Success as a Landlord- Leadership: Owners of Residential Rental Properties Must Be Assertive

Investors in apartment buildings, single-family homes, duplexes, and other residential properties are landlords. The aim of most landlords is simple: to have tenants who will treat their units like homes they cherish, pay their rent on time, and not be a nuisance to others. That simple goal eludes many novice landlords because they fail to establish their authority over their properties.

Selecting Tenants: Avoid Cash-Flow Erosion, Landlord Burnout

The proper selection of tenants is one of the most important responsibilities of a landlord. To carry out this duty, a landlord must have clear selection criteria and a legal and effective screening process. Shortcuts in this process can result in future problems and misunderstandings with the tenant. This may include expensive and time-consuming court proceedings, which in turn can erode cash flow and contribute to landlord burnout.

Informing Tenants: Strong Lease, Clear Rules

Landlords should use well-drafted leases and rules (the rules may separate or included in the lease) that put the tenants on notice of the course of conduct that is expected of them. For example, the lease should state when the rent is due and how it is to be paid. The rules may specify that the use of illegal narcotics on the premises by anyone or that loud music or noises after a specific hour can lead to eviction procedures.

Notifying Tenants: Following Landlord/Tenant Laws

Landlord/tenant statutes in the United States are written with the view that landlords enjoy a stronger bargaining position than their tenants and, therefore, that leases favor the landlord over the tenants. To level the playing field, the laws of each state specify, among other things, the types and timing of written notices that landlords must give their tenants about lease infractions and eviction proceedings. Landlords who fail to follow these specifications needlessly surrender their legal standing and risk seeing their cases thrown out of court.

In many states, after buying a rental property, a landlord is obliged to advise existing tenants in writing that the ownership has changed. This type of letter also should inform the tenants how to contact the landlord (or property manager), where to send or make the monthly rental payment, where the security deposits are being held, and how to request repairs.

Sometimes, a tenant may test a new owner by not paying rent, paying it late, or making unreasonable demands for upgrades. Perhaps the previous owner had been too timid to confront the tenant about such conduct. To avoid becoming the tenant’s “doormat,” the new landlord must swiftly and unequivocally show that he or she does not tolerate unreasonable demands and the lease being breached.

By applying the lease terms and rules to all of the tenants and by using a system of written notices, landlords demonstrate that they are in control and that no one receives special treatment. This is an effective business practice because it encourages good tenants to stay and bad ones to move.

Landlords Lead by Managing Tenants

Smart investors manage their investments; they do not allow investments to manage them. This is equally true for investors who are landlords: smart landlords do not allow their tenants to dictate how to run their properties.

Demonstrating control of a rental property does not mean being authoritarian, offensive, or uncompromising. It does mean acting like a leader, setting the tone of a tenancy, and enforcing lease terms and property rules in a consistent, even-handed manner.

Begin With Single-Family or Multi-Unit Rentals? Investors Must Weigh Pros, Cons of Various Residential Properties

Owning fully-rented, residential rental properties is a surefire way to receive income every month. Not only do these properties generate cash flow, they also offer a good return on equity, both as the mortgage debt used to finance the properties goes down with each monthly payment and the value of the properties rises over time.

Nonetheless, an inexperienced real estate investor must carefully consider what type of rental property to buy. There are many types from which to choose:

  • single-family homes
  • two-family homes (also known as duplexes)
  • three-family homes (triplexes)
  • four-family homes (fourplexes or quadplexes)
  • large buildings with five or more apartments
  • buildings with one or more apartments and a commercial unit

Single Family Homes as a Start

“It is a great time, right now, to invest in residential real estate,” Rhonda Duffy, broker of Duffy Realty of Atlanta, wrote recently in an e-mail response to questions. She added, “The easiest property to buy, prepare, and flip is by far the single family home, and it should be the choice of the novice investor.”

In fact, many investors start off with a single-family house as a way to get their feet wet as landlords. Not only do these investors learn what it takes to maintain and even improve the physical features of the property, they start to understand how to select tenants, what to cover in a lease, how to set the parameters of the landlord/tenant relationship (for example, how each of them will handle emergency repairs, how late to accept non-emergency calls), and how to keep good tenants and oust bad ones. A variation on buying a single-family home as an investment is buying a duplex to live in one unit while renting out the other unit.

From there, investors may go on to buy additional single family houses to gain experience as landlords of more than one rental unit. Alternatively, investors may buy multi-unit properties.

Rental Property Considerations

Here are a few things to consider when deciding how large a rental property to take on:

Per-unit cost. The more units a building has, the lower the price of its individual units. Some investors find it more profitable, manageable, and efficient to own one building of five or more apartments than to own and manage several smaller rental properties.

Building control. In some ways, a landlord loses more and more control the larger a rental property is. In many states, tenant protection laws apply to buildings with three or more apartments and dictate how and when tenants get notices of rent increases and evictions. Local rent-control or rent-stabilization ordinances may limit the amount of annual rental increases, even if the landlord has made extensive repairs or improvements at the property. Tenants in a multi-unit building also may organize a rent strike over perceived failings by the landlord.

Financing programs. Most lenders define their residential-loan category to include properties of one to four units. Even with today’s stricter eligibility requirements, this category presents good opportunities for buyers. For example, there are loan guarantee programs for first-time homebuyers through mortgage lenders and the Federal Housing Authority (FHA) that allow as little as a 3.5 percent down payment as long as the buyer lives in one of the units; most of the closing costs and fees can be included in the loan.

Bright Rental Market

According to a recent e-mail from Alan Brymer, a Utah-based real estate investor and blogger, “It is easy to rent houses now that few people can qualify for a loan.” Brymer noted that the demand for rental units allows investors the choice to sell their rental properties when the real estate market picks up or to hold the properties “for the long haul.”

Midwest Real Estate Analysis of Residential Prices in a Recession

The Midwest real estate markets have been doing exceptionally well, as compared to much of the rest of the country. Homes have foreclosed and properties have been sold at auction, but when one looks at the numbers they can’t deny the Midwest residential real estate markets, namely Wisconsin, Iowa, and Illinois, have done well.

Wisconsin’s Residential Real Estate Wins Big

A recent report published by, states, the percentage of Wisconsin residents who are currently home owners is an astounding 61.46 percent. Renters in Wisconsin reached, 28.34%, leaving just over 10 percent of the Wisconsin homes vacant. The most common type of real estate in Wisconsin, is the single family detached homes, with 65.99 percent of the real estate falling into that category. Apartment complexes, otherwise known as high rise apartments, are the next best bet for the real estate investor in Wisconsin, consuming 14.03 percent of the total real estate owned in Wisconsin.

Wisconsin’s apartment real estate markets are on fire, the high rise apartment properties are a large chunk of Wisconsin’s real estate industry. That becomes more apparent, with the next revelation of Wisconsin’s real estate numbers. The amount of real estate being consumed by small apartment buildings in the state are nearly the same as the high rise apartments. Mobile homes sales in the state also makes an impact on the real estate markets, and the economy of Wisconsin, small as it may be. The amount of real estate being owned by mobile home owners and sellers rests at a small, 4.37 percent.

The median home value in the state averages out to be just under, $186,000. The price paid by most homeowners. Some paid a bit more, about 43.75 percent, paid between $170,000 and $339,000. The majority of the rest of the real estate sold in the state of Wisconsin, 33.83 percent, rests below the median home value range at the $84,000 to $169,000 range.

The average rental rate for a Wisconsin apartment crunches out to be $696.00, per month. After reflecting on these numbers, any agent can see that the largest and most profitable, despite the losses, is the residential home market. Over 30% of the real estate sales comes from privately owned homes, by far the largest chunk of the pie in Wisconsin.

Iowa Real Estate

The state of Iowa has been one of the best real estate markets in the country. Since 1990, the appreciation rate of Iowa real estate has risen 6.37 percent, and in the last 12 months, it has risen 0.82 percent. Residential real estate prices in Iowa fling from the bottom rung, all the way up to the top shelf.

The cost of residential real estate in central Iowa is much heavier than that of the western and northern regions of the state, though, making a median value hard to determine. In Des Moines, residential homes can range from $129,000 all the way up to $168,400, for the average single family home. In the northern cities, such as Dubuque, the housing costs are fairly low, in the range of $35,000 to $79,000.

Iowa’s median income reaches the 60 thousand dollar range, which is needed by Iowans just to maintain the mortgage on a lower priced $70,000, home.

Illinois real Estate

According to that same report, Illinois has been doing a bit better in this respect, than Iowa, but not nearly as strong as Wisconsin. Illinois appreciation rates have climbed over the past 10 years , 6.4 percent, but across the last 12 months, the residential real estate in Illinois has plummeted 2.92 percent, including a loss of 0.16 last quarter. In 2014, the all important median value of a residential piece of real estate, namely a single family home, lists at just below $184,000, making it the 21st in the United States.

The average monthly mortgage in Illinois is $1,455. The median income of Illinois home owners was $61,174, ranking it 14th, but per capita, the state averages a poultry 26,307, making that $1,500 mortgage payment a little harder to fathom.

Most of the Illinois economy is industrial based, that includes farming, soft coal, mining, oil production and refinement. It manufactures everything from iron and steel, and chemicals . If the industry markets of Illinois are crushed by state and national legislations, as many politicians wish to do, the Illinois’ real estate industry will crumble as the legislations grow.

The Overview

After researching and reading all the real estate facts for Iowa, Illinois, and Wisconsin, the only conclusion that can be reached is, the most commonly bought and sold pieces of real estate in the entire Midwest, is residential homes and apartments, specifically large or high rise apartments.

Manage a Vacation Rental Property: Maximize Profits by Managing Your Own VRP

It may seem daunting to manage a vacation rental property from hundreds or even thousands of miles away. It’s tempting simply to turn over the management of the property to a management company. But those companies typically take a large cut (often 35% or more) of any rental money earned by the VRP. Many people rent out their vacation homes as a way to make having a second home affordable; the large cut taken by management properties often changes the math so substantially that it may no longer be financially possible to own that dream vacation property. Luckily, it’s fairly simple to manage a VRP and keep all the profits.

Find a Trusted Cleaner for the Vacation Rental Property

The hardest part of managing your own vacation rental property is finding a cleaner who will not only do basic cleanin, but who will also do the chores that are critical to the success of a vacation rental property. You’ll need a cleaner who will:

  • Clean all surfaces.
  • Launder and change linens.
  • Wash and put away any dirty dishes left out.
  • Keep track of stock of cleaning supplies (like toilet paper, paper towels, soap, and any other amenities provided at the property).
  • Let you know if there’s any damage to the property.

The best place to start looking for such a person is by asking the Realtor used for the purchase of the vacation property. Very often he or she will have a few names to recommend. If that fails, try posting an ad on services like Craigslist. Always interview the candidates, preferably in person, and select a licensed and bonded professional. Be sure that there is good rapport and communication. This person will play a critical role in the success of managing a vacation rental from afar.

Effective Advertising of the VRP

  • Once a suitable cleaning person is found and the property is well furnished and ready to rent, it’s time to advertise. The HomeAway corporation has recently bought many of the vacation rental by owner portals out there. This makes it easier to advertise on their multiple portals, like,, and Listing on these portals is worth the investment; you’ll make back the cost of the listing with the first rental, and you’ll secure far more business with the listings than without.
  • Another valuable (and free!) source of advertising is Post an ad every couple weeks.
  • Be creative. Is the property near a ski resort? Ask to put up a flier on the bulletin board in the ski instructors’ lounge. Have the perfect spring break spot? Advertise on the local college campus.

Regardless of where you advertise, post as many pictures as possible. Renters love pictures, and the better they feel they understand the property, the more likely they are to book.

Respond to Inquiries Promptly

This is critical. Answer the phone. Answer emails. The faster you respond, the more likely you’ll be to secure a booking. Often, the potential renter fires off several emails or phone calls to VRBOs in the area. Responding quickly inspires confidence, so be attentive.

Accept Credit Cards

Renters love having the option of being able to pay by credit card over the phone, and it’s the best way for you, as a business owner, to quickly, efficiently, and dependably get payment. It’s also valuable if there’s ever damage to the property; there’s no argument and haggling with the guests, the amount can simply charged to the card on file. Accepting credit cards is one of the best ways to run a vacation rental property smoothly.

Worst case, put in some elbow grease, buy some tools like a Hobart Handler 190, and get on it!

How to Invest in Rental Property: Step-By-Step Instructions on Buying Investment Properties

Investing in rental properties can be very easily done with proper knowledge, guidance and a good mortgage broker. With the tips provided in this article, hopefully investing in rental property will be simplified and made easy for all concerned.

How to Invest in Rental Property

There is a vast array of opportunities available today in the rental property business. For every millionaire that gets lucky in the rental field, there will be 100 that are not so lucky. On an average 20 percent will lose money on rental properties due to lack of knowledge and hasty decisions.

Investing in rental property can be very rewarding if done with due diligence and care. It is a buyer’s market and many deals are offered daily. Learning how to proceed will save the investor hardship and possibly lots of money.

First Steps Towards Investing in Rental Property

In order to be well informed, learn to make some smart decisions. Knowledge is the key in learning how to invest in rental property. There are a few ways to obtain knowledge in real estate:

  1. Hire a mentor or guru
  2. Join a real estate investment club
  3. Search for information on the internet

Where Are There Guru’s for Hire?

In order to learn proper procedures in buying rental properties, a mentor is needed or a guru. Someone who will show the investor the “ropes of the trade” so to speak. Guru’s are for hire and may be quite expensive. Many investors will opt to get around this problem by working side by side with a trained Realtor who specializes in selling and listing investment properties.

A mentor will guide the investor in looking for the best deals, how to shop comparables and the art of negotiating. A smart Realtor will not teach everything, because then the service of the Realtor is no longer needed. The term due diligence is used much and this simply means to research a property thoroughly including the title report to look for all liens involved in the property.

A complete and thorough net sheet is needed to show all cost involved in ownership of this particular property also. Do not just look at the mortgage payment minus the rents. Look at the full cost of ownership including maintenance, water, utilities and repairs.

How Does an Investor Join a Real Estate Investment Club?

There are many Real Estate Investment Clubs available all over the world and joining is not the problem at all. The problem is picking the right one to join. Having enough knowledge to choose the correct one is the key.

Social Media Sites or Real Estate Online Websites?

Besides hiring a mentor and joining a Real Estate Investment Club, try searching the internet for thousands and thousands of sites offering free advice. From Twitter to the top real estate web sites, the amount of free information will be staggering. This is why in many cases it is important to be involved in the other two choices stated above.

Twitter has evolved in the last few years as the top place to get free information. Social Media is so popular that it would be literally impossible to read all the free information available in 20 years. Deciding who is legit and who is not would be the main problem.

First time investors should never take out a loan on the Internet as there are too many loopholes and problems dealing with a “supposed” good guy or mortgage broker. is a good website to search and compare mortgage rates and get the latest news on interest rates.

Use Twitter or other social media sites for what they are meant to be used for. Use them for immediate information for research and guidance and then compare that information with a local mortgage broker or Realtor.

There are many websites offering excellent real estate advice also. The top site is and they have every property currently listed on the MLS and a list of every agent or Broker throughout the US. It is a one stop place for everything the investor could need or want. Many Realtors will be glad to refer the investor to a local Realtor to help in purchasing a rental property.

What is a Seller Financed Mortgage?

Now that the investor has all the knowledge available everywhere, they are prepared to purchase, obtain a mortgage and close the deal. Never ever deal with investment property without a trained individual until thoroughly trained in all aspects.

One piece of creative financing needed by any new investor or seasoned one is how to buy a property with seller financing. So in other words where the seller is the bank. This type of financing avoids most closing cost and that is a huge savings. Traditional closing cost can amount to 3-6% of the cost of the home or rental property.

What is a Lease Option?

The next thing a new investor should learn is how to do a lease option. A lease option is an option to buy a property at a later date for a specified amount of money. It is used by many investors in buying rental properties. The difference between seller financing and a lease option is that in seller financing there is no requirement to refinance the property prior to the end of the term of the loan.

Now with this huge amount of information, anyone can purchase rental property and be a success and hopefully rich in the process.

Are you really listening to your real estate agent?

The Real Estate Business is a Slippery Slope

It is essential that buyers and sellers trust and believe their experienced real estate agents whom they hire.

The real estate business has changed dramatically since the housing bubble burst. No longer does the real estate industry see homes go under contract within 24 hours. In most instances homes are sitting on the market for days and months before they are sold.

The value of homes in some states and communities has decreased to half the value of what they were purchased for five years ago. Many homeowners have to do a short sale, which is not short at all. A short sale is when the bank agrees to let the homeowner sell their property for the current market value.

Some owner’s homes went into foreclosure because their loan payments ballooned and they could no longer afford the mortgage. Unfortunately many people lost their homes because they lost income and were not able to make their monthly payments.

Whether your are purchasing a home to live in, rehab it to make money, realtors know the market better than buyers.

The cost of homes have dropped and many people who were not able to purchase homes during the housing boom can now afford to purchase a home, because homes are affordable and interest rates are incredibly low. Investors are currently finding some of the greatest bargains ever in real estate and are buying multiple properties. They are reeling in huge profits from either renting properties or renovating homes and re-selling them.

Sellers pricing your home correctly should begin the first day your property hits the market.

Experienced realtors know when homes are priced correctly to sell. Owners are who put their homes on the market still tend to think about the value of their home when it was appraised during the housing boom. Homes that may have appraised for $350k in 10 may only appraise for $275k in the 2015 housing market.

Sellers truly think that if a realtor market their home correctly that they can ge $350k or an offer close to it. Sellers need to understand that no matter how much time and effort a realtor put into selling your home buyers are not going to pay $350k for a home that is only worth $275k.

If a buyer writes a contract for $350k and they are getting the property financed, and the house appraises for $275k, that is all the lender will loan the buyer to purchase the property. Therefore, the owner is faced with the decision to sell at the $275k, or ask the buyers to give them $75k cash, or hold on to the property. Most owners think that they are giving their property away if they sell at $275k, but they are not if the property only appraises for $275k. The seller is selling the property at current market value.

The most common strategy is that owners want to start at the price they want to get for their home, rather than the actual market value. A lot of sellers think that buyers will offer less than their asking price and, therefore, don’t want to put their property on the market for its true market value for fear that they loose money on the sell of their home. What the average seller doesn’t know is that most buyers will not make an aggressive low offer on property that is new on the market.

A little secret I learned:

When homes are priced correctly they earn more money and are sold quicker.

Sellers think they can always lower their price later if they don’t get a contract. But what sellers don’t realize is that many opportunities are missed because buyers move on. The first week a house is on the market is when it generates the most interest. If the house is priced too high, buyers will move on to the next house. By the time the seller has priced the house correctly, many opportunities to sell have been lost and it means that the realtor has to generate new interest in a house that has sat on the market too long.

Buyers listen to your realtor’s advice.

Buyers have to trust their real estate agents when they tell them how much they should offer on a property. Real estate agents know the market and have seen much of the inventory that has been sold and what is currently for sale. Buyers tend to have the false perception that they can buy homes a lot cheaper than the asking price. Sometimes that is the case, but most times the price of the home reflects the true market value based on location, size, and the cost of repairs to the home. In these cases, buyers need to offer the asking price or a price close to asking in order to purchase the home.

There is a ton of information on the internet about purchasing a home, but each real estate market is different. The internet uses national statistics and not local statistics. Local statistics are more reliable for constructing offers. When buyers won’t listen to their agent’s advice and make a reasonable offer to the seller, they get very disappointed when their offer is rejected and the seller does not counter because the buyer’s offer was unreasonable.

Thank goodness for real estate agents.

Real estate agents aren’t right all of the time, but a good real estate agent is right most of the time. Buyers and sellers should trust and believe in the knowledge of the agents they hire to represent them

Selling Real Estate and Emotions: Property Transactions and Feelings Don’t Always Mix

Unlike stocks and bonds, real estate tends to be a very emotional asset class. Because owners invest their time, energy and money into making their real estate investment shine, they feel an added connection to their building or home. While a stockholder can easily blame the CEO for the stock price decline, real estate investors can only look to themselves. Rarely do real estate investors accurately assess their value-adds or lack thereof to their investment; instead, they price their investments as they see them through rose colored glasses.

Identify Real Estate Emotions

The biggest value a realtor can bring to a transaction is an outside, unbiased opinion of the property’s value. While it is up to the seller to decide whether or not to trust that opinion, realtors don’t have the same emotional tie to the property.

Emotions cloud a multitude of transactions. In real estate short sales, the seller is obviously disappointed that the value they must sell their home for is less than they paid and even in fact less than their current mortgage. Furthermore, every lowball offer further reinforces their poor investment decision. These sellers will be much tougher to negotiate with because they feel a sense of personal failure.

Conversely, an older couple or family selling the home they built for their family will feel a huge amount of sentimental value for their home. Each memory and investment adds a bit of character to their home that another purchaser could never quantify. Again, a lowball offer personally offends these sellers because they feel as if their memories are being cheapened in the process. First time rehabbers and long time landlords often have these same emotions.

Negotiating with Emotional Real Estate Sellers

When buying real estate, investors need to understand the other sides’ perspective. Getting to know the seller and their motivations for selling can help a buyer tailor their investment pitch. While it still may be necessary to place a lowball offer on a property, potential buyers should do their best to accompany these offers with factual analysis. It might be helpful to submit comparable properties prices or a list of items that the buyer intends to replace or repair. The goal is to submit an offer that will appear fair to an emotional seller.

From an investor’s perspective, buying and selling real estate should be a transaction devoid of emotion; however, real estate transactions always involve two people and are rarely without emotion. Providing a fact-based bid and showing a seller that a the buyer intends to better the property can go a long way in making a transaction happen.

Real Estate is Too Easy…NOT!

It is so easy to sell your own home–right? That certainly is the opinion of the general public. There is skill and expertise required to effectively market your home–that is where a real estate has professional training to help do the job. You see, thie key is to define your target audience, homebuyers, that is, and gear all of your efforts towards them. In other words you would not advertise in an “Auto Trader” magazine or RV Trading periodicals. The people that are reading those publications are not in the market for a home at this time. You are best suited advertising in a local real estate magazine such as “The Real Estate Book” or “Real Estate Source”. There are many publications out there–find out which is the dominate one in your area and go with it. You also might want to advertise in the real estate section of your local newspaper and/or the Internet. But that scoop is not where the skill and expertise end.What you say in your advertisement is equally as important as where you advertise. You advertisement needs to peak the curiousity of the prospective buyer enough to make them call you. Your advertisement does not need to be so detailed that a buyer prospect can make up their mind without even inquiring with a telephone call. The ad needs to call the buyers attention to your property and entice them to call you–you then become the salesperson! Also avoid putting your address in the advertisement–a buyer might drive-by at a time when the curb appeal is not at its optimum and never call!!! There are just so many things to know about the law in advertising–that’s set for another article.