Landlord Business Insider

Water bills creeping up in a rental unit, but you don't know why?

2009-07-10T01:35:00.004-04:00

Are your water bills high in one of your rental units, but you aren't sure why? If you've already ruled out leaky faucets, pipes and outside hoses, tenant's washing their cars (and their friends cars and filling inflatable kiddie pools, etc.), or a bum water meter, then maybe it's a toilet that's the culprit.

You can't always hear or easily see a toilet tank that is leaking. If you look inside your toilet, you'll find a rubber flapper which is normally at the bottom of the tank, over the hole which allows the water to go from the tank to the bowl. When you flush the toilet, the flapper is pulled upward, which allows water to go from the tank into the toilet bowl and "flushes" the toilet bowl.

If the flapper is not creating a tight enough seal when it is down, water can slowly leak into the tank. Slowly enough not to be seen, but over the course of the month it could result in a lot of water wasted, and an excess water bill! The quick fix is to buy a kit which normally runs about $10-$15 and replaces the inside "guts" of the tank.

But before you spend a couple of fivers and a half hour of your time on the repair, here's a simple test you can do to see if this is the problem:

1. Make sure you don't have any toilet cleaning tabs or solutions that color the toilet water. You want to do this test with clear toilet bowl water!

2. Add a few drops of food color to the tank (preferably a darker color like blue or green) .

3. Wait an hour or so and check to see if any of the colored water in the tank has leaked into the bowl.

4. If it has leaked, you can usually replace the "guts" of the toilet pretty easily. The cost is nominal, usually around $10 or $15 bucks for the do-it-yourself repair kit at the local home improvement or hardware store. The time to do the repair is probably about 20 minutes to a half hour if you are handy, maybe more if you aren't.

5. Reap the water savings of a non-leaky toilet and feel good that you are helping to conserve water! (Save green and be green!)

Just another day in SMART landlording!
-Steven Boorstein
Landlord and Author

A "real life" example of why even DIY Landlords need a good network

2009-06-19T23:53:00.000-04:00

In a recent post, I asked the question, "Do you do your own repairs?"

I don't want to rehash that post, but just give you a personal example of why it's important to have a network, even if YOU do most of your own repairs.

Last Saturday, I came down with some kind of terrible virus. This one hit me hard. I felt like I had the flu ("Swine flu?", you ask. Well, I don't know... maybe. I went to the doctors, but they didn't test me for it. If it was swine flu, I don't wish it on anyone.). The next day, Sunday, I felt even worse. That was also the day that one of my tenants in a unit about a half hour away phoned me to tell me they had a problem with their water heater-- as in, NO hot water.

So, here I am, 7pm at night on the phone with the tenant. I feel achy. My eyes hurt. I am getting chills which are alternating with periods of hot sweats and I'm totally exhausted. My first reaction was to tell the tenant that it was probably the pilot light on the water heater, hoping they might know how to relight it and take care of the problem. The issues with that line of reasoning, unfortunately, are that neither do they know how to relight it or am I comfortable with them attempting to do it anyway.

I tell the tenant I will be there first thing the next day (Monday). They hang up relatively happy and I'm now thinking how I can beat traffic on Monday morning to get there as quick as possible and hope I'm feeling OK. However, Monday morning I wake up, not much better than the day before, and after vomiting, realize that "it ain't gonna happen."

It's now 8am and I call my plumber. This guy is good. He's responsive. He knows the property and is familiar with some of the tenants. Most importantly... at 8am, he answers the phone. I sound so bad, initially he doesn't recognize me. In under two minutes, he's got the info he needs, tells me not to worry and assures me he'll take care of it. He does and, in fact, it wasn't the pilot light like I thought, but another issue which he easily fixes-- but would have stumped me. And, while he was there, he headed off another major problem that was developing, which I would have had to call him for that day anyway.

So, my acute illness reaffirmed two important lessons for me. First, having a personal network of repairmen and contractors that can help out in a pinch is very important. Second, concentrating on calling these professionals in the beginning, rather than trying to do it on my own first, is a smarter business plan for me. Even if I had been feeling well, going out to the property and trying to take care of that issue myself would have resulted in at least an hour and a half or two hours of my time. Time that would have been wasted because I couldn't fix the problem anyway. I don't mind spending money on a valid repair. And I don't mind spending time to diagnose or fix one, if I can save enough money. But I hate spending money AND time, when I could have just paid a repairman or contractor a reasonable price for the repair and spent almost none of my own time in the process.

Hopefully, you never get have a rental repair issue while you are ill, or on vacation, or at work. But, since it IS likely to happen at some point, my advice is-- start putting together your own personal network of repairmen and contractors. And... learn when to stop wasting your time.

Regards,
Steven A. Boorstein

Landlord & Author

"Fair Housing Isn't Always Fair"

2009-06-12T17:18:00.003-04:00

"Fair Housing Isn't Always Fair." That's a quote from Doug Chasick, Chief Learning Officer and Senior VP of Multifamily Professional Services for CallSource, a web based education provider.

Awhile back, I received an email from Rachelle LaCroix, on behalf of the National Apartment Association(NAA). Their educational arm has developed a 4.5 hour seminar/course called "Fair Housing and Beyond" which is available through NAA affiliates, IREM chapters or direct-to-real estate companies. A link to this material follows at the end of this post. Although it looks to me like it might be of greater interest to property management company executives, larger property managers and their vendors and agents, I think that the interview that I am posting, with Doug Chasick, is valuable information for all landlords and property managers. Fair housing violations are not only costly, they are illegal. So keeping abreast of fair housing issues is very important... and as you will read in the interview... not always "common sense." The links Doug gives are very helpful and you should seriously consider bookmarking ones that apply to your landlording business. Here is the Q&A with Doug Chasick, with permission to print from the NAA...

"Fair Housing Q&A with Doug Chasick, The CallSource Apartment Doctor and consultant for National Apartment Association Education Institute/IREM Fair Housing Course

1) What's something most property managers and renters are surprised to learn about fair housing?

I think the two most common surprises are that fair housing isn't always fair - it's actually not about being fair; and that common sense is not very helpful when dealing with many fair housing issues. I think a close third would be how much illegal discrimination is still going on.

2) Along with the National Apartment Association Education Institute and NAAEI/IREM course, what are some other resources that property managers can turn to for information?

Here are the sites I visit on at least a weekly basis:

U.S. Department of Housing and Urban Development – www.hud.gov
National Fair Housing Advocate – http://www.fairhousing.com/index.cfm
Judge David L. Bazelon Center for Mental Health Law Fair Housing Information – http://www.bazelon.org/issues/housing/index.htm
Fair Housing Accessibility FIRST Initiative – http://www.fairhousingfirst.org/
Realtor Fair Housing Resources – http://www.realtor.org/rmomag.nsf/pages/fairhousingmain?OpenDocument
State and Local Fair Housing Enforcement – http://www.fairhousinglaw.org/fair_housing_laws/laws/

3) How often do you recommend staff and management participate in fair housing training?

At least annually, provided that there is one person in their company who regularly monitors the first two sites above and issues the appropriate updates to the entire team. I also strongly recommend that no employee, regardless of their title, be allowed to interact with residents, guests or prospects until they have completed a fair housing class.

4) What is the most violated mandate that you've encountered?

For the past four years it's been almost a tie between disability and race (see attached info - for full report, go to:

http://www.hud.gov/offices/fheo/library/FairHousing-FY2007AnnualReport.pdf

For more information on the Fair Housing course and how you can order your own DVD, please visit http://www.naahq.org/FairHousingBeyond "

Remember, landlording is a business. And to run your business effectively, you need to have a very good handle on the issues: legal, ethical, management, social, etc. Knowing the Fair Housing Laws IS good business.

Steven Boorstein
Landlord & Author
How To Buy Your First Rental Property and Beyond
www.LandlordBusinessInsider.com
www.HowToBuyRentalProperty.com
www.ManageRentalProperty.com

Do You Rent To Tenants With Pets?

2009-06-08T23:30:00.002-04:00

One of the great debates among landlords are whether it's a good idea to rent to prospective tenants that have pets. On the one hand, there are so many landlords that do NOT allow pets, there is a definite marketing advantage to those landlords who do. On the other hand, buy not having a good pet policy, you run the risk of added damage, legal issues and other problems. So, what should you do? And, if you do decide to them, how can you protect yourself? Read on... and also share your views...

When I first started renting my apartments, I didn't want to accept pets. My feeling was that the potential damage, liability and nuisance of having pets in my units was not worth the aggravation. However, at one point I had some vacancies that I found difficult to fill. The problem wasn't the number of calls that I was getting for prospective tenants, it was that they weren't qualified. Either their income level wasn't high enough, or they had bad credit, or they had pets, etc.
So, I made the leap. If a prospect had good income, good credit and met my other criteria-- but they had a pet-- I decided that I would still show them the apartment. Since then, I've had some good experiences and some bad ones. And, I'd like to share some of them with you and also get your feedback, if you have experiences that can help your fellow landlords out.

Here is my personal experience, yours may differ:

1. Tenants that own pets are generally just as neat, and sometimes neater, than those who don't own pets.
2. My best experiences are with small pets, as compared with big ones. But, it depends on the particular pet-- you must "meet the pet." Like there are good and bad tenants, there are good and bad pets. Check out their personality before you agree to rent.
3. Again, in my experience, small dogs have been less of a problem than cats, who have more often sprayed the walls and carpets to mark their territory.
4. Dogs and cats should be spayed/neutered and property licensed/registered.
5. Dog and cat urine smells are VERY difficult and sometimes IMPOSSIBLE to remove-- especially from flooring.
6. Pet owners should be willing to sign a PET AGREEMENT ADDENDUM to the lease. While not being overbearing, it should enforce very strict rules and consequences to protect your property, other tenants/guests and minimize your liability.
7. Pet owners are usually willing to pay a PET DEPOSIT and/or an ADDITIONAL RENT for the privilege of being able to live in pet friendly buildings.
8. Some studies show that, on average, tenants with pets stay longer than those without pets.
9. Accepting pets potentially reduces the time it takes to fill a vacancy.
10. Renting to tenants with pets may increase your liability, and therefore, liability insurance-- make sure you speak with your insurance company.
11. Check the laws and know who you can and can't refuse. For example, in most cases, you cannot refuse to rent to a person solely because they have a "trained helper animal." This would include pets like a "seeing-eye dog", or a dog that helps the tenant "negotiate" with a physical or mental disability.

Based on my personal experience, I rent to pet owners selectively, on a case by case basis. I have found that most of the time, renting to a tenant with an animal is not a problem. However, when there is an issue regarding the pet, unfortunately, it is usually a more costly problem by comparison than a tenant that doesn't have an animal. For example, I have had tenants that were slobs and when they moved, I had to get the carpets professionally cleaned. However, tenants that in addition to being slobs also allowed their pets to use the carpet or hard flooring as a toilet have caused me more angst because I have actually had to replace relatively new flooring and even padding that was ruined by pet urine.

When I do accept a prospective tenant with an animal, I always institute a strong PET AGREEMENT, which is made part of the rental agreement. Given the choice, I still prefer tenants who do not have pets over ones that do have them. However, I have had enough positive experiences not to automatically rule out this group of renters.

What are your thoughts and experiences? Do you rent to pet owners? Why or why not? If you do, how do you protect yourself?

Steven Boorstein

Landlord & Author

The Landlord Business Insider

How to Buy Your First Rental Property & Beyond (http://www.howtobuyrentalproperty.com/)

Manage Rental Property.com (http://www.managerentalproperty.com/)

Review: FreeForeclosureBlog.com

2009-05-20T16:53:00.000-04:00

I was just asked to do a review about a site called FreeForeclosureBlog.com. I get requests all the time from companies that would like me to review their sites. Most I turn down, so why did I agree to do this one? Is it really any good? Does it offer something valuable to my subscribers and readers? Actually, the answer is... maybe. I decided to take them up on the offer to do a review, and here is what I found. Disclosure: I was paid a small fee to do this review with the understanding that I would be allowed to publish my honest opinions. So here they are...

The site promotes itself as the place to go for free REO foreclosure listings. As an active rental property owner, I'm always looking for a good buy, so a site like this could be worthwhile. Most foreclosure listing sites are not really free, at least not after the initial "trial" period. Sometimes, however, free IS really free. So, if I could find a site like this and it was of great quality... I'll certainly use it.

The FreeForeclosureBlog.com still looks to be new and undeveloped. There is a lot of potential there, but I think it has an image crisis. Hopefully, the owner of the site will take this criticism as constructive and use it to make a really great and worthwhile site. So here are my impressions:

It looks like the site was initially more of a project by it's owner as she searched to find foreclosures herself. I think her initial idea was to try to aggregate the data from many of the different bank REO sites into one site where users could go and search for most of the REO listings out there from the major banks. Unfortunately, (and I'm assuming she has permission to aggregate REO data from these sites) freeforeclosureblog.com current is very, very sparse to non-existent on listing foreclosures in my area or other areas that I am familiar with locally. However, I know that there are many foreclosures in these areas. For example, I can go to a site like Realtor.com and search the listings to find more bank owned properties in my area. In addition, I can go to my county website and find literally dozens, if not hundreds, of properties in foreclosure/sheriff sale, (also for free). I think the site needs to upgrade their technology to do a better job of providing more free foreclosure listings. The good news is, if the site is successful at actually being able to include a large amount of listings, it would be quite a valuable site to visitors.
The site also has an identity crisis of trying to be both a blog and a free REO listing site. Unfortunately, the blog is not often contributed to, but if developed could be a great source of information for new and experienced investors/buyers. There are multiple areas of the site, some of which seem very interesting, like REO Websites, Bailouts, Foreclosure Auctions, Real Estate Trends, etc. However, with the exception of REO Websites, the others lack any significant content... and the REO Websites section is only marginal with just nine links (although those nine links ARE useful!) When building a professional site, I'd generally recommend if you are adding a section... have enough good content BEFORE you add that section to your site. Otherwise, it doesn't look as professional. Once again, excellent ideas, but lacking on the execution.
Lastly, the site has a section that says "Do you have a home for sale? Add it here for free." I didn't quite understand this... where does this fit into bank REO foreclosure listings. Again, an apparent identity crisis.

So, currently it is difficult for me to tell readers that this is a very valuable site. Yes, it IS worth checking out, and maybe checking back periodically to see how it progresses as time goes on. FreeForeclosureBlog.com has, in my opinion, very good potential if it develops into a full content site-- kind of a "one stop shop" for properties selling at a discount (foreclosures, REOs, etc). Hopefully the site will continue to develop and I'd be happy to take another look at it sometime in the future when they have made much more progress. I'd love to see a site like this succeed and develop into something that could be a very valuable, free resource to those seeking properties at a discount. Again, hopefully the site takes this review as constructive and pushes their site to new limits. I think they've made a good start, and as Walt Disney would say, "keep moving forward!"

Landlords: Do you do your own repairs?

2009-05-05T11:50:00.000-04:00

One of the important decisions that every small landlord needs to make is whether they will do their own repairs or whether they will contract it out to a handyman or other trade professionals. There a number of reasons that this decision becomes important. Here are some things to consider:

First, your time has a value. Do you have enough time (and knowledge) to do the repairs yourself? Is it more effective for you to utilize a handyman instead and spend your time on other things (your primary job, searching for other properties, your personal life and family, etc.)

Second, repairs cost money. If you are "handy with a hammer" and can do your own repairs, how much money will it save you? It is important to know your skills and limitations. For example, in the beginning I did a lot of repairs and improvements myself-- repainting rooms, fixing faucets, replacing toilets, etc. What I found over time, however, was that in a majority of cases I was wasting time by not hiring a contractor. Time IS money. The time I was wasting was resulting in it taking longer for me to get a unit back on the market, or required me to take too much time away from my primary business. On the other hand, I know landlords who have been in business long enough to have paid off most of their properties. Landlording is their PRIMARY job. For them, taking a day to paint a vacant unit is what they do. It saves them money and is part of the time they spend in their primary job in managing their properties.

Third, repairs and maintenance are liability issues. Think you can fix that electrical box? Ready to install that second floor deck? Ok, maybe you have the knowledge. Make sure you also get the right permits and inspections. However, if you are not skilled and knowledgeable in these areas, you might want to strongly consider hiring a licensed contractor. If the house burns down from an improperly wired electrical box, or the deck collapses... from a legal standpoint I'd certainly like to be able to show that these things were installed by a licensed contractor with any required permits. I don't know how well it would sit with the courts or insurance company if, instead, you told them you were just trying to save a few bucks and thought you could do the repair yourself. On the other hand, if you have a couple hours and have to replace/repair a sink faucet or paint a front door, the potential liability issues are probably not a real big concern.

If you are a landlord, what do you do and why? How do time, cash flow and liability issues affect your maintenance and repair decisions?

Steven A Boorstein
Landlord & Author
How To Buy Your First Rental Property and Beyond
ManageRentalProperty.com

Rental Properties: Should I use an accountant or tax preparation software?

2009-03-11T18:41:00.001-04:00

One question that I have repeatedly gotten is if accountants are worth it or should a landlord just do it on his own, when it comes to income tax preparation.

Now, this has nothing to do with QuickBooks. Quickbooks is an excellent example of accounting software to help you track your income and expenses, invoices, bills and a whole lot more... easier than any paper system or spreadsheet. It also prints out great reports that you can use to evaluate your cash flow, income and expenses and help PREPARE FOR (not prepare) your taxes.

At some point, every new rental property owner who used TurboTax or some other income tax software prior to owning properties probably asks themselves this question. Although I don't have any problem with these tax software packages, owning rental properties makes tax time a little more complicated than before you owned them.

Owning rental properties throws a whole bunch of new items into the equation. For example, different things that you buy or do for your properties get depreciated at different rates. Keeping good track of the basis in your properties and knowing what items can be immediately deducted from your settlement sheet and which are simply added to your basis is extremely important.

It could be that the tax software you have does a really great job at helping to track this, but if you are even audited, are you comfortable with answering the questions an IRS agent might have about how you tracked, expenses and reported your income and expenses?

Now, I'm not an accountant (and I don't play one on TV, as they say). But my strong opinion, to anyone who asks, is that the right accountant is worth their fees because of the advice that they provide and the function they play in watching your back and keeping your nose clean with regard to income tax reporting.

The caveat is that you want to hire the RIGHT accountant. I have an accountant that has excellent knowledge of my personal situation and understands which deductions are appropriate to take in my situation and which are not. He also knows what my goals are for the rental properties and helps me plan on the future structuring of my taxes. My last accountant hated rental properties and always told me they were a waste of time and money... The year he started ranting about that was the last year I hired him.

But, hey, maybe I'm wrong. If so, please chime in. What do you use, an accountant or tax preparation software? Why?

Steven A Boorstein
Landlord & Author
How To Buy Your First Rental Property and Beyond
ManageRentalProperty.com

Better ways to track your property income and expenses

2009-03-09T23:21:00.000-04:00

The first year I purchased a rental property, I think the "shoe box" method was what I had used most of that year to track the property's income and expenses. Basically, I saved all of the receipts and rent envelopes that I received in a shoe box (actually I think it was an expand-a-file). At the end of the year, I went through each rent receipt and each bill and wrote it on one of those large green and beige general ledgers. When I went to my accountant, it took about an hour and a half for him to correct the mistakes I made!

A big lesson that I learned early on, is that tracking your income and expenses throughout the year does a couple of important things. First, it helps you manage your rental properties better. You can more easily know the income that is coming in, who has paid their rent and who hasn't. You also have a better handle on your expenses. Put these two things together and you now have a better snapshot of your CASH FLOW! Yes, keeping track of that important, but often elusive figure will help MAKE YOU MORE MONEY. So...

The second year I developed a spreadsheet. It helped, because I had also purchased another property and now needed a way to keep track of things as the year went by. I was now able to see which tenants had paid and who owed. I could also track how much money I had spent year-to-date. That spreadsheet worked for me until last year, when the number of rental units that I had accumulated finally made that spreadsheet just a bit unwieldy. However, if you are just starting out and don't need anything sophisticated and/or you don't have a lot of properties, then a spreadsheet like the one I created is a great way to track you income and expenses. It's not fancy, but it works and I have had accountants compliment me on it's functionality at tax time.

On the other hand, if you have a number of rental units, or plan to have them in the near future, I'd recommend moving up to the next level. That would be accounting software, like QuickBooks Pro. I began using QuickBooks Pro in 2008 after I realized that my spreadsheet just couldn't effectively handle the number of rental units that I was trying to manage. QuickBooks Pro, as I soon found out, had the ability to track income and expenses easily and would also allow me to scale up to as many as I could handle! In addition, it allowed me to generate some great reports, like Profit and Loss, Collections, etc. One of the great time saving features that it offers is the ability to generate rent due invoices, late notices, eviction notices, etc. The ability to customize it to meet your needs is truly fantastic. Another plus is that many accountants use QuickBooks and can not only help you set it up correctly, but you can even email or give them an electronic file with you data on it and they can do their tax magic by directly utilizing that data.

There are some negatives, however. QuickBooks has a learning curve that is pretty steep. Compared to my $8 spreadsheet, expect to pay about $100 or more for QuickBooks Pro and need to upgrade to the new version every couple of years or so. For landlords and property managers, QuickBooks Pro is the version that is usually most applicable. I does take some time to initially set it up, but it does an excellent job once it is set it up correctly. There are Certified QuickBooks Advisors that you can pay to help set it up the right way and there are tutorial books out there to help, like one by Nancy Neville called The Easy Way to QuickBooks Beyond the Basics for Landlords & Property Managers and another called QuickBooks for Real Estate Investing and Property Management by Jonathan Wolter.

As for other options, many people use "ready to run out of the box" property management software that are user friendly and simplify the process of entering data and providing forms and reports for your property management endeavours. I haven't found one to date that I thought was excellent enough to replace the first two options that I have used. However, they can add some additional functionality, so you may want to check some of them out.

One of the best things you can do is to start early in the year tracking your income and expenses. Not only will it help you get a better handle on your rental properties; it will also help save you a lot of time and headache when getting ready for your taxes next year!

Your profit is determined by your purchase price

2009-03-03T23:15:00.000-05:00

I just wanted to do a quick post on the importance of paying the right price when you purchase a property.

Here is an example. I am bidding on a smaller multi-family apartment complex of about 15 units. The current owner had bought the property for about $730K, four years prior. Maybe he put $20K or $30K into it. He was now trying to sell in the mid-$900K range. Based on the cash flow, the property is currently worth in the mid-$800K range, about $75k off from his asking price.

Based on the current real estate market, I wouldn't put the market price much above that either. In fact, since I had started negotiating the property over the last month or so, two bids came in around $750K, from what I hear around town. (An important thing you will learn if you concentrate on properties in a specific area is that the rental property ownership world is actually much smaller than you would think. You can often find out information or figure out who is bidding on a particular property by just keeping your eyes and ears open, and through local networking.)

Trying to be fair, I started my bid in the low $800K range. I then moved up into the $825K range after the Seller countered below $900K. However, I just learned from one of my networking contacts, that today someone just outbid me. Unfortunately, he actually bid higher than the first counter offer the Seller had given me!

That tells me a couple of things. First, that bidder didn't put his initial offer in low enough. Second, both a market analysis and projection of net operating income and cash flow shows he's already paying too much and probably hasn't analyzed the property well. Even if he has a large amount of money to put down, paying a price that's too high is foolish. Wealth in property (capital appreciation) is built over time and is directly related to the price at which you purchase that property. Of course that's not the only factor, but it sure is a primary one. You can buy the right property at the wrong price and never make any money!

There is a lesson in this scenario. You may lose a deal like this one. But, never get into a bidding war just because you "really like" the property. I don't get into bidding wars over properties. I refuse to pay too much and get emotionally involved. So, in a case like this, it would be better to wait and see if the Seller accepts the offer from the new bidder. If he does, I'll still keep in contact with the agent over the next several weeks, just in case the deal falls through. That's happened to me before where I've been able to pick up a property at a great price simply because the Seller was more motivated after the other deal had crashed. When that happens, the Seller is often more motivated to try and negotiate with me, since not only do I present myself as a serious buyer, but the Seller is regrouping from an emotional "letdown" of not being able to close the first deal as quickly and easily and for the price he had hoped. In essence, I catch the deal on the rebound.

There are always deals. Sometimes you just need to be patient. Sometimes things don't work out exactly as planned. That's okay, just move on to the next deal. In any case, keep you head on straight, negotiate fairly, and for the last time... DON'T OVERPAY just because someone else is willing to bid higher than you!

Best of luck and happy property hunting!
-Steve

On-site Tenant Manager - good management practice or potential pitfall?

2009-02-16T21:02:00.000-05:00

Sometimes the questions that I get from tenants are useful in helping us rental property owners to think through some of the management issues that we face.

For example, I just received an email from a reader of ManageRentalProperty.com that asked this question:

"I'm so glad you have this helpful website. Thank you. I actually have never really managed anyone's property before, but have an opportunity to do so now. I was wondering what an even trade-off would be. For example, is living rent free in one of the apartments in a 4-plex, while managing both this 4-plex and a duplex, and even trade-off? The 2 bedroom apt. that I would be renting is in a low income area and the owner is getting $600.00 per month for her units. My management responsibilities would include maintenance on all 6 apartments, as well as, collecting rent. Can you help? Thanks."

This was my response:

"The answer, of course, is 'it depends.' I guess you could say, it's whatever you both agree on. A property manager, for example, normally makes between 4% and 12% of the rental income of the property. So, for example, if there are 6 units, each getting $600 in rent, that's 3600 per month. A property manager would generally make between $144 and $432 per month, depending on the number of units managed and the services being provided (eg. rent collection, evictions, maintenance and repairs, bookkeeping, bill paying, etc.)

Before you enter into any type of agreement to manage a property, however, please make sure that you are not violating any licensing requirements for property managers in your state, meet income reporting requirements (yes, free rent for managing a property is considered "income"), and you have proper liability insurance (in case you do a repair and the tenant gets hurt, or the tenant sues you for discrimination, etc.). You may want to consult an attorney and accountant before you agree to do any property management services.

Although the arrangement seems simple, in actuality, it is potentially much more complicated and could be considered a business. That business may either by "yours" or you could even be considered an "employee" of the landlord.

Best of luck, but for your sake and your landlords, please be careful and make sure you both know the issues that you may face."

What do you think? Any landlords or tenants out there that currently have this arrangement? Am I making this too complicated or is it much more commonplace than I would think? Comments welcome!

Questions on Buying, Owning or Managing Rental Properties? Ask them here!

2009-02-03T12:30:00.001-05:00

Although I haven't posted in awhile, I've still been monitoring the site. Readership has almost doubled over the past six months as people have checked out this site to help answer their questions on buying and managing rental properties. Unfortunately, I think the site could have grown even faster, but I was plagued with a major problem in that the site took what felt like forever to load! I tried a number of things, deleted some non-important links, etc. Nothing seemed to work. Then, I edited the HTML and found a link to a site that no longer exists. I deleted it and presto! No more frustration... the site loaded almost instantly. So for those of you who have stuck with me through these "slow site" sickness--- thank you!

And, seeing as how I haven't done anything new and there is an increasing demand from people who are looking for good, common sense information and guidance on rental property issues, I'd like to try and take things to the next level. The next step for me is getting this blog to be more interactive. In order to be successful, this requires YOUR help! And, in return, I'll be helping you, too. What can you do to help make this site a source that would be an even MORE VALUABLE RESOURCE to you and your colleagues? First, reading and subscribing (free, of course) to this blog. That, you are already doing... at least the "reading" part. Second, PLEASE FEEL FREE TO POST COMMENTS ON THE BLOG POSTS. If you have your own site, or blog, I'd be more than happy to discuss how we can network together and help each other. Last, ASK QUESTIONS! In order for me to help you, I have to know what questions you want me to answer or topics you want me to discuss. Although I could just rant on the subject of buying, owning and managing rental properties--- it would be way more useful to you as readers, if I actually answered some of the burning questions on your mind, right?

Also, I'm always open to constructive criticism. Want to see new features? Ideas or comments on how to make this blog better? You tell me what you want and gosh darnit, I'll try to deliver. You can also check out my other sites: How To Buy Rental Property and Manage Rental Property. Would you like to see these sites combined? Do you like one format better than another? Let me know!

I look forward to helping you by providing a site that you can trust and use to help grow your business better!

Regards,
Steven

Reader Question: Contractor or Home Inspector?

2008-08-04T09:27:00.000-04:00

I just received a question from a reader asking, "Do you use a team of contractors or a property inspector to look at the rehab that is going to be needed on the property?"

Here is my response:

I have used home inspectors for many properties, but as I developed my network of contractors, I generally bring them in to do the inspections for a couple of reasons.

First, although home inspectors are impartial, many are very worried about the liability of missing something or the client suing for not disclosing something. This often results in a huge report on the property you are looking at, in my opinion, often blowing the problems out of proportion. Although it might be good for negotiating with the Seller, it often scares Buyers away from a perfectly nice property.

Second, my home contractors will often go with me through the place for free and give me a list of what needs to be done. The advantages of this are that these guys are experts in those issues, I trust them, and I get a valid estimate on the repairs-- rather than a guesstimate from the home inspector.

Now, I'm not saying not to use a home inspector. Like I said, I have used them, too. However my personal preference is to use my trusted contractors who are the ones who are going to do the work. In order to do this, though, you need to have professionals who can look at the building structure, electrical, plumbing, HVAC, etc. If you are not at that point, then a home inspector may be a good option.

Best of luck,
Steven

Purchasing Commercial Property (Part 7 Commercial Contracts)

2008-08-02T22:30:00.000-04:00

It's been awhile since I have posted. For all who have been looking for this next article, I apologize for its lateness. Between purchasing and rehabbing the building, advertising for tenants and my other businesses, I kept pushing off my posts thinking "I'll get to it tomorrow!" Well, after a couple of months of saying that I finally realized that I had to write this post since it wasn't going to write itself.

Commercial Contract of Sale
At least in New Jersey, it's the wild west. Realtors do not have a standard contract used consistently throughout the state. In my case, I was purchasing the property from a bank that had foreclosed and given the property to an asset management company to handle. The contract was EXTREMELY one sided. It gave them the ability to cancel it at any time, to charge us a fee per day if closing was delayed, and basically forced us to purchase the property with little to no disclosure on their part and little due diligence time allowed on my part.

Although I've negotiated numerous contracts, I had never dealt with a commercial one, so I had an experienced attorney review it and help me put in the appropriate wording for what I wanted in the contract. Not only did we get this done after several difficult rounds of negotiation with the seller, but the attorney actually found something that I had missed with regard to buyer paid settlement costs. Within the contract the seller had changed a normally "seller paid" expense into a "buyer paid" expense. Due to the amount of changes I was making to the contract, some of the potentially pressing environmental issues that I was tackling and the difficulty I was having dealing with the sellers-- I missed that one line in the contract! By changing this part of the contract back to a "seller paid" expense, the attorney saved me about $3500. Well worth the cost of having the attorney review the document.

Especially when purchasing a commercial property, make sure you have the right to have a full inspection, including structural, HVAC, electrical, plumbing, environmental, etc. You want the right to be able to back out of the contract and have all deposit monies returned should any of the inspection be unacceptable.

The lessons here are to make sure that you have the contract reviewed by a competent legal professional and know what you need to get out of the contract to feel confident that the deal isn't going to be too risky. Then inspect the property to make sure you are not getting a "white elephant" that could cause you major problems down the line.

In a future article, I plan on covering some of the more important governmental issues of which you need to be aware of when purchasing commerical and even residential properties.

Best regards,
Steven Boorstein
Author and Landlord

Purchasing Commercial Property (Part 6 Negotiation continued)

2008-05-13T12:25:00.000-04:00

So in my last post in this series I placed the "best and final" on my target office building and and guess what happened? I LOST!

Okay, you may be thinking, you were asking for it since you didn't raise your price. But, I stuck to my guns because that's what I felt the place was worth. Remember, don't pay more that the property is worth! Bidding wars only satisfy your gambling needs, they don't make good scenarios to purchase property.

Anyway, I figured whatever was meant to be was meant to be. I started looking for other properties-- still keeping my eye on the one that I lost... just in case. I noticed that one week went by without it being listed in the MLS system as "pending" (which would mean a contract was signed). Then another week passed and another. I found out that the buyers still had not signed a contract after three weeks!

I then recontacted the Seller's agent and explained that I was an experienced investor who had other rental units. That I felt his deals were falling through because prospective buyers didn't realize that purchasing a commercial property was different than a residential property and restated my offer at $420K. He went back to the bank and guess what: this time they took the offer! The big lesson is PATIENCE is a hallmark quality of any successful negotiation.

There's more to the this story with regard to negotiation that I won't cover in this article due to length and privacy. Suffice it to say that by the end of the negotiating process, I was able to get the sellers down an additional $40K in price due to my ability to convince them that the condition of the property warranted the extra discount.

How long did it take to negotiate this property? Well, from the time that I had put in the first bid to signing the contracts it was about three and a half months. However, the time spent was well worth the discount to market value that I paid.

In the next article, I'll cover some aspects of contracts and governmental issues in which you need to be aware.

Steven Boorstein
Landlord & Author

review: www.bruce-germinsky-realtor.com

2008-04-26T18:51:00.000-04:00

I was recently contacted by real estate agent Bruce Germinsky out of Monmouth County, NJ to do a sponsored review of his site. I don't normally do what I would consider "run of the mill" real estate agent sites, but it looks like Bruce concentrates on commercial properties. And, since my latest blog series has been on commercial property, I thought I'd take a look at the site and evaluate it for readers of this blog.

So, I made my way to http://www.bruce-germinsky-realtor.com/ and looked over the site. It seems like this agent concentrates on two major market segments:

Commercial real estate including retail, professional and medical class A office space and shopping centers. He has access to his listings, other listings and also authors a sparsely updated blog on his site regarding properties.

High-end residential real estate including oceanfront luxury condos, waterfront homes and such around the Monmouth County, Jersey shore areas.

There's not a whole lot of educational information at the site, but it does look like he is in the process of trying to build it up with some useful information for visitors. You can certainly use it to search for available properties and find out a little more about what is happening in that area. If you are interested in real estate in Monmouth County, you might find it useful to visit the site and see what's currently on the market, a bit about the areas being redeveloped and more info on Bruce Germinski and his firm.

Purchasing Commercial Property (Part 5 Negotiation)

2008-04-09T12:30:00.000-04:00

Based on the factors we discussed so far with my target property, I decided that it was worth pursuing. I liked the location, the layout and the potential income from the multiple office units, so I decided to make an offer.

The next thing that I did was to contact the township and ask them some questions. However, because this process wound up involving multiple meetings and a whole layer of issues that I never considered, I'm going to discuss the next step that I took -- negotiating the sale price -- in this article.

In many cases when you are dealing with a property sold through a real estate agent, you have no idea who the seller is until you actually sign the contracts. One of the things that you can do is to ask your agent (although they may not know or want to disclose this information), talk to a neighbor at one of the adjacent properties, or even look the information up yourself in the tax records. In this instance, I looked in the tax records and found that it was owned by a mortgage company. It had been a foreclosure and had been taken back by the company which had originally financed the deal. The foreclosure was almost a year ago.

Now, of course, mortgage companies don't want to own properties. They are more than happy to lend money to buy them, but they don't want to have to take them back, manage them and sell them. To keep the deal private, I'm going to be making up the sale price for purposes of this article. However, I'll be keeping the percentages pretty much in line with how I actually negotiated the deal.

So, let's say the asking price was $500,000. This price, incidentally, was the price that the previous foreclosed owners had paid six years earlier. Knowing this, I made an offer that was approximately 20% lower than their asking price, or $400,000. Why? My feeling was that it had sat on the market for over 10 months and the mortgage company that owned it still might be getting to the point where they just wanted to get an offer that was interesting enough to let them dump the property and get it off their books.

They came back at $465,000. That was a pretty sizable decrease, and made me feel they were motivated to sell the property. I waited a few days. Then I went back in at $420,000.

The mortgage company rejected the offer and their agent called me to tell me that they had at least one other offer. By noon the next day they wanted a "best and final." Now "best and final" offer in real estate negotiations is really an non-defined term. It does not mean that the seller has to take ANY of the offers. And it does not mean that the deal can't be negotiated further. What it is... is a way to try to scare the buyer into bidding their maximum bid. In fact, I had no proof that there really were any more offers. And it was strange that after sitting on the market for all this time, someone would start bidding the same week as me. So I reevaluated my projected income and expenses and factored in the added costs of financing, attorneys, etc.

The numbers are important. Realize that commercial properties are generally not as easy to rent as residential properties. Although the average tenant may lease longer, the amount of time that you have a vacancy may also be much longer. If you don't evaluate your income and expenses carefully, you may wind up going bust on a commercial property more easily than a residential one, in my opinion.

What I can tell you, however, is that negotiation of a commercial property is much more businesslike than trying to buy a single family home or duplex. There is much less emotional attachment from the seller and the price is based more acutely on the cash flows, financing and fix up costs.

With all this in mind, my "best and final" was $420,000. I had decided not to move in price.

Guess what happened...

...something interesting. But, I'll wait and tell you that in my next installment to this series.

Steven Boorstein

Author and Landlord

Purchasing Commercial Property (Part 4 Research)

2008-03-25T13:28:00.000-04:00

So, at this point in the story, my quest for real information begins. What could I pay; what's involved in a commercial property contract for sale; how do I finance it; and what's the process to occupy the building?

The first thing I did was a little income and expense calculation. For income, I took the square footage of the building and multiplied it by the average rent per square foot for similar types of office properties in the area. How did I find that, you ask? Three ways. I called my real estate agent and asked her how much office rents were going for in the area. I call my commercial mortgage guy at the bank and asked him. I also looked online real estate like http://www.loopnet.com/ and searched for commercial rentals in the area to see what they were charging per square foot.

The range in my area turned out to be between $12 and $18 per square foot. A very wide range and it depended on the age of the building, what it included (utilities, CAM charges, etc.) I settled on low balling it a little and figured on $14 per square foot.

For expenses I looked at vacancy, taxes, insurance, owner paid utilities, common area maintenance inside and outside (cleaning service and professional landscaping), licenses, potential repairs, reserves for capital improvements.

Subtracting the expected gross income from the estimated expenses gave me the cash flow that would be left over to pay the mortgage. I called my mortgage guy at the bank to find out what the commercial rates and terms were and then arrived at the final price I felt that I could comfortably pay for the property. Some of the big differences that you may find with a commercial loan is that they usually require a personal income statement and balance sheet. Even if you didn't have to do one, the process itself provides you personally with a wealth of information and I highly recommend it (even if you only do it for yourself).

Commercial loan terms are usually 20 or 25 years instead of the 30 years you find in residential property purchases. The interest rate is also different. Not necessarily higher, but often it is fixed for say on to five years, and then is reevaluated/renegotiated at that point in time. Also, the amount financed by the bank is usually only 70-75% of the purchase price.

Of course, I'm not covering the financing in great detail because it varies. But, if you are considering buying a commercial property, I would suggest you call a few local banks and talk with them about the terms. You need to know the specifics before you begin to negotiate the building!

In the next posts we'll move forward and discuss the negotiation, contracts, and what needed to be done with the governmental powers that be in order to purchase and occupy the property.

Steven A. Boorstein

Author & Landlord

review: ProFundRealEstate.com

2008-03-13T10:34:00.000-04:00

HOW TO BUY FORECLOSURES. A topic that used to be reserved mainly for conversations amongst other real estate investors. But of course, with the recent mortgage debacle and economic downturn, "everything you have ever wanted to know about foreclosures" has been a daily part of media coverage. So, when I was contacted to do a sponsored review on ProFundRealEstate.com, I though it might serve some readers well to give my initial impression of the site. It appears to be run by two real estate agents and offers access to Point Loma real estate, and real estate listings in San Diego , as well as, various other areas throughout California.

That in itself isn't all that interesting, but a good portion of their site is dedicated to foreclosures. They've hooked up with a company called ForeclosurePoint to provide access, according to the website, to free lists of San Diego foreclosures. Clicking on that link shows that you will also have access to foreclosure information for many other counties throughout California, too.

The site's layout is easy to navigate and informative. Although I don't own properties in California, if I did, their section: Monthly Market Trends would be interesting to follow. Overall, I'm a proponent of real estate agent sites that focus on specific niches in the market. Too many sites are generic and provide little or no benefit over industry sites like Realtor.com. This site, however, looks like it does cater to investors interested in the foreclosure market. So, if you are interested in this area, you might want to check the site out for yourself.

Purchasing Commercial Property (Part 3 Initial Evaluation)

2008-03-04T09:00:00.000-05:00

My agent emailed me over the listing information on the new prospective commercial building. It seemed to fit most of the criteria that I would want to see in a commercial property, at least from my general lack of experience with this type of real estate:

It was large enough to hold multiple units (4 or 5 units currently).

It had good visibility and location with regard to traffic and signage.

The building looked like it was relatively new-- built within the past 20 years. (Although this may not seem new to many of you, I live in an area where many if not most of the existing buildings are often 50 to 100+ years old.

What initially caught my eye was that the property had been on the market for about nine months. I was also able to find out from my agent that the initial price had been over $50K higher than it was currently being listed. This, of course, started to get me excited.

Next I checked the tax records. Now, one of the beautiful things available in the great State of New Jersey is the availability of online tax records. Type in an address and BAM! You have the current owner. In many cases you also have the price they paid, the assessed value and other valuable information. Well, what did I see with this property? BANK FORECLOSURE! Yes, the property was taken back by the bank over nine months prior and this REO still had not sold.

My agent made an appointment for us to see the property which, of course, was vacant. Driving up, I noticed right away that the building had a major lack of curb appeal and almost screamed "abandoned eyesore!" There were also a bunch of issues that I was able to identify on the first walk through. Namely, a leaky roof, damaged siding, rotting wood, previous interior leaks, well and septic system and a few other potential problems. It also appeared that at least part of the property existed much longer than other parts of the building. So, I although I may have been generally right that the age of the building wasn't all that old, some of it was probably much older. Unfortunately, the electric and gas were not on and the well and septic were winterized/currently nonfunctional. I estimated the necessary repairs at somewhere between $35K to $50K. That would include the rehab necessary to outfit my new office.

So, why did I feel it was worthy of pursuing? Well, there were also a lot of things right with the property. Wiring and pluming looked up to code, it had a fire suppression system and an alarm system which looked like they were in very good shape. The interior, overall was in very good condition. The layout of the building was well planned and the floor plan overall was flexible. Combine that with the factors that I noted in the beginning of the article and I was convinced that it was at least something to continue doing my due diligence on.

Some of the questions that I had to now answer were:

what needed to be done to purchase a commercial property (ie. what was different than buying a residential property which I had lots of experience in doing) and
what kind of cash flow could the property generate to support the expenses, which would directly affect negotiating the deal.

But that's a lot to digest in one segment. These questions and more will be answered on the next episode of "Purchasing Commercial Property".

Steven Boorstein
Landlord & Author

Purchasing Commercial Property (Part 2-Lost & Found)

2008-02-27T23:29:00.000-05:00

Phase I test, Planning Board, zoning district, conforming use, variance, site plan, 200 ft notification, engineering...

This story really begins with a barrage of terms that I never had to deal with when buying residential rental properties. Until one day, when the following occurred to me:

Even though I own rental properties, I am currently renting office space for my business. That just doesn't seem right. Actually, I hate it. Not that the commercial unit I rent is bad. Actually, it's very nice and in a good location. But, I OWN rental properties. I AM the landlord. So, since I own residential rentals, why not own my own office unit? Why give rent money away each month and not build any equity? Yes, as a renter it's nice that maintenance issues are taken care of for me, but it's also frustrating when my rent goes up three times in 18 months. I want the control and benefits of owing my own commercial unit. The same benefits I get by owning my own home or my other rentals.

Well that may not have been my exact thoughts, but you get the idea. So, I started my search about two years ago. I wasn't in a big rush. Every once in awhile there was a single unit commercial property that peaked my interest and I'd go see it. Unfortunately, I just couldn't get the numbers to work on single units. That lead me to migrate to looking for a multi-unit professional office building. Now, I'm not talking about a huge commercial building with elevators and a lobby. I was hoping for just a small strip of four to five offices.

Finally, I found one that might work. It was a historic building that was mixed use (residential apartments and a commercial unit) in my town. The commercial part of the building had been vacant for years and it was a diamond in the rough. Lots of potential, but lots of work. I started to negotiate it and after several months of going back and forth... the deal fell through. Hey, this is real life-- it happens. I just couldn't provide the sellers with what they wanted and get what I needed, too. (As of the time I am writing this post, that property is in pre-foreclosure-- so they probably should have taken the deal I was offering, which had been more than fair! Unfortunately, they were simply "stuck" on a certain sales price even though the market had moved away from them-- apparently, to their own detriment.)

A couple of months later, I found another building. Fortunately, this one might work even better! With my negotiating skills still sharpened from the last deal that fell through, and feeling a little pumped based on my initial projections, I contacted my real estate agent to get information about the listing. This is where the fun part began. Looking at properties, evaluating them and negotiating them is often a lot of fun. In fact, it's usually the most fun. After that, it's much more business than pleasure. So, it's still a little while until the frustrating aspects of my story start to set in...

Remember, I'm writing this story before the final outcome... so if you are reading these posts as I publish them, you're getting closer and closer to knowing what's happening in real time. Learning with me and finding out the outcome of the deal almost "live" as it occurs. Any comments or suggestions? Feel free to post them using the comments link after this article, or email me using one of the links on this page.

But, I digress. And it's getting late. So, in the next story of this series, I'll tell you what I was able to uncover with just three pieces of information:

The MLS Listing

Online tax records

A tour of the property.

-Steve Boorstein, Author & Landlord

mlsloanbroker.com: review

2008-02-24T23:20:00.000-05:00

From time to time, I am asked to do a sponsored review of a website, product or service. Although I turn most of these down, every once in awhile one request catches my attention and is worth writing about. The caveat to my agreement in doing a sponsored post is that I limit the post to information that I am given to review AND that I get to write my true opinion-- positive, negative or neutral. (Either I get to be ethical and tell readers my true opinion or I don't do the review!)

Last week I was asked to do a review for www.mlsloanbroker.com, run by Loan Officer Larry Martinez. He's is a mortgage/refinance loan specialist that helps clients who are looking, for example, for a real estate loan in California (eg. San Francisco mortgage , Marin County mortgage, etc.)

Although I generally don't use mortgage specialists or brokers because they often charge high fees and have hidden costs of which most consumers are unaware, the first thing that impressed me about www.mlsloanbroker.com was that they addressed this concern upfront. In fact, they not only discuss what their fees are (which seem very reasonable to me), but they also appear to be very conscious of keeping the fees low and also make them due at the close of escrow-- not upfront (which is the way that many loan brokers operate). How much are their fees? Although you would want to confirm this directly with the company, from what I could see at their site, there was a processing fee of $500 or less and a credit check fee of $15. In most instances-- that seems to be it.

Another thing that impressed me with the site is the amount of information available regarding the loan process. For example, there is a section on appraisals, ways to save on homeowners insurance, a primer on title insurance and pmi, credit, bankruptcy, kinds of loans and important considerations when refinancing. The site also discusses down payments, the foreclosure process, the loan process and has a glossary of real estate terms. It even has a few pretty good handy loan calculators. Larry Martinez looks like he has put some thought into his site and provides a wealth of information about mortgages and the loan process at consumers' fingertips.

Although I have never used www.mlsloanbroker.com (and don't own real estate in California), I might well consider giving them a shot if the situation ever arose. The site strikes me as upfront, honest and genuinely helpful. So, if you are searching for a Bay area mortgage loan specialist or San Francisco refinance professional, you may want to visit www.mlsloanbroker.com and see what they have to offer.

As with anything you do in your real estate business, educating yourself on the process and understanding your options is paramount. I generally always recommend that you periodically "shop" quotes between different vendors and always try to get quotes in writing.

Best regards,
Steven Boorstein

Purchasing Commercial Property (Part 1-Case Study)

2008-02-19T19:42:00.000-05:00

I am in the process of trying to purchase my first commercial investment property. Now, for the record, thus far I have only owned single and multi-family residential properties. Wow! What a difference in the process, compared to buying a residential property! Even though I consider myself a very experienced landlord in residential real estate, the process of buying a commercial building has been baffeling, confusing, frustrating-- and, nevertheless, interesting. The outcome of this process will probably determine if I ever do this again.

Hopefully, you find that the Landlord Business Insider gives you valuable information on "how to buy properties smarter and manage them better!" Keeping with that mission, I think that one of the "serial" features that I will post on this blog is a chronicle of my experience with this commercial project. Commercial property investing is not only different in many aspects from a residential investment property, it is also a more complex process that requires some different players and skills. However, there are also skills that are common to both residential and commercial property purchases and management that I will discuss.

Whether or not you decided to go the commercial route, you should hopefully find the experiences that I will relate in these forthcoming "Purchasing Your First Commercial Property" posts to be good lessons which can help you build a better overall landlording and rental property business (whatever type of property you decide to specialize in). Although the posts may not be consitent (due to the fact that I am writing them as the process moves forward), by the end of this series I will have taken you from A to Z of the processs-- as it actually happened to a real person (me)-- on a real property(commercial building) -- in detail(humor and pain included).

As I post, please feel free to ask questions and post comments. The more interactive this blog becomes, the better a learning experience for all!

Best regards,
Steven A. Boorstein
Landlord & Author
www.LandlordBusinessInsider.com
www.ManageRentalProperty.com
www.HowToBuyRentalProperty.com

Video: Why you might want to inspect your units - part 2

2008-02-06T16:54:00.000-05:00

Okay, so maybe the video in the part 1 of this post was a little on the humorous side. Something bad, but not insurmountable. Well, if you want to really know why you should do regular inspections... and why we collect security deposits--- you've gotta watch this one (just don't do it right after you've eaten...):

If these videos have done anything educational, it should be that they have shown you that owning rental properties and being a landlord is a business, not just an investment! And, hopefully you fell like you learn a lot from what we post at LandlordBusinessInsider.com and ManageRentalProperty.com to help you survive and thrive in buying and managing your rental properties.

Steven Boorstein

Video: Why you might want to inspect your units - part 1

2008-01-30T23:05:00.001-05:00

I saw this video and thought readers might enjoy it. It's kind of funny (especially if your not the landlord). If you think about it, the lesson here is that regular property inspections can prevent a mound of trouble (you'll see what I mean when you watch the video!)

Steven Boorstein
Landlord / Rental Property Owner

Four Green Houses or One Red Hotel?

2008-01-30T01:31:00.000-05:00

Yes, even playing Monopoly as a kid, I was enamoured with real estate. I guess many people are, whether they know it or not. That's what made that game so popular over the years.

One of the questions that I get most often from budding rental property owners and newbie landlords is "what's better-- single family homes or multi-family buildings?" Now, just to be clear here, multi family buildings for a new investor generally means two (duplex), three(triplex) or four(fourplex) units. We'll leave the 5+ unit apartment complexes up to investors who are looking to join the commercial property landlording arena.

The simple answer is, it depends. I know, not necessarily what you wanted to hear. In fact, you may be looking for my honest, unabashed opinion... which I WILL be more than happy to give. But, before I chime in and give you my personal opinions, I thought it might be interesting to hear what your fellow landlords think on this matter.

So, I'll follow up on this post in a couple of days. But, in the mean time, if you own rental properties, post a comment using the "COMMENTS" link at the end of this post and let us know what you think... would you rather have four green houses or one red hotel?

-Steven A. Boorstein
Singles or Multi-families - that's the question...