Desk of William C. Moore
President of Landlord.com and Fellow Landlord (Over
With the current state of the
U.S. economy and the challenges we as landlords are
facing everyday within our industry, we all may be
often asking ourselves, "What's the point?"
I'd like to share a little personal insight about landlording and try to put things in perspective
during these challenging times.
why are you doing all this? Landlording, I mean.
Or, maybe, you just think you are doing it.
Being a landlord will
take some time. If you are well organized, you will
already have created a time budget, which might be a
couple of hours per day, or per week, already
scheduled in your day planner. If you are not very
well organized, you are totally reactive,
ricocheting from crisis to crisis as each arises,
with no idea how much time you spend. Either way
you are spending your time on myriad tasks that seem
to go with the territory. But why you are doing it
may not have occupied a moment of your thoughts, and
it should. No doubt
you are doing this to make money. Do the things
that will make you money before you even think about
doing the things that probably will not. Let
discuss some of the things that might make you
money, and the ones that will not and see how the use
of time can be optimized, no matter how little or
much you spend.
Brian Hilliard has an
excellent piece at Realty Times, which you
here. It is geared to mortgage and real estate
brokers and agents, but the idea applies to all
enterprises, and certainly to landlords. He phrases
it differently, but in essence, we may conclude that
there are three kinds of things you can do. They
are, in increasing level of priority:
Things that will
make you sink or lose money
Things that will
help you tread water and keep the money you have
Things that will
help you swim to the finish line and make more
Mr. Hilliard refers to
his philosophy as revenue centric, though I think
profit centric would be a better term. Revenue
can be costly, as many DotCom executives from the
early eighties can attest.
You can while away
many hours losing money. These make you sink
tasks can include endless email correspondence, chit
chatting with prospective tenants who are grossly
unqualified or have no intention of renting from you
any time during this geological eon, shopping for a
2% discount on light bulbs for the common area. You
can detect these by simply not doing them for a
while and seeing if your income declines.
Treading water is
important. You want to keep the cash flow and
assets you have. This means that you have to
maintain the plumbing, schmooz your existing tenants
from time to time, keep up on rent collections, and
the like. But these will not really increase you
income. You cannot eliminate these, but you should
work hard to reduce the time you spend doing them.
Maybe all of that do-it-yourselfing is not such a
money saver after all. Ask if you cannot farm some
of that work out, and, this is the important part,
using the time you save doing the third kind of
Growth, of the bottom
line, is the most productive type of task you have.
You should spend time figuring ways to increase your
bottom line by decreasing costs. Cost saving
provides a dollar-for-dollar increase in your net.
When is the last time you did a market survey to see
if your rent levels were realistic? If they are too
low, you are not bringing in as much as you should.
If they are too high, you may have vacancies that
can be filled, again increasing your income. Have
you spent any time at the Chamber of Commerce or
some other business group or service club in your
area? There may be opportunities not in the
newspaper or on line to obtain rental properties you
have no idea about, or no idea you could qualify
for. Do you spend any time on continuing education
on things like management techniques, the law, and
public relations? You should, since these can have
a direct impact on your business.
The moral is that you
should not only spend your time landlording, you
should spend time thinking about how you spend your
time landlording, seeking more an more efficient
ways to use it. Then, of course, implement the
results of this thinking.
Related Landlord Resources
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C. Moore, President
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