All Forum Posts by: Michael Gansberg

Looks like my link didn't go through for the $11 showerhead, sorry everyone. It's the Niagara Sava Spa Chrome version(1.75 gpm,) easy to find on Amazon. If the link vanishes in my second post(really, BP?) that can be found using the below text in Amazon's search engine:

LE 18 Pack A19 E26 LED Bulbs, 60W Incandescent Bulb Equivalent, 9W, 2700K Warm White, Non-Dimmable, 810lm, 240° Flood Beam, Medium Screw, LED Light Bulb

Very interesting, @Anthony Chara - I might test that out on one of my buildings. I'd still recommend the low-flow water retrofits to help the tenants save dough(the less they spend on water, the more easily they can pay rent, and the better for the environment.)

@Account Closed - happy to help! I hope you find the information useful. I'd say the most used common hallway lighting solution is a 60 watt incandescent(or the swirly fluorescents.) If you're using the 60 watt incandescent, I'd try the 9 watt LED replacement from LE(Lighting Ever) linked here. The newer Cree bulbs also work quite well(though are a good deal pricier.) The LE bulbs are less than $2 each, and they last 50,000 hours- so if you put it in a common area where the bulb is always on, that's about six years. In an always-on fixture with the average cost of electricity in the US(12 cents/kilowatt-hour,) each installed bulb will save the user a little over $50 per bulb, per year, as compared to the incandescent equivalent. Now that's free money. If you have another kind of bulb you commonly use(T-8, halogen MR16, etc,) please let me know, I probably can recommend a replacement LED.  And if you're using the swirly fluorescent bulb, you'll only save a little on energy costs- may as well wait until those burn out to replace with LED, though I swap anyway because the swirly bulbs contain a poisonous gas(yes, dear reader, you read that right. A poisonous gas encased in glass. What could possibly go wrong?)

It's possible, but seldom worth it(in my experience.) Some people suggest RUBS(ratio utility billing system,) I'm not a fan. Think about it- if the tenants have to pay another $800/year in water bills, they're going to demand to pay less rent- maybe not $800 less, but less. Let's say...$700 less. So you spend a ton of dough and time, and save $100.

The alternative I've gone with(sorry everybody, I post this all the time, I know. It's because I'm an environmentalist, OK?) is to replace the faucets with anything that has a Watersense label- those generally save about 30% over a conventional faucet- or use aerators, which for about 3$ each at the hardware store can accomplish the same thing. For toilets, I'd been using the 1.28 gpf type, but a fantastic .8 gallon per flush toilet is now on the market, it's called the Niagara Stealth, and it should be purchased at Home Depot(otherwise you're gonna pay like $50 or more to ship it somewhere.) For $150, you can cut the water use by 50% from a conventional toilet. Lastly, I'd recommend a 1.75 gallon/min showerhead which cuts usage by about 17% over the conventional showerhead(I don't suggest going lower than 1.75 gpm, that'll just piss your residents off.) Here's one that cost $11, but any of the ones with plenty of good reviews should be fine.

If you make all those simple changes, your water bill should drop by somewhere around 30%, possibly more. So if the bill is $800, you're saving $240 or more annually, and the materials listed above are somewhere around $200 or so. Beat that, RUBS! As an added benefit, your residents will save on their hot water bills which means you can command slightly more rent- or your tenants will be slightly less likely to leave due to the lower utility bills. If anyone wants advice on LED lighting for your common areas, reply to this post- that is an even bigger $$ winner than low-flow water fixtures.

@Engelo Rumora- great talk last night. It was incredibly helpful to hear from you. I've been investing for almost 14 years, and paradoxically, I've been struggling with being in my comfort zone and being very unhappy about it. My greatest gains have come when I've pushed myself, and being comfortable has been a red flag for me lately. So thank you very much for the swift kick in the ***, I needed it.

Mike

@Sebastian Taylor good point. Heat pumps are a viable alternative, but their cost-effectiveness depends on latitude and severity of winters. I have no experience with them. Also- I think the OP was asking about heating the apartment, not the water. I haven't put much thought into electric vs. gas water heat, which is strange since I analyze everything else to death. 

@Ed Riemer - very glad you're asking this question. People will debate efficiency on your question, but bottom line- if you're in Maryland, you need to heat with gas. It will be cheaper for the residents as compared to some idiotic solution like electric baseboard, and cheaper by a good deal. I've heard the old argument, "You're not paying for it, so why do you care?" Will you care when prospects see that you've installed the most expensive heating solution, and decide that they'd rather rent a place with affordable utilities? Because that's what's gonna happen. I've seen it over and over.

Or what if you get an unsophisticated tenant(by the way- do you really want one of those?) who doesn't know the difference between electric baseboard and gas heat, but calls you monthly during the winter complaining about the high utility bills, and breaks the lease early? Or doesn't renew? Either of those will raise your costs of ownership.

Or how about when you sell your building to a sophisticated investor? Trust me, they'll roll their eyes when they see electric baseboard heat, and they'll say, "You know how much this is going to cost to convert to gas heat?"  It will effect your selling price, and not in the way that you'd like.

Yes, it's cheaper to install electric baseboard heat. But you'll pay later, one way and another, and another.

@Robin Grimes - I'm so glad you posted this. I don't know that I'll ever have time to read the whole thread, but your original post is priceless. I have about a hundred of these, I'll keep it to two or three and stay true to your timeless format.

#1: Prospective resident calls for a very affordable 1 bedroom apartment some years ago- priced around $500/month. Prospect says, "I love the apartment, but I can only afford $400 per month."

I'm thinking: If you can only afford $400 per month, why are you calling about an apartment that's listed for $500 per month?

I'm saying: "If you can only afford $400 per month, why are you calling about an apartment that's listed for $500 per month? Thank you for your call and good luck finding an apartment that is affordable for you."

#2: Prospective resident calls about a pretty affordable three bedroom in Buffalo with some off-street parking(two shared spaces for three residents.) Prospect says, "I know it's listed for $650/month+, I'd take it if you could make it $500/month and give me a dedicated off street parking spot."

I'm thinking: Lady, are you nuts?

I'm saying: "How about I cut the rent in half for you, build an international airport for your private use adjacent to the property, and give you a devoted parking space?" She then hung up, I'm not sure why, I thought my offer was quite generous.

#3: Prospective resident calls about a nice two bedroom located in a rural area. Prospect says, "I just got out of rehab for alcoholism and driving drunk. I don't have a car or a job yet, but I'll be getting a car and job soon, hopefully. Can I see the apartment? Are there any bus lines nearby?"

I'm thinking: This guy sound like a great prospect!  

I'm saying: Click.

@Art Maydan, could you post a picture of the bulbs you're currently using, or post a link? Anything which has the wattage and model number should suffice. Very often, LED bulbs can be used as direct replacements for existing halogen/incandescent/fluorescent etc. And it's usually way cheaper than buying a kit or paying a pro. After seeing what you're using, I may be able to offer a recommendation.

Hi @Will Bert - is your rental in NYC? If it was warm enough during the days when your boiler was out, you may not have been required to provide heat(thus no discount necessary.) I believe in NYC no heat is required during the day if it's above 55 degrees, and none at night if it's above 45 degrees(please check that before going with it.)

If it was legally required(or if your boiler provides hot water too,) then I'd give her a 50% discount for the three days. So if her rent is $100/day, chop ($50)X(3) or so. 

@David Zheng, great work. You remind me of a turbocharged(hypercharged?) younger version of myself. Some advice from an older guy(42) to a younger lad. You're burning the candle at both ends, and even from the middle, I think. At 25, you may be able to do that for awhile before it kills you. At 30 or 35? Not so much. Plan for those future years. If you want to optimize earnings from both RE and your day job, until you're ready to give one of those up, you'd be very well served by hiring competent management. 

I hear your points- competent management is hard to find. Find it anyway. You're cheap- well, how does being able to spend more energy on your day job(which will come with better pay raises) and being able to acquire more units and run them more profitably sound to you? Even though you haven't found the right person/company yet, they are there, in your market, and they're better at managing real estate than you are. So even though you're paying them x%, they will help your profitably and ability to grow. As for scalability? You don't have it yet. With the right management, you could have a thousand units or more. Under your current system, to have a thousand units, you'd have to work 70 hours per day.

Sorry to be such a downer! What you've done is very impressive, keep up the good work.