doesn't cost anymore to replace badly worn counters than moderately worn counters. So avoiding the need to do that, plus avoiding a vacancy lost month, is worth forgoing a rent increase.
The other thing I do is have a fire safety company come every six months to test the detectors and change out the extinguishers. That may be common place in commercial or multifamily, but I haven't met any other SFR landlords doing it.
Investor · Amarillo, TX · Member since 2013 · 139 posts · 51 votes
12y
I just made a new forum post about something I am going to try that I know not everyone does... thats include details about showings/open houses for a 2 hour window on weekends during the 30 day notice period. For this "favor" will come an $$ incentive for helping find a tenant. If we get a tenant that moves in within 3 days of move-out, I will reward them with $150. If its someone they refer to me, Ill add on another $50.
Something else I do is paint all trim a glossy oil based extra-white, and the walls a nice warm gray beige. I use the same colors in all houses (many do this), but whats different for me is that I do this even in working class neighborhoods. Some people around me just paint everything white, paint the baseboard the same as the walls, leave them stained and beat up, or skip adding fresh paint here. Its a little more work on painting, but it adds to a nice pop. Ive had tenants walk into a house that I know my wife would refuse to live in and say, "Wow, its beautiful." That allows us to get a tenant thats in a class a little bit above the typical for the area and it doesn't add much to my costs. In a preventaive way, I paint beyond the expected range for the neighborhood as a method of "tenant proofing." One way to tenant proof is hardening... another is finding out how to get a great tenant. It takes a little more labor on the front end remodel, but its not that difficult to maintain.
Another thing I do is try to keep a warm relationship with my tenants without being their friend. I wanted to be liked, but not liked so much that they loose respect. I want them to know that I am a real person that wont jerk them around (trust), but that they obey rules because there are consequences (respect). By knowing them just a little, it provides for more manageable relationship and personally I feel like they are less likely to try to screw me over. With more and more of the millennial generation joining the tenant pool, I have found they they want to have a relationship with people. They are tribal. Meaning, they have no problem sticking it to "the man" or the "big bad company," but they don't want to take advantage of someone they know. Also, these things might encourage them to stay instead of moving.
As a millennial generation member, I think I have an advantage into how they think. I try to adjust my strategy to fit if thats my tenant. By only having two properties, I have an easier time doing this. I do this by asking about their lives when we end up on the phone, sending a baby gift when they are expecting, sending Christmas card, finding ways to make minor upgrades to the property (new ceiling fan, paint touched up, ect) if they resign their lease, or simply doing something more than I said. One I do the most is with respect to pest-control. The lease says they are responsible, but if I have a good tenant, I come out and do it a couple times a year when I do my own house or if I am making a small repair. I make sure they know its "because they consistently paying on time and keeping the house in top condition."
@Dawn Anastasi Correct, even a ten year tenant enjoys no rent increase.
It works about better, I think to only increase rent when there's turnover. Here are some assumptions.
$25 increase every year:
$1000/mo
10% vacancy
You collect ~$120k of rent over 10 yrs adjusted for 10% vacancy
VS
$100 increase in yr 4 and yr 9
5% vacancy
You collect $123k of rent over 10 yrs adjusted by 5% vacancy
I think a $25 increase every year is way too excessive. Something like $10-$20 every 2-3 years is more in line. This way you're not lagging too much behind market rent but you're not slamming the tenant with rent increases all the time.
Rental Property Investor · Fredericton, New Brunswick · Member since 2013 · 7k+ posts · 4k+ votes
12y
Just a short list of things we do which differentiate us in our market:
Utilities Budget - provides tenants with single payee {us} for rent and utilities, but keeps them accountable for their utilities consumption;
Energy efficient & healthy homes - especially amongst our student rentals, we are developing a reputation for units in which the utilities are far less than the competition.
"House sitter" - {not yet universally available} - Tenants can monitor their home from their smartphone.
Internet (FibreOp) - we require internet access for our building monitoring system, so we make basic Internet (30Mb/10Mb) available to our tenants
"Take me Home" - {for our student tenants} - provides the tenant with a cab card for one of the local taxi providers. They can use this card to ensure they can get home if out on the town.
"House keeping" - optional add on service available to our tenants at a reduced rate.
"Discounted fitness membership" - {for our non-student tenants (students have access to the services on campus for free)} We've partnered with a local pilates/yoga studio and gymnasium to provide our tenants with a free trial package and discount on a subsequent membership.
We are also working on new arrangements with a startup car-share; for electronic parking passes; discounts at neighbourhood restaurants; and a reduced rental rate on self-storage during the summer months for our student tenants.
As @John K alluded with his fridge magnets, we provide all tenants with the following on move-in:
a binder containing information on their home: the house rules, manuals for appliances, call lists for service providers, transit schedule, maps showing local amenities, coupons to local businesses;
a cleaning caddy with a started supply of cleaning products, a toilet brush in each washroom, and a toilet plunger;
an emergency call list velcro'd on the inside of a kitchen cupboard door.
I think a $25 increase every year is way too excessive. Something like $10-$20 every 2-3 years is more in line. This way you're not lagging too much behind market rent but you're not slamming the tenant with rent increases all the time.
Everyone has their own formula.
$25/yr on a $1,000 rental is only 2.5%, which isn't out of line with cost of living increases.
That being said I too generally do not raise rent on my tenants, especially not the ones that I want to keep. I've managed to keep my vacancy loss around 3.5% in areas where 10% is pretty standard by keeping my rents reasonable and even more importantly having my maintaince guy stay on top of service calls.
Developer · Decatur, GA · Member since 2011 · 1k+ posts · 1k+ votes
12y
@Dawn Anastasi I view it as a reward/incentive. In order to keep rent the same, you have to pay rent on time, every time. Otherwise, rent can float. It's in the tenant's control.
Like @Patrick L. , only the good ones enjoy no increase.
Real Estate Investor · StL, MO · Member since 2008 · 294 posts · 152 votes
12y
I have 3 daughters so every year, for those tenants that have been with me for at least a year, I give them a case of Girl Scout Cookies. The tenants absolutely LOVE getting them and it helps me as I would have ended up buying those boxes anyway so my daughters can get the stuffed animal or another prize. But now they are a business expense that I can write off.
I have 3 daughters so every year, for those tenants that have been with me for at least a year, I give them a case of Girl Scout Cookies. The tenants absolutely LOVE getting them and it helps me as I would have ended up buying those boxes anyway so my daughters can get the stuffed animal or another prize. But now they are a business expense that I can write off.
Hahah, love it. Can you believe that where I live those thin mints are $5 now? And I swear to God they made the box (read:cookies) smaller too!
Investor · Asheboro, NC · Member since 2014 · 14 posts · 9 votes
12y
I provide all kitchen appliances and a washer & dryer. So many place have only the W&D hookup; I like to think it makes me more competitive by offering the total package
I provide all kitchen appliances and a washer & dryer. So many place have only the W&D hookup; I like to think it makes me more competitive by offering the total package
That re-emphasizes that real estate is very local. In our market "all kitchen appliances and a washer & dryer" is part of admission.
Investor · Denver, CO · Member since 2014 · 84 posts · 52 votes
12y
I'm with @Rick Baggenstoss and @Patrick L. about not raising my rents. I will even tell my tenants up front that is what I do. I never sign longer than a 1 year lease document (just in case things don't work out but we aren't legally breaking anything or not quite in the eviction land wholly yet). However, if we like each other and want to remain I won't change rents on them. The margins are good and my turnover has been nearly 0--even the few people who have eventually moved to get their own place or changed jobs have helped immensely with filling their vacancies or doing me a favor such as moving out 8-10 days early but handing me over a show-ready rental. If I can make the rents I'm making now for the entire life of the loan, I will be happy. If they move out I re-rent and adjust pricing with market. I may be slightly losing out on someone who is there for 5 years and in years 3, 4, and 5 are getting a nice unit for a tiny bit below market but let's not forget (just like you can do in options trading) that if rents were to drop and they want to stay I'm also protecting my downside while those with higher turnover will have to adjust to lower rents (rare--but possible).
Once I've picked someone I basically am upfront with them about what I expect and what I will deliver. If they keep the wear and tear to a minimum, I will gladly (and preferably) hand over the whole deposit. I'm not here to play games or nickel and dime them. I've found that besides offering well-maintained, nicely appointed, and attentive (but not overbearing) management just being up front with them and keeping it a friendly but strictly business relationship has been the foundation to my most successful tenant/landlord relationships. I'm not there to micromanage and babysit adults, and they're wanting to live somewhere that is clean, nice, and feels like an actual home.
Why would you never raise rents (ex: if a tenant stays for 12-15 years) when you can simply just raise it a little every year or every 2 years and accomplish the same thing..?
$25/yr on a $1,000 rental is only 2.5%, which isn't out of line with cost of living increases.
Yes, it's not a large percentage increase, but think of it this way -- $25/month is a nice dinner out for a couple, or a few bags of groceries. My rentals are typically in the $700-$900 range and I don't want to impose that much each year on a tenant.
I would prefer to do the mid-way point between Rick's method (never raising rent) and raising rent every year. Try to keep up with market rent but also not overburden the tenant.
For my last increase, the tenant was paying $850 and has been with us for over 2 years (MTM). I'm going up to $870 and when I discussed it with her, I brought a bunch of print-outs showing market rents for the house she's in to be around $875-$900 in some cases. If the tenant knows by looking at other ads that other similar properties are more than what she's paying, they understand the increase and don't have an incentive to move.
Developer · Decatur, GA · Member since 2011 · 1k+ posts · 1k+ votes
12y
@Michael G. I have some expertise in Performance Management -- driving, recognizing, rewarding, and measuring people's performance. Monetary rewards and recognition have a big impact on some people's behavior.
I want zero turnover for perfect tenants. I don't raise rent to reward good behavior, to reduce my costs, and to improve my rent revenue. It would be a dream to have a tenant turnover every 10 years or more, then I raise rent.
I believe raising the rent on a tenant is about much more than money. A tenant may view it as opportunistic ... a bait and switch. Now that you and your stuff are here in my house, I'm going to drive up the price every year. Who knows by how much?
What does a rent increase tell the tenant about how they've done over the year? The amount of the increase is somewhat moot. It sends a message which can be misinterpreted.
A minor rent bump could be the thing that triggers them to look around. The tenant may think, "is rent still fair at this new level?" and find out that the new apartment building offers first month free and lure them away. Not raising the rent reduces the likelihood they'll look around and therefore move.
I enjoy having lower turnover and lower turnover costs and very high quality tenants. It makes business sense to me.
You should model out 10 years, play with your assumptions for rent increases at 1, 3 or 5 years out. Play with the assumption for vacancy and turnover costs. I think you'll find you make more money if you can keep the tenant longer.
PM me and I'll send you the spreadsheet I used to model this scenario.
Real Estate Investor · Sebastian, FL · Member since 2014 · 812 posts · 432 votes
12y
A small thing I learned doing rehabs. Don't use the typical flat wall paint. Two or three showings and suddenly your nice newly painted walls look like crap. Use a low lustre paint.
We typically raise rent between tenants. However, on a couple of occasions, we have raised rent on a good tenant when we have made a substantial improvement to the property. In those instances, we discuss our plans the the rent increase with the tenant before beginning any work.