LANDLORD OF THE MONTH
The LPA is proud to award Timothy Spangler the May 2005 Landlord of the Month Award.
Mr. Spangler has recently published his new book, "From the Rat Race to Real Estate". which after reading the book myself, I consider it a MUST READ for anyone starting out in the real estate investing / landlord business. Even if you are an experienced landlord, From the Rat Race to Real Estate is packed with insightful tips and helpful information.
Click on the book to learn more!
Landlord Since 2001
Property Type: Single Family Homes, townhomes and duplexes
How I got started:
I realized that depending on an employer for my family's only source of income and retirement was a risk I had to eliminate. After searching for a safe, stable, and long term investment--I chose real estate for its proven track record over the past 30 years. My first purchase was a newly built three bedroom townhome. Since I've started I've been able to enjoy the rewards of my real estate investing with a monthly positive cash flow and tax benefits.
Philosophy of the Working Landlord
My philosophy is to mind your own business. In order to mind your own business you must gain knowledge that makes you an expert in real estate. Go to real estate seminars and classes. The more research you do the more you will learn. Don't ever stop learning what is new in real estate. If you have a question, search for the answer. If you have a problem, find the solution. Don't ever stop learning because if you do you have closed your mind to new ideas and new opportunities. The LPA not only lets you share your experience with other landlords, but it will also help to answer your questions. Being a member of an investor's organization and connecting with other real estate investors will improve your knowledge and skills. Having this type of support will prove to be invaluable to your future success.
How I Do It
Repairs can quickly drain your operating fund. The best way to keep repair costs down is to keep a maintenance schedule on all appliances, the furnace, air conditioning units, and anything else regularly used by the tenant. You will notice that some tenants take care of amenities while others do not. To combat this problem it is good to have a clause in the lease that states all minor repairs are the responsibility of the tenants. As an alternative to making your tenants responsible for all costs, you can also write the clause in a manner that stipulates the tenant is responsible for the first $75 of a repair. This should not include normal maintenance costs. A repair fee will keep tenants from abusing the property and its appliances.
Follow the lease your tenants signed. If it states late fees will be assessed, assess them. If you waive late fees once, most courts will consider them waived for the life of the lease. Even worse, the tenants will be under the impression that the lease no longer applies to them. If you ever decide to change any part of the lease you and your tenants signed, you should write an addendum to protect your legal rights to enforce the lease. My advice is to act on any lease violations by sending a letter of the violation to the tenant. Don't forget to do a thorough inspection every time you renew a lease. You want to prevent unnecessary damage or repair calls by catching a problem early.
Tips on the Landlord / Tenant Relationship
While your real estate investment property is yours you must nonetheless treat it like a business and not take problems personally. When you let this happen, you makes decisions based on emotions. We all know of some people and maybe ourselves who have made emotional decisions in which we regretted later. If you use knowledge rather than emotions to make decisions you will consistently come up with well developed and concise solutions to your problems. In some circumstances it may even be necessary to call on the services of a professional to deal with certain problems. This may cost you more money now, but it will be worth it in the long run. Remember, anyone dealing with a business expects it to be handled in a professional manner. As an investor you must treat your tenants to the same professional courtesy you would expect to receive. It is possible to be kind and firm when dealing with your tenants. Have integrity, be honest, and most importantly keep your word.
Managing The Rentals...
I have excellent tips on how to manage rentals and tenants in my new book; From the Rat Race to Real Estate.
Legal Tips and Words of Wisdom:
Selecting the right tenant makes the difference between loving real estate and hating it. The most common mistake made by landlords is the failure to do a credit check, it is extremely important to do credit checks on all potential tenants. If they are not paying their current bills, they won't pay the rent either.
The LPA would like to thank Timothy for all his valuable input and sharing of knowledge with us. Landlords everywhere have the opportunity to benefit from the lessons and knowledge brought to us by our Landlords of the Month.