Archive for September 16, 2007

5 Golden Rules of Property Management

Owning investment property is an exciting and scary prospect. The success or failure of an investment will depend on the effectiveness of property management. There are many books on this subject but here are five golden rules that I discovered after personally managing 75 rental units at one time.

Rule#1- Organization is a virtue

I love Adobe PDF writer! This program allows me to use my scanner and create an electronic copy in my computer. I scanned all my bills and any important documents in this format. Since I owned property in two states, this allowed me access to a “virtual” file cabinet with my laptop. I can quickly send eviction or late notices from wherever my location. One example was during an eviction the lawyer processing the case needed copies of the lease, the late notices and breakdown of expenses owed to me. Since I scanned every document and use QuickBooks to organize my accounting, I was able to quickly send a package to my Lawyer and he was able to file with no delay. We filed with the court and I was able to gain a judgment against the tenant. But more importantly, I got possession of my property in an expeditious manner. You can purchase Adobe PDF at http://www.adobe.com or download free simple Adobe writer called CutePDF.

Rule#2- Treat every tenant like they have a law degree

I assume that all my tenants know as much about property law as an attorney would know. As a result, all notices are in writing and on the standard forms provided by the non-profit organization the California Association of Realtors. There is an excellent program provided by the California Association of Realtors called WINForms (www.winforms.com). This program has all the property and lease forms provided by the association. This includes lease agreements, lead disclosure, check-in, and even a rental application. If you are a Realtor, the program is included as part of your annual dues. Otherwise the program is only available to attorneys or real estate licensees for a hefty annual price of $499.00. Lastly, any verbal discussions that may have some legal consequences are written down and sent to the tenant. If the subject is too small for a written letter, I then enter a log in my ACT contact program with a date and time stamp of the event.

Rule#3- Take the time to become informed on rental laws

If you follow Rule#2, then it is critical you become knowledgeable on the current rental laws. An example was a recent change to month-to-month termination notification. California law requires the Landlord to give a tenant 60 days notice of termination of month-to-month lease, regardless of the 30 day notice agreed upon in the original lease. Fortunately for the tenant, they still can give the Landlord 30 days notice. This major change became effective the beginning of this year. Sources to keep up to date with rental laws are apartment associations and the web site of the Department of Real Estate or like kind governing board.

Rule#4- Include automatic rental increases

This rule I learned the hard way. I noticed that it was a difficult process to increase rent on my tenants. The tenants didn’t like the increases and depending on the timing of the notice or size they may get upset and leave to find another place to rent. So the effort to increase rent a few dollars would potentially cost me thousands of dollars to update and advertise a vacant unit. What I discovered is that you can include an automatic increase in rent at the beginning of the tenancy. This way the tenant is aware of the increase and can budget accordingly. You as a Landlord still have to provide 30 day written notice of the increase, but at least the tenant is expecting the notice.

Rule#5- Be fair and direct

After dealing with 75 rental units a pattern started to appear regarding payment of rent. Some tenants were excellent and would pay before or on the first of the month. Others would wait for the last hour of the final day before a late charge could be added. And the remaining tenants would always be late and pay the late fee every month. Unforeseen events in a tenant’s life would happen and I would get that call or letter asking for extra time to pay the rent. My response would be a respectful inquiry regarding when payment would be rendered and to remind the tenant that a late fee would be added as described in the lease agreement. I also informed the tenant that unless payment is sent to my office by the 12th, then a 3 day pay rent or quit notice would be served. Honestly if a tenant in late three consecutive months, I would serve a lease termination notice. I never try to sympathize with the tenant about my need to pay the mortgage and all the bills, because most tenants don’t care. They see me as a rich Landlord that has endless pockets of wealth… HA! Of course there are other rules, but that will have to come another day. I enjoy sharing my experiences so if you have a question or story you want to share send me an email at Anthony@InvestBig.com.

Cheers,

Anthony

Advertisements

Comments (5)

Are You Wasting Your Time?

By Courtney Self

Real Estate Broker, Speaker & Author of “7 Strategies for Real Estate Success” 

If you want to be more successful in your business you need to prioritize and devote your time and energy to the tasks that will propel you to the next level in your business!  Everyday you can waste hours on non-productive activities.  Look over the list of common time wasters to see where you might save time in your business.

 Common Time Wasters:

  • Tasks you should have delegated.  Are you doing all your own paperwork, do you still address, label and stamp your mailings?  If yes, stop right now.  You can hire someone else to do it for you saving you time that will be better spent talking with clients.

  • Procrastination.  This wastes mental energy because you’re thinking about the thing you have to do but don’t want to so you will generally fill your time with “busy work” to avoid the unpleasant task.  The best’s ways to avoid procrastination is to just do it.  Plan to do all of your most important which may also be unpleasant talks first then everything else that follows is easy

  • Working on unimportant or unnecessary tasks.  Too often we feel because we start something we have to finish it.  This is not true, if a task is not going to further you end goal then either delegate it or don’t do it.

  • Interruptions – telephone.  Use voicemail; screen your calls, etc.  Don’t let others control your time.  Set 2 times each day to check voicemail and return calls.  For example your voicemail message can say, “Hi, you’ve reached “your name”, thanks for calling, I check voicemail at 10am and 4pm and return all calls shortly thereafter.  Thanks for calling”
  • Interruptions by co-workers and visitors.  This can be one of the biggest time wasters in an office environment.  People stopping by to chat.  Don’t let them start talking, you can politely tell them you have something you need to finish and ask them what they need.  You can also hang a sign on your office door asking not to be disturbed although many time wasters will ignore this; they think the sign applies to everyone but them.  If they ignore your sign, use the first suggestion.
  • Meetings.  Whenever possible communicate via email or phone rather than having a meeting.
  • Managing team members.  Give your team members authority to make decisions.  Give them clearly defined goals and objectives then tell them your trust their judgment.  Evaluate them
  • Checking email and voicemail.  Using email and voicemail correctly can be one of the best tools for effective time management however; you only need to check these 1 or 2 times daily. 
  • Emergencies.  In real estate as with most other businesses you’ll have numerous “Emergencies” throughout your day.  While some truly are emergencies, you’ll find that most of these if left alone for a little while will usually resolve themselves.  If they don’t get resolves within 24 hours then you can respond appropriately. 
  • Unclear communication.  This is one of the reasons I like email so much because you can clearly
  • Inadequate technical knowledge.  Why waste your time trying to learn how to do something that is not vital to your success i.e. learning new software to create flyers, you can hire someone or subcontract to have some else do it in far less time.
  • Unclear objectives and priorities.  If you do not know what your desired goal or end result is will make it difficult to prioritize.
  • Lack of planning.  Spend a few minutes at the end of each day planning for the following day and evaluate if you are on track for your goals.
  • Planning to do too much.  Prioritize the most important task for the day.
  • Stress and fatigue.
  • Inability to say “No”
  • Disorganization.  You can spend hours each week looking for important paperwork or files when you are disorganized. 

Focusing on what is truly important will help you “Save Time and Make More Money” in your real estate business as well as in your personal life!   

Leave a Comment

Take Control of Your Time!


Take Control of Your Time!

By Courtney Self

Real Estate Broker & Author of “The 7 Strategies For Real Estate Success”

Conventional wisdom is not to put all of your eggs in one basket. 80/20 wisdom is to choose a basket carefully, load all your eggs into it, and then watch it like a hawk.” Richard Koch

The Pareto Principal commonly referred to as the 80:20 Rule is based on Vilfredo Pareto’s research. In the early 1900’s, Pareto, an Italian economist, created a mathematical formula describing the unequal distribution of wealth he observed and measured in his country: Pareto observed that roughly 20% of the people controlled or owned 80% of the wealth. Thus, the so named 80/20 rule. This rule can be applied to your business as well as your personal life. For example:

§ 20% of Real Estate Agents do 80% of the business

§ 80% of your problems usually come from 20% of the causes

§ 80% of your business comes from 20% of your customer base

§ 80% of the activities you perform each day are complete time wasters while only 20% should be considered a valuable use of your time.

The key to applying the 80/20 rule and successfully managing your time is to focus on results, not on being busy. Most people spend their days filling their time in a frenzy of activity, only to achieve very little because they are not focused. Use the following tips to focus on what is important an eliminating the rest.

TIP #1 Know How & Where You Spend Your Time Time is the coin of your life. It is the only coin you have, and only you can determine how it will be spent. Be careful lest you let other people spend it for you. Carl Sandberg. Once you become self employed there is no such thing as “free time”. Calculate how much your time is worth. For example, if your goal is to earn $100,000 this year then your time is worth over $50 per hour. So don’t waste that valuable time on 80% non-productive activities. Do not let others waste your time. Categorize your clients and eliminate or reduce the time spent on those who are not serious or who are not ready to make a move right now. Avoid chatting with your office receptionist or other agents at the water cooler. The agents who want to spend 20 minutes chatting with you do not have anything else to keep them busy. Don’t be rude but keep in mind you can literally waste several hours each week if you let other people rule your time. Don’t waste your time on activities that do not need to be done.

Tip #2 Get Organized “Don’t agonize. Organize” Florynce Kennedy. This will greatly increase your efficiency. A disorganized office or desk will cause you to waste time looking for things when you need them. A disorganized mind will waste time as well. Clarify your goals so that you can stay on track. Eliminate clutter both mental and physical. Implement “Time Blocking”.

Tip #3 Prioritize “Things which matter most must never be at the mercy of things that matter least.” Johann Wolfgang von Goethe. Focus on what is truly important and select a few key tasks to complete each day, tasks that will bring you closer to attaining your goals. To facilitate this create a weekly “to do” list as well as a project list for tasks that need to be done over longer periods of time.

Tip #4 Delegate Surround yourself with the best people you can find, delegate authority, and don’t interfere” Ronald Reagan. Just because you can do something does not mean you should be doing it. Utilize the services and the people around you. If you need a flyer for your new listing, don’t spend time creating it yourself, ask your lender or title representatives to do it, they are usually happy to help. Tired of paperwork? Hire a transaction coordinator. EVEN if the person you hire does not do the job as well as you or as fast as you it’s still a better use of your time and money to have them do it. Remember, just because you can do something does not mean you should be doing it.

Tip #5 Invest time Take time every week to evaluate your business as well as the effectiveness of your marketing or business plan. This will help you identify time and money wasting tasks and activities. Also, invest some time aside in education. The more you know about your business the faster you will be able to solve problems that come your way.

Tip #6 Don’t Procrastinate “Procrastination is the art of keeping up with yesterday” Don Marquis. Start the day with the tasks you least want to do and the rest of the day will fall into to place. Try the following technique: touch the papers on your desk only once. Once you touch it you need to file it, throw it away or deal with it.

Tip #7 Plan & Schedule “I get up every morning determined to both change the world and to have one hell of a good time. Sometimes, this makes planning the day difficult.” E.B. White. Planning will help you to avoid wasting time. When you know you have something important to do or somewhere to go you are more cognizant of your time. The same is true for money, when it comes to spending money, if you plan your expenses in advance it will help you to stay on track with your marketing budget, for example. Using a reasonable, daily and weekly “To Do” list will help you focus on what needs to be done each day and week. While having a long-term plan will keep you on track with your goals and objective for your business and personal life.

If you invest a little time now organizing your life you will have better control over your time. In the end you’ll have more time for things you want to do rather than the things you have to do.

Leave a Comment