The three most asked real estate investment questions.

 When I talk with folks about rental real estate investments they often site late night problem calls from tenets and torn up houses as the reason they would not buy a rent house. I have owned rent houses for over thirty years and have not had those problems. Maybe it is because my background is in management and having a problem solving mind set is helpful. When I am presented with a problem I immediately start looking for a solution, I never dwell on the problem.

Why is it that I have such a low tenet turnover?
Four things:
* Never rent a place you would not move into.

* Rent at 10% less then market rates.

* Give good customer service.

* Pick your tenets carefully.

 You can rent for less then market rates if you buy the properties right (at a bargain price) in the first place. You shouldn't rent a place that you would not live in yourself as a matter of honor. Giving fast attention to any problems your tenets may have actually reduces operating cost in the long run. Running back ground checks on potential tenets avoids problems and weeds out the bad tenets.

 We provide a better place to live, at lower then market rates and we give timely response to problems.

If a tenet can not find a better place to move to, and it will cost them more per month to move, and the service has been good, they are less likely to relocate unless it is a necessity. You also get referrals from this style of management.

How do you mange properties scattered around a large geographical area?

Bankers like to ask this one. We avoid management headaches. See the above question and answer. We do not rent to bad credit histories without a very good reason for the low credit score. We do not rent to criminals, drug dealers, domestic abusers, nor child molesters. We charge extra for more then two people per bedroom. We charge extra for pets. If a particular property has a particular issue we address it in a lease addendum. We always get a deposit.

Next we eliminate small issues by making a deal with the tenet. After the first year we send out a rate increase notice announcing a of $50 rent increase. We then offer to give them a $50 per month rent credit if they take care of all the small repairs such a s leaky faucets, minor repairs, lost keys etc, and they must keep the place tended too. Grass mowed, trash picked up and otherwise treat the place as if they owned it. Most tenets will take you up on this deal. I have some tenets I see only once a year when I take them a $50 restaurant gift certificate. We also have eyes on every property at least once a month.

We avoid rent collections by insisting on rent payment on time. The late fees are $35 for the first seven days and $5.00 for each day thereafter. We send a demand notice on day seven by registered mail. We also explain when they sign their lease that we will provide them a nice place to live, at a fair rental rate with timely response to their concerns, but we will not tolerate late payers and that we do evictions without hesitation. Fair is fair after all. A clear understanding going in is the key to problem avoidance.

Doing these things cuts the management headaches and time requirements to a minimum. Taking care of the maintenance issues cost less in the long run, and helps keep tenet turnover down.

How do you avoid or reduce the risk of a home being torn up?

See the first two questions. Doing those things greatly reduces the risk that you will rent to people who have no respect for others. Each time that I have heard of a house being torn up by renters I have asked the landlord if they ran a background check and if they did a rental history check. The answer has always been no. Good management is the only way to reduce this risk. Insurance covers everything else.

One more thing about damages. The most I have ever seen it cost to repair houses damaged by disrespectful tenets is $5,000. I look at this type of damage as an opportunity to make improvements and then raise the rents accordingly. Besides when some landlord gets his house torn up and he has had it with land lording I will be there with check book out buying him out and making more money.