Editor’s note: Robert Bruss is temporarily away. The following column from Bruss’ “Best of” collection first appeared Sunday, April 16, 2006.
If you own residential rental property or are thinking about investing in rentals, you will benefit from reading “The Landlord’s Survival Guide,” by Jeffrey Taylor. Known among residential rental owners as “Mr. Landlord,” Taylor has created a business of helping landlords prevent costly management mistakes. His Web site, www.MrLandlord.com, receives more than 1 million visitors each month.
The author realizes most of his readers will be new and part-time investors in residential rentals, both houses and apartments. He well understands that these investors want to enjoy the ownership benefits while minimizing the property management hassles and drawbacks created by “tenants and toilets.”
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As a longtime investor in residential rentals and frequent speaker to realty investment clubs around the nation, Taylor has a good understanding of problems amateur landlords encounter. As a property owner, he shares the techniques he has found to be successful and profitable. However, as a longtime residential landlord, I question some of the methods Taylor recommends. Maybe they work for him in his market (Norfolk, Va.), but they sure won’t work for me.
For example, Taylor suggests residential landlords rent their units without appliances such as stoves and refrigerators. In my rentals, I’ve always used modern appliances as a selling point to rent houses. I can’t imagine renting a house or apartment without kitchen appliances. Yet, Taylor suggests making the tenants provide their own appliances.
The author must be quite a salesman. He recommends maximizing cash flow by creating custom rental packages for tenants. Taylor includes a “Three-Star Resident Program” and a “VIP Program.” He suggests upgrades such as installing ceiling fans for an additional $10 per month rent, plus other extras, each at a higher monthly rent.
Although the author places heavy emphasis on screening tenants before they move in and checking references of at least two previous landlords, he admits from time to time tenants will go bad, despite “tenant training.” If this happens, Taylor wisely recommends paying the bad tenant (especially one who won’t pay the rent) “transition money” to move out without a formal eviction. Taylor is big on having two property inspections each year to be certain the tenant is maintaining the property. As an experienced landlord, my only comment is he must have a lot of spare time on his hands (or a big staff to conduct those inspections). Also, Taylor rewards his tenants with periodic contacts such as birthday cards, gifts for longtime tenants (his average tenant stays a remarkable five years), and other recognition.
One Taylor technique, which every residential landlord can use or at least attempt to use, is to collect rents automatically each month. The author explains the automatic choices, such as charging the tenant’s credit card (just like health clubs do), automatic bank account withdrawal, and receiving direct payment from the tenant’s employer or even from the tenant’s monthly Social Security or welfare payment.
A unique program the author uses to both retain tenants and get them to pay the rent on time is his plan to “transition renters into home buyers.” He rewards his good tenants by crediting them with $100 per month to his “Future Home Buyers” program to help tenants with home purchase costs. However, if tenants are late with rent, they lose their accrued credits.
Mr. Landlord is no nonsense. He is certainly not “Mr. Softie.” Taylor explains how to go after deadbeats who vacate a rental while owing rent. His techniques for collecting judgments, while perfectly legal, taught me a few things about judgment collections.
Chapter topics include: “Develop the Right Mindset”; “Identify Your Landlording Success Team”; “Study What You Must Know to Survive”; “Fill a Vacancy with the Ideal Resident”; “Screen Out Problem Residents”; “Conduct New Resident Orientation”; “Get Your Money”; “Maximize Your Cash Flow”; “Keep Residents Long after their First Anniversary”; and “End All Relationships on a Profitable Note.”
Both new and “old pro” landlords will benefit from reading this innovative book, which shares unique landlording ideas. Readers can either accept or reject each suggestion and move on. On my scale of one to 10, this well-written very creative book rates a solid 10.
“The Landlord’s Survival Guide,” by Jeffrey “Mr. Landlord” Taylor (Kaplan Publishing Co., Chicago), 2006, $18.95, 191 pages; available in stock or by special order at local bookstores, public libraries, 1-800-245-2665, and www.Amazon.com.
(For more information on Bob Bruss publications, visit his
Real Estate Center).
