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Monthly Management Tips From MRLANDLORD.COM – By Jeff Taylor, “Mr. Landlord”

Posted on 01. Sep, 2016 by in all, Magazine Articles

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What’s the First Response You Use? 

What are the first words out of your mouth when you hear one of your residents say, “I lost my job and I will be late with rent this month”?

Here’s the top four landlord responses shared on MrLandlord.com.  Which one is your favorite?

  • “I’m so sorry to hear about (excuse). How will you be paying the rent to prevent eviction? Will your emergency contact be able to help?”
  • “If you have HALF the rent, lets switch you over to the bi-weekly Pay Day plan effective immediately.”
  • “Sorry to hear that. Rent is still due as normal. We have a list of organizations that can help if you need it.”
  • “If you can’t pay let’s help get you moved out by the 5th so you don’t get an eviction on your record.”

    Take a Close Look at Photo ID! 

    The Atlanta Police Department Major Frauds Department shared tips with landlords and property managers to detect and hopefully prevent rental application fraud. Here are three ways to help you spot a fake when looking at a Photo ID:

    1. Make sure the person on the ID is the person applying in front of you–not simply someone who has similar physical characteristics, such as a sibling.
    2. Does the address on their photo ID match the address they claim to be living at presently? If not, why?
    3. Always look at their original photo ID. Never take a photocopy or a fax of their ID because it can be easily doctored and could be more difficult to detect a fake.

      Are You Keeping Up With Market Rents?

      According to a national survey, as many as 88% of property managers across the U.S. raised rents in the last 12 months. Have you raised rents this year? Mom and Pop landlords often mistakenly charge lower than market rent. When I mentioned this on my MrLandlord facebook page, a landlord responded: “I’d rather be slightly lower than market than have vacancies. Making up for one month of lost rent takes a long time even if you are getting more rent monthly.”

      My response: I hear that excuse often from Mom and Pop landlords. However, I think it is important for landlords to learn how to fill their vacancies faster. Tons of landlords are losing way too much of their potential profits charging lower than market rents because they are scared of vacancies. What hurts the cash flow even more is that usually the same landlord that keeps their rent lower than market is also the same one who will not raise the rent during the tenancy out of fear of having a vacancy, so they lose even more in potential profits which can become significant over time.

      3 Ways to Encourage Residents to

      Return Property Fully Cleaned! 

      1. At the time of move-in have a fairly detailed cleaning check sheet that goes room-by-room, and lists items that will be inspected during the move-in and move out process. This is STRICTLY for cleaning. I do a separate sheet for condition/inventory. There are 2 columns to the left of each item, one labeled “Move In” and the other labeled “Move Out”. I tell my residents right up front that I expect the same state of cleanliness when they move out as it was in when they moved in or I will ding their deposit (which I call a security/damage/cleaning” deposit in my lease). The sheet is pretty detailed, mentioning things like “HVAC vents cleaned”, “toilet cleaned (inside and out)”, “faucet cleaned” etc. For a 3br/2ba rental, there are three sheets.
      2. On top of that I do a move-in video of the rental, making sure that my new resident is in the video so that they can’t claim later that it was an older video and the place was in horrible condition or nasty when they moved in.
      3. About two weeks prior to move out I send my residents a letter that details HOW to clean the rental to maximize their deposit return.

        Raise the Rent to Get it Rented! 

        Try this unorthodox approach shared by a successful Maryland landlord.

        “I just wanted to give a tip that was very successful for us. We were trying to rent a 1 bedroom apartment for a month or so at the very affordable price of $750. We received many applications, but not qualified applicants, mostly due to background checks and too much drama.

        We decided to take a risk and raise the rent to $825 and we got a qualified applicant with a clean background instantly. This makes me believe that some residents don’t inquire if the rent is too low, and you get a better caliber of residents at the right rent.”

        Offer a Solution and Increase Your Rent!  

        A Missouri landlord shared how he successfully uses the pay day rent payment plan concept.
        I’d like to think I’ve learned a few things in my past decade as a landlord. For example: Just five minutes ago I got a text from a resident. “Just wanted to you let you know my paycheck is going to be a little late since the 1st is on a Sunday, but I’ll have rent all paid Friday (the 6th) with late fees.”

        I’ve had this resident for almost 7 years. She’s rarely late and reliable when she is. She always gives a heads-up and never fails to follow through as planned. I don’t file until the 7th anyway, so the 6th is doable for me. In the PAST, I would’ve gotten into a funk about being on time but then I accepted that she’d pay with late fees. But NOW, I respond, “Thanks for the update. Have I told you about our bi-weekly pay day plan? It can help avoid late fees. Let me know if interested.” She responds, “YES PLEASE!”
        I’ll email her the agreement Monday. If she signs up, cha-ching, I just got an 8% raise. For those not familiar with the pay day plan, it’s 26 bi-weekly payments at 50% the normal rental rate means I get one full extra month (13 full months) per year, which is an 8% bump over standard yearly rent rate. The benefit to the resident is that now all her payments will be on time and I can give her a flawless reference any time someone asks. The benefit to me is obvious – more rent.

        During certain times of year residents begin to fall short for whatever reason. Money needed for travel to see family over the holidays, cook big feasts, buy gifts, etc. The rent money has to compete with all these priorities. The ironic thing I’ve found is that sometimes residents will have 75% of the rent, but they will wait to pay until they have the whole 100%. This can lead to a delay of 4-5 days during which late fees add up and I start getting nervous. BUT, if I give them a way to pay 50% – well, that’s manageable! Time’s are a changin’. I guess I am too!

        {Editor’s Note:   Before you act, please check with your local rent control laws as some of these suggestions may not be allowed in your area.]

        The above tips are shared by regular contributors to the popular www.MrLandlord.com  Q&A forum, by real estate authors and by Jeffrey Taylor, Founder@Mrlandlord.com. To receive a free sample of Mr. Landlord newsletter, call 1-800-950-2250 or visit their informative Q&A Forum at www.LandlordingAdvice.com  where you can ask landlording questions and seek the advice of other rental owners 24 hours a day.