|Landlord Newsletter February 2007|
The LPA Newsletter, February 2007Dear Fellow Landlord,
One of the great things about being a landlord is that life is never dull. Each day holds new surprises. (That's my positive way of looking at it!) You never know what twists and turns are just ahead... I remind myself of that whenever I receive an unexpected notice to vacate from a tenant. Sometimes I'm overjoyed that someone I don't like wants to leave, but other times, like today, I am challenged to find another great tenant who will be as good. Either way, I learned that moveouts go better when I send the Move Out Instructions Reminder Letter. You may be tired of me pushing this free form but I can't stress enough how important it is, because it works!
In this newsletter:
Please e-mail us if you have any questions or would like to add or share any material / information. If you're in cold weather like I am right now, stay warm! If you're in a nice climate, enjoy. I'll be joining you soon.
Time, Money, and Sweat - What Will Rehabbing That House REALLY Cost You?
by Attorney William Bronchick, Legalwiz.com
It takes more than home improvement know-how to make the big bucks in rehab properties. In order to be a successful investor, you need to know what needs to be repaired - in addition to knowing how to do it. You also need to know how to work with others. Even if you fancy yourself the second coming of Bob Vila, you only have two hands and sometimes it pays to have an extra set (or more). This means not only assessing the cost of labor, but also dealing with insurance and tax issues - not to mention city work permits and other legal hassles.
Estimating Repair CostsEven experienced investors routinely underestimate repair costs, and in doing so, they often sacrifice what would have been healthy profits. Remember, you make your money on a deal when you buy, not when you sell, so before signing your name to the dotted line, be sure to do a thorough room-by-room repairs assessment. Write down everything that needs to be fixed or replaced, and then take your list to Home Depot or Lowe's and total the bill. For labor, anticipate between $0.50 and $1.00 of installation cost per dollar spent on materials - and then add 10 to 20% percent to the total. This way, you are unlikely to underestimate the costs and you will be sure to make an offer that allows you to turn a handsome profit. For older houses, add as much as 30% to 50% to the total, for the "Hoffa" factor (the chance that you will find Jimmy Hoffa buried inside the walls!).
Determining What Should Be Repaired
Many new investors have the urge to spruce up everything and turn their investment property into a place that they would like to call home. Others are would-be slumlords who want to leave all but the bare essentials unfixed. Which approach is more effective? The answer is, it depends on the home's neighborhood.......
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Excuse of the Day
"The electric and gas was turned off for over 2 weeks. The place was uninhabitable. UNINHABITABLE!." - The utilities are in the the tenant's name and are the tenant's responsibility to pay. Even if the utilities are turned off I still want my rent. I think the judge is going to laugh at this one. - Monique W., Toledo, OH
"Today will become one of the 'good old days' for your children. Make it special." - Robert G. Allen
"The man will be most successful who confers the greatest service on the world." - John D. Rockefeller
"Imagine yourself the way you want to be. Then live the day as that person." - John Nuzzolese
"The way you treat yourself sets the standard for others." - Sonya Friedman
"How much did your last tenant problem cost you?" - John Nuzzolese
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Robert Irwin is the bestselling author of more than 50 books on real estate. His career in the real estate industry encompasses more than three decades of experience as real estate broker, landlord, and consultant to lenders, agents, and investors.
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