LANDLORD OF THE MONTH
Landlord Since 2004
State: New Jersey
Property Type: Multi Family Dwellings
I am 34 yearís old with a decent full time job, a wife, 2 children and a third child on the way. Technically I have only been a landlord for less than 1 year. The reason why I am saying technically is that because my father, as far as I could remember, always had rental properties and I would assist him in the fixing and collection of rents throughout the years.
It got to a point that I started asking myself, ďIf I am doing this for someone else, why canít I do it for meĒ. At the same time, seeing my family grow, seeing the college tuition down the road, I know that I needed to do something quick.
As such, I started looking for properties and put several bids out, but no success. About a year later, we found this nice 6 family brick building that we put an offer on, and like the others, got out bided. As such, we kept looking and about 2 months later found a nice 2 family home, which we were successful in purchasing. Well about a month into the process of closing on the 2 family home, the 6 family came back on the market and we got a call asking if we were still interested in purchasing. Looked at my wife and said, letís see if the numbers work. Few months later we closed on both properties within a month of each other.
You can say that we jumped in with both our feet. Got to admit that we were both nervous, not sure if and how it would work, but we were both determined that we would make it work.
Well here we are 10 months later, and we are generating a positive cash flow of $1,600.00 a month. And have just put a bid on another 7 family home, which got accepted. You can say that our confidence is starting to build up.
Philosophy of the Working Landlord
In one of the articles that I read, it stated that you should prepare the property as if your mother was going to move in. And that stuck with me, prior to a tenant moving in, I make sure that everything is in working order. What I found is that by doing this, it saves me numerous headaches down the road.
I have also realized that I can not do it all myself, as such I have hired super attendants for each of the buildings. I know that itís an extra expense each month. However, itís also a lot less headaches and the best part is that it leaves me free to spend more time with my family or research other properties.
Many years ago I remember reading a quote from James Watson (Nobel Prize Winner) ďIf youíre the brightest person in the room, youíre in troubleĒ. This quote keeps me humble, keeps my thirst for knowledge alive, and keeps my search for mentors constant.
How I Do It
While trying to find myself as a landlord, I had many questions unanswered. I knew how my dad did it, some things I like, some I did not. I turned to the web for answers; as such I stumbled across the Landlord Protection Agencyís website.
The information found on the LPAís website is very helpful, reading the books recommended, visiting the various links in LPA and using the forms found in the LPA website.
I can say that I am learning what to do, and not do with the help of the LPA.
Itís essential to have a lease and the LPA lease says it all. We put our name on it, change the dates and itís that simple.
Tips on the Landlord / Tenant Relationship
Be fair, be honest, be business smart, ALWAYS maintain a professional relationship and most of all accept the fact that you donít know it all and ask for expert help when necessary.
I found that as long as the tenants know the rules and guidelines ahead of time, itís less painful down the road. As an example, one of my tenant was going to be late with her rent, and the first words out of her mouth were, ďI know that I will owe you the late fee, but Ö.Ē She knew that if the rent was not paid by the 5th that the later payment charge was due, I didnít even have to ask for it.
Managing The Rentals...
I try and fix what ever I can, if I am unsure of how to fix something, I just go to my local hardware store or home depot and ask. They are usually pretty informative.
And I tend to surprise myself, and get things fixed/done. For bigger jobs, I will look to the experts.
As for the day to day management, I have super attendants to take out the garbage, keep the property clean and alert me of any potential problems.
Legal Tips and Words of Wisdom:
Ask Questions - When unsure of something (Donít guess), I found the Q&A Forum in LPA is pretty informative and helpful. For the most part, you have a group of individuals that truly care and point you in the right direction. If you donít want to make a fool of yourself, it gives you the ability to remain anonymous, but still get your questions answered.
Keep your tenants informed Ė I found that as long as I let my tenants know what my rules are, ahead of time and give them time to prepare/adjust for them (Usually 2 -4 weeks), that they are more agreeable. As a result, I avoid the confrontations and the immediate reactions.
Understand peopleís Behavior Ė In reality you are managing people, not so much the property. You have to know how to deal with the various personalities.
Be patient Ė No matter how mad you get as a result of something, do not let them see it. Walk away, cool down and then come back in a professional manner. I found that certain people will try to put you into an awkward situation getting you to do something rash. When you give in, is when the problems begin. If you remain professional at all times and stick to the terms of the lease you will be fine.
Anticipate the questions/behavior Ė For example if you have a building that you are JUST going to start charging late fees, understand that you will get some tenants that will try and not pay, others will come up with creative ways to avoid paying. Ask yourself, if that is going to happen, then what are you going to do. And make sure that you are prepared to do it.
From someone that has only been a landlord a short time, this might seem like a lot, but trust me, in this short period of time I have done ALL the wrong things. That is how I know what NOT to do. Thanks to everyone involved with the LPA website, the authors, the members, the individuals that respond to the Q&A Forum, I was able to improve these inefficiencies. Iím sure that I am just at the tip of the iceberg, but with your support, I know that I will succeed.
The LPA would like to thank Joe for his valuable input and sharing of his experience with us. I know we all will make productive strides forward towards our goals along with Joe if we continue to support eachother with knowledge and enthusiasm. Landlords everywhere have the opportunity to benefit from the lessons and knowledge brought to us by our Landlords of the Month.