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Landlord Newsletter - Rent Paid Early

The LPA Newsletter, November 2004

Dear Fellow Landlord,
Depending where you are in the country, you may be seeing signs of change in the real estate market. Many expert investors are gearing up to buy massive amounts of property. Having had the retail sales market peak this past spring, we are observing slower sales and many price reductions. I see changes in the rental market here in NY as well. It's considerably slower with far fewer qualified tenants looking to move. So, if you have rentals available, be strong! Do your best to hold out for a qualified tenant.
I hope all of your rentals are running smoothly and I hope you will enjoy the articles we have in store for you in this month's LPA Newsletter.

In this issue of The LPA Newsletter:

  • Our latest "Landlord Special Report", "How do I Get My Tenant to Pay Rent Early?" is also the description page of The LPA's new Essential Landlord Form, the Early Payment Discount Voucher.

  • We also have a SPECIAL REPORT called: 10 Mistakes to Avoid When Analyzing a Deal by David Finkel and provided by our friends at Creative Real Estate Online.

  • And last but not least, the Do's and Don'ts concerning the Lease Rental Agreement

  • Don't forget, you can earn money with your referrals to Our Affiliates self service page is now ready for action. More info later on this page.

    Please e-mail us if you have any questions or would like to add or share any material / information. I hope you find this month's newsletter useful and enjoyable. Have a great month!
    John Nuzzolese


    Once again, if you haven't already checked out Dan Auito's new book,
    Magic Bullets in Real Estate, I think you'll like it!

    "Magic Bullets in Real Estate".

  • We have more books on our Landlord Books page!



    How do I ...

    Get My Tenant to Pay Rent Early?

    By John Nuzzolese

    Getting the rent paid before it’s due date on a regular basis can be a tremendous help to the landlord in a number of ways. I enjoy a certain peace of mind knowing that my monthly expenses are covered when I receive the rent early. It also helps to be on schedule with the many financial obligations we have each month.

    If you use your imagination, you can come up with plenty of ways to encourage earlier rent payments. I have been successful using the "Early Rent Discount" clause in The LPA Lease.

    Since many people do not have their current tenants on The LPA Lease, the need arose to create an "Early Payment Discount Voucher" for those who would like to give the incentive to pay early to their tenants.

    It can be used on a temporary basis for a span of 1 to 12 months or whatever you feel works for you and your property. It was originally suggested as a Holiday reward for good tenants. It can be for any reason you wish. Getting the rent paid early isn’t a bad reason either.

    The discount should be big enough so the tenant will not want to miss out on it, but not so large that it dents your income on the property. I usually discount the rent in the lease by $10.00 if the rent is 5 days early. I make more of a discount on properties I have set the rent appropriately for.

    Many landlords are against giving the tenant an early payment incentive because the rent should be paid on time anyway. I can tell you from experience, the discount doesn’t work all the time for every tenant. Some people will never pay early. It does work for most of my tenants who enjoy great credit ratings and also enjoy saving a few bucks each month. Over the year those discounts add up for the tenant! And that’s what I tell them. Why not give them a good reason to pay you early?

    Check out The LPA's new Essential Landlord Form, the Early Payment Discount Voucher.

    Essential Landlord Forms, Lease Rental Agreement, Eviction Notice, Lease Enforcement Forms

    Printer Friendly Version of this Article


    10 Mistakes to Avoid When Analyzing a Deal

    by David Finkel

    Mistake #1

    They take TOO Long. Good deals don’t wait around for indecisive people. Many people “think a deal to death.” One way to lower your anxiety level with a deal is to move forward provisionally (i.e. with a clause of some sort.)

    Mistake #2

    They trust the seller’s numbers. Even if there are only good intentions, most sellers just aren’t knowledgeable, and they are inherently a bit biased.

    Mistake #3

    They trust appraisals. An appraisal really isn’t meaningful, unless YOU hired the appraiser, and YOU gave the instructions, and YOU are handing the appraiser the check.

    I can influence an appraiser to appraise a “$100,000” house for as little as $80,000 and as high as $120,000 (or more). That’s a 20% variance! That’s a lot to have in a marginal deal. So take any “appraisal” the seller hands you in the spirit that it was intended--as a MARKETING piece!

    Mistake #4

    They do their math in pencil. The next time you catch yourself thinking it’s okay to “fudge” your numbers a little to make the deal cash flow or the rehab payoff, BEWARE! Some investors have a tendency to “play” with the number a little to make them show a marginal deal is better than it really is.

    Mistake #5

    They overestimate market rents. This one happens all the time. The way you know what a house will rent for is to do a market rent survey. The rents listed in the paper may or may not be accurate.

    Mistake #6

    They overestimate “as is” value. So many investors forget that to turn a house in 60 days or less requires the price to be REAL--not pie in the sky. Be conservative in your estimate of value going into the deal. The worst case then is that you make MORE money than you thought you would!

    Mistake #7

    They get bogged down in process. Use a “Layered” Approach: I will be talking about this innovative way to analyze a deal FAST on Real Estate Radio.

    Mistake #8

    They worry about the house on the first layer analysis. On your first pass, you are only concerned about three things:

    1. Why is the seller selling (motivation level)?

    2. Is there any equity?

    3. Would the property cash flow if you held onto it?

    Mistake #9

    They underestimate the time it will take to flip, fix, fill, or sell. I’ve bought a lot of houses from investors who got stuck with holding costs too much for them to handle. Be careful here.

    Mistake #10

    They SKIP analysis until the deal falls apart on it’s own. Wishful thinking isn’t pretty.

    Bonus Mistake #11

    They hide behind analysis when they are AFRAID to act!

    About the author...

    David Finkel is an ex-Olympic level athlete turned real estate millionaire and one of the leading investing experts in the nation. He and his partner, Peter Conti, teach people across the country how to create multiple streams of income buying homes in nice areas with nothing down and minimum risk. Over the past decade, his students have bought and sold over $100 million worth of real estate.

    The Landlord Protection Agency would like to thank David Finkel and

    for supplying us with the informative article above.


    Landlord Do's & Don'ts
    The Lease Agreement

    What The LPA says you should do and what you shouldn't do:

  • DO Sit down with the tenant and go over every important clause in your lease. Emphasize late fees and the various tenant responsibilities.

  • DON'T Don't just let a tenant sign your lease and move in without fully understanding and agreeing with your terms. Most tenants don't even read their lease!


    Rent Excuses...

    Excuse of the Day for 10/31/04:

    "The rent is the least of your problems buddy. My toilet overflowed and there is $&!# all over the place!"

    I said, "Read your lease. You are responsible for all plumbing stoppages. Now what about that rent?" Thanks LPA! - Submitted by Stefan, VA

    Excuse of the Day for 10/30/04:

    "My mother says to go to hell."

    When asked, the mother says "it was that time of the month." I said, "That's right, the rent is overdue and a late fee is also due." - Submitted by Stefan, VA

    Excuse of the Day for 10/22/04:

    "Sorry. I'm focusing on my Chemistry class. If I pass I'll pay you. If I fail, I'll need the money for a winter course."

    WHAT? Pay the rent or you'll be studying in the street! - Submitted by Tommy, NY

    Excuse of the Day for 10/18/04:

    "I thought I'd let you know that I have decided not to pay rent next month. I will turn 50 the second week of October and thought that you might like to give me the month's rent as a birthday gift :o)."

    - RLamer

    Excuse of the Day for 10/16/04:

    "I bought a 1968 Chevy. It was a deal I could NOT pass up. I'll have all the rent together by next month. I promise."

    Oh, well since you promise... NOT! Late fees are adding up. - Submitted by Johnny C., FL

    Excuse of the Day for 10/15/04:

    "The mac machine would only give me $200.00. I will get the rest out tomorrow."

    Of course tomorrow came and they didn't have the money. Eviction has been started. - Submitted by Amy, NJ



    eleanor roosevelt quotes Yogi Berra quotes Thomas Edison quotes Benjamin Franklin success quotes

    "Everyone is ready to win, few are prepared."
    - Jim Garrett , Roanoke Rapids, NC

    "Many of life's failures are people who did not realize how close they were when they gave up."
    - Thomas Edison

    "Creativity is allowing yourself to make mistakes. Art is knowing which ones to keep."
    - Scott Adams

    "You don't just luck into things as much as you'd think you do.You build step by step, whether it's friendship or opportunities."
    - Barbara Bush

    "Yesterday is a canceled check; Tommorrow is a promissary note; Today is the only cash you have- so spend it wisely."
    - Kay Lyons

    "How much did your last tenant problem cost you?"
    - John Nuzzolese


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