“Going Green” is usually a positive phrase. Business that go “Green” are looked at as innovators and use this for a market advantage. It is hard to say anything bad about this type of greeness

However the way the city of Milwaukee is going grheck scares the heck out of me. .

As I drove the Southside neighborhoods finishing up our annual fall exterior surveys of our properties, I was shocked at the number of green boarded and abandoned homes and duplexes in that area. Even more than there were in spring

This is downright scary for someone that is heavily invested in the area such as myself, as well as I am certain, for those living in the neighborhoods.

The cause is pretty clear … a government that hated rental housing so much that they felt anyone with a pulse should be a homeowner.

We will pay for this for decades in depressed values, far below not only the top in 2006, but below even the prices we saw in late 1990′s.

Ironically the push to make everyone a homeowner in the middle of the last decade will reduce homeownership over the next couple of decades. Those first time home buyers who crashed and burned just a year or two out of the gate clearly will have second thoughts about trying their hand at this again. When their kids grow up and say “Dad, I’ve decided to buy my first house!” their parents will suggest they’ve gone mad.

This is terrible for the long term health of these neighborhoods as a lack of owner occupant buyers will suppress prices.

The only silver lining in all of this is those of us landlords that didn’t buy into the whole silly money thing six or seven years ago are finding that our occupancies have increased simply due to a lack of supply out there.

From my beginnings in the industry in 1977, all the way through 2006 there was a constant barrage of newcomers to the industry replacing those who busted out or wanted to retire.

Today I do not see them even with prices so depressed that land lording should look good to anyone with a pencil and paper (the way we did performas back in my early days) or a copy of Excel (the way the wiz kids of the 2000′s did theirs)

Yet no one seems to be buying.

Hopefully that will change in the next ten years when I plan to be selling ….

The who’s who of Milwaukee rental housing were in attendance at Joe Peter’s funeral.  So many that one person commented that if a bomb hit the church nobody in Milwaukee would have to pay rent again.  A lot of folks I had not seen in years.  It’s sad that the only time we see these people anymore are funerals for friends.

One such person was Mike, a former board member of the Apartment Association.  He asked if I remembered having lunch with him a number of years ago.  I admitted I didn’t and kiddingly asked if I had skipped out on my portion of the bill. He assured me I hadn’t and that he just wanted to thank me for the sage advice I had given him that helped him succeed when others failed.  I had him remind me of what I shared with him that he felt was so valuable.  Once he told me, I felt it still rings so true that I would share it again.

At that lunch back in probably 2005 or 2006, the height of the silliness we were seeing in real estate pricing, Mike wanted to know how to acquire more units.  I cautioned him that his focus was wrong.

It’s not about how many units you own.  It’s about being sustainably profitable.

Unit fever is a disease that has wiped many owners in both good and bad economies. So don’t aim to have 50,100, 200, a thousand units.  Rather do the math and aim to only own profitable units and create scalable infrastructure before getting big.

A different way of municipalities interacting with property owners

In Washington  D.C. they have  The Housing Provider Ombudsman a information resource for small housing providers.

Blacklisting bad tenants

THE NAMES of 400,000 Australian renters have swelled national blacklists for crimes ranging from pouring concrete down toilets to stealing entire kitchens from properties. [Source]

The untimely passing of Joe Peters taught me another lesson –  no matter how well things seem it can all end tomorrow.

Today is probably as good as day as good as day as any to write down some instructions for those things that only you know, but your employees, friends and family  will have to know to put the pieces together when you are gone.

I’ve spent most of the past 22 years as a director of the Apartment Association of Southeastern WI, yet I feel this is a question that must be asked often so that the Association continues to add value.

In a group like ours every member has a say in the direction it takes.  I became active in the association through John Chitko’s prodding me to do so by saying:

‘This is an all volunteer group. Join, put your ideas out there. If they have merit people will support them, if not you’ll learn something’

Today I urge you to take John’s challenge.

Do I think we are currently doing all that we could or should, No, but I’ve seldom thought that about anything I am involved in.  To do so would be settling.

From my perspective an association of rental property owners and real estate investors should focus on the following three activities (in my order of importance):

• Provide strong advocacy for the industry
• Educate membership on the things they need to succeed
• Provide social / networking opportunities

Advocacy includes addressing legislative, political and the public perception of our industry in a manner that makes it easier for legitimate owners and investors to succeed.

Education is pretty self explanatory, but should include how to run properties as well as how to make money in real estate in a legitimate and honorable manner.

Social and Networking includes our general meetings, trade show, Brewers tailgate party, and the holiday party.

I grade us today as B in education, C on social/networking and an Incomplete on legislative and political advocacy.  Ten years ago I would have given us an A- in advocacy, a B- in education and a C in social /networking opportunities.

Our educational offerings like Attorney Tristan Pettit’s Landlord Bootcamp are well received and add a lot of value for those members who attend.  I see us lacking the “how to make money at this business” aspect and feel that we should add more of this, while avoiding the flim-flam hucksters that some present as education.

Our social / networking offerings like the trade show, Brewers game and holiday party are well attended and these too offer  real value.  I feel that our general meetings could be more engaging.

We really got away from a lot of the advocacy that we did in the past.  We need to return to that as this is our reason for being.  Today we hear from many members that they are frustrated with all the Milwaukee County Eviction Court changes that have allowed nonpaying and disruptive tenants to remain in possession longer than they should.  We also continue to hear from owners of mistreatment at the hands of Milwaukee’s Department of Neighborhood Services (building inspection)

Our November Apartment Association meeting with be the first of at least two on challenges we face in eviction court and how to change them.

Board member Dave Ohrmundt has graciously volunteered to head up a renewed legislative committee.  Another member is considering volunteering to spearhead a statewide legislative effort if he can get others interested.  These efforts will fail if they are just one person.  If you care about what the environment that we work under, then you should become involved.  And involved does not necessarily mean fully committed, although that would be nice.  Little things done by many people have a greater effect than large things done by a single individual.   Attend a hearing at the statehouse, or help write a legislative alert, send us your thoughts on a particular rule or law, or read the pending legislative agendas.  It all helps.

So I want to hear your thoughts and ideas.  Either post them as comments to this piece or email me

Many of you know how I raved about JOTT.com, a service that allowed you to call in from your cell phone and leave yourself a message.   When you returned to your office you had an email with a fairly accurate text of the note you just left yourself.

This was one of the greatest boost to my field effectiveness in years.  No more little scraps of paper, no more forgetting something – it was near perfect.

Then Bam! They discontinued the service as of May 3rd.  I felt like I lost half of my brain.

Over the weekend I tried a new service.  ReQall.com.  I like it.  In fact I like it a lot. It’s like having the other half of my brain back!

Wells Fargo v. Sandra A. Ford is a NJ case that started as a pro se defense to a foreclosure. It ends with Wells Fargo getting spanked by the NJ court of Appeals in what will be a published decision..  At appeal the defendant was represented by Legal Services of NJ, which is similar to Legal Action of WI.

My great interest in foreclose defense cases is twofold.

First I see some of these cases holding the potential of unraveling the entire real estate market by creating hundreds of thousands of “free” homes across the nation. I fear this will cause a second and more dramatic drop in housing prices as once the mortgages are wiped people can sell for practically nothing and make a profit.

I wish to throw this question out for discussion:

What is the most important thing you know?

We all come from different backgrounds and have had different experiences.  Individually we know what we know, but no more.

Collectively we could be pretty smart and achieve more.  That is part of the power of a discussion list like the list I moderate ApartmentAssoc or the ones I participate on such as MadisonApartmentOwners, LandlordAssociationOrg or the hundreds of other groups on Yahoo Groups or Google Groups.  You ask a question and get an answer.

But what about the question that you do not even know you should ask?  So go ahead add what you think is the most important thing you have learned about landlording to the comment section.

[Note I am importing replies from the above Yahoo Groups into this comment section for all to read]

Seems like a way to increase revenue a bit but there is one big gotcha to be aware of.  In WI if parking is charged separately or an additional charge then you must collect and pay sales tax on it.

A couple of years ago the Wisconsin Department of Revenue went around checking for owners who were charging extra for tenants to park or offering a lower rate to those who did not want parking.   The landlords involved had to pay sales tax that they should have collected plus interest and penalties.

Tax 11.48 Landlords, hotels and motels. (1) LANDLORDS.

(b) The sales price from providing parking space for motor vehicles and aircraft and from providing docking and storage space for boats are taxable. If a separate charge is made for the parking, docking, or storage space, the charge is taxable. However, if a separate charge is not made and the price of a rental unit includes a charge for a
parking, docking, or storage space, and if similar units are rented at a reduced price if the parking, docking, or storage space is not utilized, the difference between the rental price of the 2 similar units is taxable as a charge for parking, docking, or storage.