Feb 23

The first question you must ask is ‘What is the market for similar units today?’

Market rates can change quite a bit in both directions.

If an area is suddenly overbuilt or there is the loss of a major employer, rents can go down. In those cases even keeping the current rent may cause you to lose a great tenant.

If the rents have gone up a lot, then you may be leaving too much money on the table.

You can look at a bunch of local ads and Craigslist to get an idea. This can be a lot of work. I cheat and use rentometer.com (they have a free level, but we do enough to make the pro version worth while) Then go and look at their comps to see where you should be as all three bedrooms in Anytown, USA are not created equal.

For a great tenant we do not raise to market, but will often raise a bit. There is a cost to turning a unit in prepping, advertising and lost rent.

If you are not planning on selling the place, getting the last 5% of rent  may be a fools errand. On the other hand if you are selling a place, 5% of additional rent can be thousdands of dollars of added value.

Dec 28

It is clearly advantageous for most people who have businesses or itemize their personal deductions to pay as many deductible items as possible in the next couple of days.  (Of course, check with a tax pro and not rely on some landlord you found on the internet before acting)

This could include property taxes, general bills due in the next 60 days, and state estimated income taxes. Perhaps if you have subscription based software etc., you could get a discount by switching to annual instead of monthly payments and move that payment into 2017. Same if you are on an installment plan with insurance let’s say.

We paid as much as we could and I’m feeling a bit broke today.  Knowing so many others had to do the same, it got me to thinking.

My prediction is retail and things like autos and refrigerators are not going to sell well for at least the first quarter of 2018 as so much was spent by small business owners in the final two weeks of 2017.

If you are into the stocks and options, perhaps there is an opportunity to make some money, knowing that the economy will be depressed for a couple of months as people recover from the forced spend to move tax deductions into 2017. (But again, don’t take my advice as I am Just A Landlord)

Dec 02

When I was just a wee lad of six or seven I was given a book for Christmas, The Way Things Work.

I do not think any gift had made as much of an impact on my life as this. Learning so many fundamentals of mechanics, physics, electricity, plumbing etc as a grade school kid was a foundation that helped me understand so much of what I needed as a small landlord that initially had to make all my own repairs.

These fundamentals also helped me succeed in my prior career in manufacturing.

How different my life would have been if instead I had gotten the Tonka dump truck I thought I wanted for Christmas.

Today, when deciding what gifts to give my grandchildren, I try to find gifts that may impact their lives as much as this book impacted mine.

In fact writing this post brought back such memories, that I just bought a used copy for myself.

Jul 19

Perhaps excluding the likes of Amazon, Google, and Tesla, most well run, and effective businesses can achieve 10, 15, 20% or more sustainable improvement every couple of years by applying “Fresh Eyes” to their procedures and processes.

Your business is doing well, at least you think so. But you know it would do better if only you could just … [put your challenges and opportunities here] You say ‘I’ll jump on doing that next week, or after the vacation, or after Labor Day or by the end of the year.’ Sorry, buddy. Ain’t happenin’. You said the same last year and the year before and…

Let’s be honest you can’t see the opportunities and obstacles, and if you do, you cannot act on them. The excuses your staff and you have created to avoid doing what must be done have been internalized and are no longer even noticed. Processes that were in place and working have fallen by the wayside. You step over great opportunities sitting on your front step every morning, without even noticing them anymore or worse, curse them for being in your way.

We are blind to missed opportunities and obstacles because we are too close. In the past twenty-five years, I went from 175 to 200 pounds. I did not see even one of those pounds sneak up on me, but they are here today. Your business is the same, slowly getting fat, but not noticed.

‘Well, I’ll just have my staff take a look and make changes.’ Sorry, they have worse baggage than you.

What we’ve done at my company for many years now is to hire a temporary set of “Fresh Eyes.” This person must be a potential superstar, who is available to work for a couple of, or a few months. They are never hired to fill a current role.

Rather the “Fresh Eyes” position is to question everything we do. You know how it is easier to tell someone how they should run their business or their life than to do the same yourself. That is what we are looking for in a “Fresh Eyes” person.

Typically we hire people outside of the rental industry, so they have a different perspective than us. We’ve had a former Health Department inspector, a former Alderman, a couple of former community leaders, a former manager of a temp service. I lean towards people different than us, but who have proven themselves as leaders and producers.

The goal is to hit a sustainable 15% improvement with a two to four-month commitment to work with the “Fresh Eyes” employee.

To get value full value from this experience, you must remember that “Ego is the Enemy”* and do not allow yourself to feel insulted or defensive of your soon to be former bad ways.
——
*Ego is the Enemy is the title of a book on Stoicism by Ryan Holiday – It is worth the read. Find it on Amazon.

“MY OPPONENT IS MY TEACHER. MY EGO IS MY ENEMY.”
— RENZO GRACIE

Aug 23

We spent much of week two of our three weeks out west in the warehouse district of Los Angeles. I was shocked at how large LA’s homeless population is. I was also a bit shocked as how bad the area smelled – stale urine, extreme heat and no rain to wash it away is not very pleasant.

It is really a sad scene given the overall wealth of our country and of SoCal in particular.

An interesting real estate related concept in LA was the number of what appears to be privately owned SRO (Single Room Occupancy or rooming houses) Nice, modern buildings.

So even in this most economically, and probably socially, challenging housing environments, rental owners are able to find workable solutions by providing housing uniquely suited for a specific population.

The third thing I learned while out west for much of July is the most interesting. It has kept me busy for the past three weeks. … More to come 😉


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