Save Time, Make Money
The equation is simple: Saving time = making money. So, save time, make money.
During the early part of my career, I had a full time job as well as doing deals. Instead of trying to fit leasing into my schedule as well, I would have my leasing done by my contractor, Alex. He’s a great guy, a reliable person, and he had no problem opening a few doors for me. After I booked the appointment and soft sold them, he would walk them through the property, tell them the pertinent info, and I would ultimately close them on the phone afterwards. That worked out GREAT during those times. Another great tip would be to utilize a college student or young professional who lives in the area of the places you’re trying to rent. Give them a few hundred dollars instead of a full months’ rent for booking leases. That can make a lot of sense for their pocket book as well as getting your deals done. There are also programs that allow you to let people in through a lockbox system. I don’t like using these for two different reasons. 1. Because it opens your property without you being there to someone who may be destructive. 2. Even more important, you need to sell your property. You love your property, so these people have to have some kind of physical contact with you or your person showing the property. I don’t recommend using these products.
Long story short, I saved a ton of time by getting my showings done by others and I made a ton of money as a result.
Another question I get CONSTANTLY is how to figure out your maintenance and vacancy costs.
Here’s how we determine how much we’ll spend on vacancies and maintenance.
Vacancy: we take a 5% vacancy across our portfolio. The way we get that is that it’s a good number in Pittsburgh across multiunit buildings. However, we do a lot of single family and small multi unit houses in developed or older neighborhoods. So those 5% vacancy rates are oftentimes used in big multifamily assets which are much easier to manage. These larger buildings are also much easier to lease and are much easier to maintain a small vacancy number. You may experience a higher vacancy rate if you’re managing the types of units we are: single family and small multifamily.
For maintenance and repairs we assume $50 a month per unit, but we’re managing a lot of big houses and we’re also managing efficiency apartments and one bedrooms. That $50 is an average that we found across our whole portfolio over the years. If you’re managing a smaller portfolio that’s comprised of mainly 5 bedroom houses that’re 100 years old that have a lot of deferred maintenance, your maintenance and repair number can go up. If you’re managing a larger building that is very well maintained and has multiple units, your maintenance and repairs will go down. Look at your portfolio and keep a running tab of how much you’re spending each month and then the determine the average. When you buy an old house with an old roof or old furnace, you’ll know what the maintenance number is because you’ve averaged out other expenses on past properties.