Back in March of this year I wrote an article entitled, Riches In Niches: A Guide To Greater Rental Property Cashflow. The focus of this article was to encourage you as a landlord to explore specific market and tenant niches as ways to maximize the positive cashflow on your rentals. The key for many landlords, is to explore which “niches” are available within your market and then provide quality rentals to those niches.
Since that article, a real life opportunity has developed within the Baltimore market that I would like to share. The primary reason for this follow-up article is to make sure you are thinking about what is possible in your market.
Double or Triple Net
Consider this: How would your life change as a property owner if you could rent your properties to a single organization with multi-year leases (with rent escalation clauses), zero vacancies, zero tenant management issues, no maintenance issues to deal with and a monthly payment that meant at least $350 net positive cashflow. In essence, a commercial lease that is double net, and almost triple net in nature.
Would this get your attention? I bet it already has!
For many landlords, their entire business plan regarding tenants is usually the path of least resistance. The first qualified tenant who shows up gets to move in. Sound familiar?
While this approach works, the key question is:
Are you maximizing your rental income, while minimizing your expenses?
Here is the “niche” that could maximize your monthly cashflow.
The organization entering into the lease agreements, as the tenant, is a non-profit that provides supportive housing in the form of individual rooms rented out on a weekly basis. The great thing about this program is that the non-profit does everything. Tenant (actually their clients) selection and management, rent collection, maintenance and everything else required of a landlord. They do all the work — you just supply the property and collect a monthly check. How cool is that?
The niche that the non-profit is supporting consists of individuals who most likely could not afford to rent an entire apartment but can afford a single room, individuals with some sort of health/emotional issues or those who do not qualify for other Government housing programs. The key for the non-profit is that all of their clients either work in some capacity or receive some non-housing related assistance. The non-profit does not depend on the generosity of other agencies or organizations for their rental income – a huge plus in today’s challenged budget environment.
I am fully aware that not every market can support this type of arrangement, but I am positive that if you get out of your “comfort zone” and look hard enough, there are other opportunities very similar to this one just waiting to be discovered.
What are you doing right now – today… to maximize the cashflow generated from your rentals?