Rental Property Asset Allocation

Saving-MoneyAre you holding the proper rental property asset allocation?

My investment account has finally recovered from 2007.  That’s right.  My investment account has finally surpassed my account balance record set way back in October 2007, over eight years ago.  (It actually passed the mark a few months ago, and I just got around to writing this post.)  It was only just about $50K higher in 2007 that it was back in 2000 or so.  My current 401K, which is nearly as high as my investment account is today, was at $0 in 2003 when I started at my current mega-corp, as I have always converted my previous employer 401Ks to an IRA, and a Roth wen i could afford to pay the tax hit.

If you do not have the proper investment allocation, you could be in for a large surprise in your quest for financial independence.  Being financially independent is not just about having a large amount of money.  It is about multiple income streams and redundant sources of passive income.  And living below your means.  Here are a few insights into what I have done to become financially independent.

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How to Handle Tenant Disputes: Part II

tennis-court-338537_1920In an earlier post, we talked about using the good cop/bad cop method to resolve tenant disputes.  But if you own and manage the property by yourself, that doesn’t really work.  If you fully commit to the split personality, you might be sent to a mental institution.  So if you’re flying solo, you have to take a different approach.

This post is compliments of Amy aka “YETInvesting”.

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How to Handle Tenant Disputes: Part I


This post is compliments of Amy aka “YETInvesting”.

If you’re a new rental property owner/manager, or if you’re just not comfortable handling tenant disputes or confrontations, then you might get panicky just thinking about having to confront tenants about issues that arise.

My boyfriend has this problem.  Apart from his current rental which began just a year ago, he has no prior landlord experience, and watching him learn how to handle issues has reminded me of how terrified I was when I first started.  When I had to handle my first tenant complaint over the phone, I remember my hands shaking because I was so nervous.  I’m an introverted person, so I hate talking to strangers anyway.  But this was going to be even worse: I wasn’t just introducing myself to someone I didn’t know, I was going to be fighting with them over money!  Yikes!  Maybe most people are braver than I am from the get-go, but I felt like I was going to throw up.  Good way to start a phone call, right?

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Getting Rid of a Bad Tenant

Graphiti-PDThis post is compliments of Amy aka “Yetisaurus”.

If you have thought about being a landlord, you have thought about the possibility of getting rid of a bad tenant.  The first two rules of being a landlord are (1) collect all of your rents, ON TIME, and (2) keep your rentals full.  But that’s not the end of the story: it is equally important to get (and keep) good tenants in your rentals.  If you have multiple rental units near each other, such as a duplex, fourplex, or even an apartment building, a bad tenant can spoil the whole bunch.

Tenant screening is critical.  It’s important to run income and credit checks on your prospective tenants, and to meet all of the people who will be living in your rental, and maybe even their pets (photos can be deceiving in terms of size and personality).  But what if someone makes it through your screening process, and turns out to be a bad apple anyway?

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My Renter Bounced a Check

Bounced CheckIf you have been following along, you know that my rent collections are outstanding; this month I had trouble.  My renter bounced a check.  I have not had a truly late payment in several years, other than the one tenants that I inherited when I purchased the building.

I have had a few payments after the first, but always received before the late fee kicked in after the 5th, and have not collected late fees, or even waived them, for rent paid on or after the 6th in a long time.

However, I recently had a check returned to me from a payment that was not honored by the bank.  My renter bounced a check.  Yikes! my mortgage is due and I am short rent.

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How to Provide Rental Property Appliances (No Good Deed Goes Unpunished)

This post is compliments of Amy aka “Yetisaurus”.

PunishedNever underestimate the amount of headaches you can have with rental property appliances.  When my boyfriend moved in with me about a year and a half ago, he decided to rent his place out for some extra rental income.  Because we were combining households, we had no need for his washer and dryer, BBQ, or refrigerator.  He figured that he’d be a nice guy and offer those items to potential renters for their use while they remained renters.

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HOA Rules—Are they Incorporated Into Your Rental Agreement?

This post is compliments of Amy aka “Yetisaurus” who has been an owner and manager of rental property in California since 2003.  She’s an attorney by day and a landlord on nights and weekends.  Her goal is to acquire more property and develop a strong passive income stream so she can retire early (and enjoy it!).

Officer Holding Cell Phone-PDOne of the most important weapons in a landlord’s armory—and one of the most neglected—is the rental agreement.  It sounds simple enough.  All you need is a basic piece of paper that identifies your tenant, identifies the address, and sets forth the monthly amount of rent, the due date, and the amount of the security deposit, right?  Well, that’s a start.

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How can I Vacation as a Landlord?

beach-641548_1280-PDIt’s been a few days (weeks?) since the last post.  All things are going well, September rent is starting to come in already.  I was out of the area in International Falls, MN for a few days, and did not have much of a cell signal.

I was able to keep in contact with my tenants, although no major issues were encountered.  As I begin the mental (and financial) transition to living on rental income alone, I have started to document the process and thoughts as I go.

While this blog is important to me, it has a lower priority than my real job, or my rental responsibilities.  It’s even lower than my daily 3-mile walks with my dog and girlfriend.  The dog certainly thinks so.  I do try to keep life in perspective, especially over the past year, as my true few ‘free’ hours are often commandeered by another higher priority task with very little notice.  I am slowly getting into the retirement mindset.

Here is how my recent vacation as a landlord went.

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How to Avoid Bad Tenants

Avoid Bad TenantsWhen you have places for rent, inevitably you will find tenants to avoid.  You need to understand how to avoid bad tenants.  As a matter of fact, if you screen tenants with any sort of consistent basis at all, about 95% of the inquiries will be from poor quality tenants.  There is even a scientific basis to these numbers.

With about 30% of tenants being ones to avoid, it is better to exclude a few good ones, rather than take a chance.  One bad tenant can kill years of rental profits.  Here is a case of a tenant I recently avoided.

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July – August 2015 Rental Cash Flow

100-PDHoly crap has it been busy.  And I thought last month was busy.  It was also expensive, and might have even been a bit negative on the cash flow side of things…  There were a few repairs, and continuation of my remodel on a unit that was vacant.  As always, rents came in on-time, but I added a couple of upcoming vacancies that will be coming due.

When life throws you lemons, you make lemonade.  Rentals are not always fun, but I can assure you they are profitable, if you can manage them right.

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