Countdown To Retirement – Financial Check Up 06/2015

Back in January 2015, I created some financial goals as a countdown to retirement.  The goals were pretty aggressive; it’s time to see if I have lived up to my plan.

It is one thing to create a plan, and another to follow through with the plan.  On January 1, I had 551 days until I leave my full time job.  Today, it is closer to 380, with only 230 work days left, or 54 weeks.  That is only 60% work days, as I have some vacation and holidays coming.  And it doesn’t count sick days.  But who is counting…?

As the days draw closer to the last day of full time work, and the last days of getting a steady paycheck, I check my retirement plans very often.  Way more often than needed.  Does a retirement plan need to be checked every hour?  I sometimes think it needs to be checked even more often, especially when the market is soaring.

Here is how I have progressed.

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May – June 2015 Rental Cash Flow

packs-163497_1280-PDGetting your rental cash flow on time is the name of the game.  Mine is almost like a broken record.  Rent is due, rent gets collected.  If you are a landlord, collecting rents on time is what you want.  For a landlord with only one or two properties, getting rents on time should be routine.  Keeping track of 24 properties is a bit more of a challenge.  I have done this for quite some time, and it all has to do with getting great tenants.

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Signs You Might Be a Bona Fide Real Estate Investor

Dream bigIf you have ever contemplated becoming a Real Estate Investor, there are things that you must understand.  Once you cross the line, your life will never be the same.  You will have crossed to the ‘dark’ side of making money.  A 2% savings return will look paltry.  Of course, just getting back your initial investment might also look like a windfall.

Things you take for granted now, will forever be gone.  But you will persevere, for you know that the fruit will be there to harvest at a later date.  Sooner or later, you will be able to pick the fruits of your labor and enjoy them.  And no one will tell you that you have to wait until  you are 62, or 65, or 67 or 70.

Your view on other properties will change.  How much can you buy it for, how much can you sell it for.  A distressed house on your own block becomes an opportunity, not an eye sore.  A friend with money may become a partner, not someone to envy.  A junk toilet sitting in your backyard becomes a trophy, not a piece of junk (not right away anyway…).

When a new large store is being built, you hope it is a home improvement store, not a clothing store.  You look at all the colors of paint on the color wheels, and know that only one or two would you ever buy.  You realize that many of the paint colors should be illegal to sell.

You are a Real Estate Investor!

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How have your views, on anything, changed once you became more involved and in tune with the activity?  Have you ever thought “I will never think or do something like that”, and then a few years later you want to “think like that”?

 

 

 

Simple Appliance Repairs for Landlords (or Homeowners)

Appliance repairWith any issue, if you can do some simple appliance repairs as a landlord, you can save a ton of money.  In my rentals, I find that some appliances are worth fixing, some are not.  Here are a couple of recent simple appliance repairs that I have completed.

I typically buy fairly cheap appliances.  I always buy new, and make sure that they are 100% clean for all new tenants.  Of course, I also expect the tenants that are moving out to keep them clean.

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How to Get Rid Of a Couch For Free

Get Rid Of a Couch As a landlord, especially if you cater to a low-income tenant base, you will no doubt have to get rid of many stuffed chairs, love seats, hide-a-beds, futons, mattresses, box springs and couches.  And more.  If you know how to get rid of a couch for free, it will save you a lot of money.

This posting is somewhat of a companion article to one of my previous articles about how to get rid of a mattress for free.  This couch was left over from when I asked my Section 8 tenant to leave.

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April – May 2015 Rental Cash Flow

packs-163497_1280-PDThe rental cash flow was a solid as ever.  All of the 25 rents were all collected and deposited mostly by the third of the month, again.  It is a rather boring record, but if you have ever been a landlord, you know this is a great achievement.  I did have one rent that arrived on the 5th due to a bill-pay error?, and a $225 partial rent paid for the remaining sum owed on the 8th.  The bill-pay error was more due to forgetfulness, than an error.  These are solid tenants that are moving out to buy a home, so they have plenty of money.

So here are some of the cash flow highlights of the past several weeks…

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Maximizing Revenue from Your Rental Property

Saving-MoneyAre you maximizing revenue from your real estate investments? If you have rental property, there are literally hundreds of ways to make extra money. I often thought if I had 20 properties to take care of that it would be a full-time job for someone, possibly me. In addition to the rental income, at a time I was running a small lawn care company, trying to generate enough money to live on. That mowing, plowing and miscellaneous maintenance also generated capital to kick-start my seed money for real estate investing.  Never underestimate the power of saving money, or the ability of a side gig to create a lot of extra capital.  Every hour you spend making money for yourself, is an hour less you have to work for someone else.

Now that I have my rentals, I always look to save money or generate new revenue streams from my tenants. I am not looking to gouge them, but for ways to leverage my skills and their money.

Here are a few tips that  I have either done, or have thought about doing.  Actually I have implemented all but one of them, although not every one on every tenant.  Most are common and not rocket science, some are not.

If you have ever wanted to quit your full-time job, and wondered how it would be possible with only a few rentals, this could be a way to help with your ticket out of the drudgery of working for a boss.

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Tenant Damage vs. Wear and Tear => Case Study

Broken WindowTenant Damage vs. Wear and Tear or “The case of the Broken Window”

I just had an incident where one of my renters caused damage to another building I own.  I own 20 condominiums in a complex, it is high density housing.  Formerly a Class D neighborhood, which I was able to turn around.

Now that the neighborhood is safe to be outside in, the parents want to keep it that way.  They can bring their small children to the park, and not have to worry about fights or drug deals going on.  It is not to say that kids always behave, but if you keep on top of things, they do not get out of hand.

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Tenant Deposits, How to Reduce Risk

hand-holding-a-grenade-1411373825Xtf-PDTenant deposits are one of your keys to risk mitigation.

If you are like most landlords, you think that the largest risk to being a landlord is getting your rent.  You know that deposits will protect you, and if you are calculating your numbers correctly, you will make a big profit.

Make no mistake, if you think all you need is a deposit to protect you, you will be headed for disaster.

The number one way to protect your income stream from tenant defaults is to get great tenants to begin with. Good tenants will bring in a solid income of at least 3.5x the rent in income. Preferably much more. With the average family income over $50K annually, just getting an average income will probably be well over 3.5x the rent in income.

Income will tell you the tenant’s ability to pay rent.

The second piece of the puzzle is credit score. With a C-grade credit score north of 620, and the average tenant’s credit score being north of 650, it is easy to weed out lower scoring tenants to reduce risk.

Why take the bottom of the barrel tenants in terms of credit score, and increase your risk? These people may be great people, and some will definitely pay rent, but it is a higher risk potential. Mitigate your risk by selecting a tenant who has proven their ability to stand behind their financial commitments.

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Do you have any interesting tenant deposit stories? What is your policy on deposits, or what have you experienced as a tenant?

Declining Tenants that Are Persistent

Decline tenantDeclining tenants is a necessary part of being a landlord.

A tenant recently inquired for one of my rentals.  I always do on-line advertising so most of the inquiries are via email.  If they call directly, I get their email address texted to me, so I can email them my standard response.  As I have posted before, I typically send out a canned response so that prospects can understand what I am looking for in a tenant, and they can also get a better understanding of the layout of the apartment(s).

A link to a video tour is also included, which I have received a lot of unsolicited compliments on.  I just walk around the apartment narrating the video.  Nothing fancy, no high tech camera.  But it works.

Here is how one applicant inquiry went, from a tenant I declined.

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