How To Change Tenant Behavior

Some would say that part of property management training that involves dealing with tenants is more art than science, and with that I’d have to agree.

I’ve been actively managing people and managing property for almost 30 years and, knock on wood, probably 99% of the time things go very smoothly.

But that 1% is what really makes you sit down and think hard about what’s going wrong with your management training.

How To Learn From The 1%

Maybe I’m lucky, but when I manage people things go pretty well.  The group is cohesive, there’s not too much drama or politics, and everybody is moving toward the same goal.  Same thing is true about our property management training classes.


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But there’s the occasional employee that no matter what you do simply won’t cooperate.

And the weird thing is, these people tend to be the smartest ones in the bunch.

So what gives?

When we’d get together for the employee review I’d actually ask this question point blank and the employee would tell me exactly what they were doing wrong.

Which would baffle me.  I mean, if you know what you’re supposed to do and if you know what you’re doing wrong, how hard is it to change your behavior?

That’s Your Job Not Mine

The answer I’d always receive from this 1% is that while they know all of this, that it was my job as a manager to change their behavior, not theirs.

Managing tenants isn’t quite the same thing as managing employees, but they’re both people, and like they say, people will be people.

One of the most effective property management training tools I’ve found to change tenant behavior is to set the right expectations.

Tenant-Friendly Leases

Often we’ll be managing a multi-tenant real estate investment with leases already in place that bind the new owner to promises made by the previous owner.  Many times, for whatever reason, these leases are overly tenant-friendly, to the point that the previous landlord has actually given up rights that she’d normally be entitled to.


=> Lease Tips For Tenants

I see this with the rent due date a lot of times.  For example, if by law and by a standard lease contract the rent is due on the 1st and delinquent on the 5th, I’ll see the delinquent date stated as the 10th in the lease.

Clearly this can wreak havoc with your cash flow, particularly in the case of tenants that push the envelope, and the 10th can quickly become the 15th.  If you’ve got a mortgage on the property, odds are your payment is due before the 15th.

Would You Rather Be Paid Now Or On The 15th?

Assuming you can’t amend your existing leases, the easiest way to improve your cash flow and get more of your rents coming in by the first is to send out monthly billing statements at lease a week before the due date of the 1st of the month with a note on the statement that rent is due on the 1st.

If needed, send a follow-up statement on the 5th as a reminder that rent is due on the 1st, or make a follow-up phone call or visit to the tenant, to make sure that the tenant received the statement.

Don’t say anything about the due date of the 1st.

You’d be surprised at how effective this simple property management training tool can be.

We’ve taken over the management of many properties that have leases like this, and usually within two months of using this technique almost all of the tenants are paying by the 1st or even sooner.

Sugar Is Better Than Spice

The nice thing is, we didn’t have to coerce, didn’t have to threaten, and didn’t have to charge late fees.

For the price of a first class stamp, a piece of paper for the statement and some printer ink, we were able to move the majority of our cash receipts up by 10 days.


Jeffrey Roark
Easy Real Estate Training 101
Basic Property Management Training

Tenants Charges – What’s Normal And What’s Not

My recent trip to the mechanic for some work on my car started me thinking about what tenant charges are normal and which are not.

What do tenant charges have to do with fixing a car?

Here’s how my mind started wandering about what’s normal to charge a tenant and what might be a little too creative.

Good News And Bad News

My repair tab at the garage ran about 3X more than what I’d anticipated, although fortunately I’m able to spread the needed repairs out over a couple of.

The good news was that the garage did a few simple repairs for me for free.

=> Property Management Leasing Tips

Granted, what they did do at no charge wasn’t all that expensive, but they could easily have nickel-and-dimed me or factored the freebies into the cost of the repairs I did pay for.

But they didn’t. 

And that’s the whole point in having a list of reliable suppliers, something that good investment property management will teach you how to do.

Creative Tenant Charges

If you’ve invested in any type of investment rental property management courses you already know that it’s always a good idea to do periodic market research on the rents that you’re charging.

A reality check, if you will.

If you don’t do it, your tenants will, and who wants to be caught off guard by a tenant?

Over the weekend I was doing just that, some on-line research, and there was one house for rent listing that caught my eye, offered by a property management company.

=> Real Estate Training And Las Vegas

What got my attention was that in addition to the monthly rent the tenant was required to pay the monthly management fee was well.

I don’t mean the HOA, or utilities, but the monthly fee customarily paid in this market by the owner of the house for rent.

This extra fee to the tenant was kind of disclosed in the ad.  It was called the ‘monthly administrative fee paid to XYZ Management Company’.

Surprising Charges To The Tenant

Now I’m not sure how many prospects that want to rent that house would catch the fee mentioned in the ad, and I’m also sure the fee is going to be itemized in the lease.

The problem is that it’s not a customary fee charged to a tenant – yet – so after the prospects get all excited about the house for rent, have had their rental application approved, and sit down to sign the lease, they’ll see this fee.

Some may question this administrative fee, but most probably will not.  After all, finding a house to rent, just like buying a house, has a lot of emotion attached to it.

If you’re the owner of this property you might say, “Bravo, I just improved my cash flow by 8% a month!”

True, in the short term.

But when the tenant discovers they’re paying an above-market rent, and trust me they always do, you’ll likely have to go through the time, trouble and expense of finding another tenant to rent your house.

Unusual Tenant Fees With An International Twist

In London the market demand for rentals is extremely strong which allows owner of rental property to charge some pretty unique fees to tenants.

Among them:

• Administration fees
• Deposit administration fees
• Credit reference fees
• Check in fees
• Check out fees
• Lease renewal fees

Apparently tenants are starting to push back but with the amazingly low vacancy rate that London has it remains to be seen how successful the tenant complaints will be.

Tenant And Landlord Beware

If the charges to the tenant are customary in the market, or if there’s enough demand where as an owner of investment real estate you can get away with charging the fees and passing through to the tenant, I say fantastic!

If on the other hand you’re pushing the envelope on tenant charges and doing a little too much thinking outside of the box, a short-term gain of a few dollars a month will likely lead to a higher turnover rate and higher re-leasing costs a year down the road.

Jeffrey Roark

Learn Investment Property Management

Easy Real Estate Marketing

How To Analyze Investment Real Estate

Use Property Management Training To Analyze Real Estate Investments


A good property management training manual will show you how to analyze investment real estate before you actually invest.

=> Property Management Training Tips

Common sense, you might say, but it’s surprising how many real estate investors who are pretty astute when it comes to investment property management overlook this point.

Buyers of real estate for rent will always look at the comparable sales of similar property, what the market rents are in their chosen market area, and what the general condition of the trade area is like for the property they’re thinking about investing in.

Without a doubt these are important criteria to consider.

But solid property management experience shows that it is important to think outside of the box and look at other factors that might not be so obvious, but that could have a huge impact on the success of your investment real estate.


=> How To Manage Rental Property

 

Good Property Management Training And Hidden Investment Selectors

Here are some of the other top items we cover in our property management training book to consider when you’re thinking about investing in a rental property:

Foreclosures
I don’t mean the ones that you see, but rather the ones that aren’t on the market yet.
Ask your self what’s in the pipeline.  What’s the percentage of underwater homes in the market you’re thinking about investing in?

In some markets the pipeline of foreclosed homes that aren’t yet on the market runs close to 20 years.

That’s years, not months.

Interest Rates
If you’re a big fan of leverage and OPM (other people’s money) this is critical for you to think about.

With interest rates as low as they are now you could be sitting pretty if rates start popping up, provided the rate on your loan doesn’t adjust.

Your rental property leveraged with a low rate will be competing with properties financed at higher rates, giving you more discretion in your rents.

Expenses
Thinking that expenses will have a gradual, straight line increase is a rookie mistake to make, and something we cover in our property management training.

If you think interest rates are going to go up, then it’s likely expenses will too.

Tenant Quality
In our property management training program we spend time talking about what property type is best of your individual investing personality.

Make no mistake, the type of property you choose to invest in will attract certain tenant types.  One type isn’t inherently better or worse than another, but make sure that you’re attracting a tenant type you like dealing with.

Even if you outsource your property management responsibilities to a private company, one way or another you will end up dealing with the inherent characteristics of your investment property.

Markets and Neighborhoods
During the housing boom many markets saw new development way out in the fringe areas.

In ‘the boonies’, if you will.

Now prices in the fringe areas are really cheap.  And for good reason.

It’s because housing has become more affordable closer to the employment centers and tenants can now find affordable rents closer to where they work.

Can you blame them?

Jeffrey Roark
Property Management Training Guide
How To Make Real Estate Flyers

Creative Ways To Find Tenants With Good Property Management Training

How To Creatively Lease Space Using Good Property Management Training

A lot of property management training was developed when the markets were strong and space was easy to fill.

How to manage property ‘by the book’ was the name of the game and this is what most property management training focused on.

If you’ve been a subscriber to this property management training newsletter site for any length of time, you know that those good old days are long gone.

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Creative Property Management Training = Finding Tenants

Among the three main commercial real estate categories of office, retail, and industrial, industrial space is often the hardest to fill.

That’s because industrial space is at the bottom of the food chain, so to speak.

The classic industrial tenants covered in property management training depend on a strong economy and are dependent on a solid demand for office and retail businesses for success.  With office and retail vacancies the way they are now, industrial parks suffer even more.

Unusual Tenants In Industrial Space

Some of the recent creative uses for industrial space we’ve seen include:

Churches

Schools

Fitness Trainers

Artists

Food Manufacturers

Sports and Events

Thrift Stores

My recent property management training article on linkage analysis talked about how to understand where the customers for your space are coming from.

=> How To Market Real Estate

Note that all of the above are what I’d call destination locations, in that they don’t require a classic store front or retail location to attract customers.  That’s because the tenant’s customers already know where they’re going.

Friction With Non-Traditional Uses

Keep in mind while reading this article that most municipalities will require special use permits for non-traditional tenants in industrial space, while others might simply reject any creative uses for your empty space.

Why a municipality would prefer to see space sit vacant and lose tax revenue is beyond me, but I’ve seen it happen time and time again.

Some towns and cities may prohibit creative uses all together, so be sure to do your research first before accepting a lease.

Often you’ll see a clash between the planning and zoning department, which might stand firm on the current allowable use for a space and not want to mix cement trucks with cars.

On the other side you might find the economic development department striving to attract small business and entrepreneurs to the town, to stimulate growth and increase tax revenues.  So they’ll welcome landlords and tenants who try to think outside of the box.

Creative Ways To Find Tenants For Industrial Space

In our property management training we go through a step-by-step process of how to identify the most likely tenants for your space, how to market to those tenants with a laser focus, and how to set yourself ahead of the competition.

Here are 5 of the reasons why I think some tenants might be attracted to renting industrial space:

Rents are usually half of what a typical retail location might be

The spaces are large and open, often with high ceiling heights as well

There’s usually some office space already built in, good to use for an admin or sales office while the majority of the floor space is still open

The fact that industrial space is off the beaten path may be attractive

For tenants with a high volume of weekend use, the industrial park won’t be busy

With a little property management training brainstorming you’ll find it’s easy to build on this list.

After that, think about the best ways to market to those tenants and go after them!

Jeffrey Roark

Property Management Training Guide

Real Estate Training