Landlord.com Newsletter For April, 2011

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From the Desk of William C. Moore
President of Landlord.com and Fellow Landlord (Over 30 years)

Dear Fellow Landlord,

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.

Just 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 me 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 can read 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 money

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 thing. 

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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William C. Moore, President
Landlord.com
 

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