Multi-Family Units: Some thoughts about Philip Winburn's comments.
Philip was very thorough and very detailed in his reply when responding to a request for information about certain properties in his area. In his blog on ActiveRain.com, he researched and documented what he wanted to say. He started me thinking about what policies I follow with my more difficult rental properties.
Every time I hear "civilians" at parties talk about how much money they will be making on their multi-units that they plan to paint, fill with tenants and sell, I walk away.
If those people wanted any facts about their assumptions, they would have done Philip's type of analysis. Then they would realize the folly of their ways and never make those comments at a party.
IMHO - The only way to rent the difficult properties is to get HUGE deposits from each tenant - and often the renters at lower levels don't have the resources. The same holds true if you are trying to lease an obsolete home in a good neighborhood. "Obsolete" here means not the latest style but neat and clean and ready to live in and enjoy.
Since 1974, I have managed rentals - both condos and houses. I just rented a four bedroom home, totally outdated and equally totally clean with all appliances, to four unrelated recent college graduates. They were happy to get a nice place because no one wanted to rent to them - fears of damage and irresponsibility from young folks.
They needed time to make three payments but they EACH put down $1000.00 as a personal deposit.
One said, "But you will have a $4000. deposit and the rent is only $2000." and I replied, "No, I will have FOUR $1000. deposits - each of your individual money."
My theory is that the amount of deposit must be high enough to be painful to lose. If all four chipped in for $1000. - well, at only $250 each - too easy to walk away.
The other technique that I use comes from the John Adams class, "Landlord Survival". He suggests offers of discounts on the rental amount for certain options. One is to offer a discount for electronic rent payments DIRECTLY into the escrow account. Payments must be received before the end of the month so that the rent is in the account by the 1st.
No one has turned down that money saving option so far. Needless to say - that auto-deposit system saves me from lots of aggravation! No rents to collect!
DO YOU HAVE ANY SUGGESTIONS FOR SPECIAL RENTAL TECHNIQUES? Looking forward to learning from Y O U -
my fellow community members in the RAIN !!!
Have a happy day -
Lynn
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