Category: Landlord LA

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Communication Lessons for the Landlord Tenant Relationship

Steven Taylor Landlord Tenant Relationship

Whether you are renting out your home, running a small duplex, or are the landlord of a large multi-family investment, one thing remains the same – your property is your business. As with any business, your success is reliant on customers. In this case, your customers just happen to be tenants. If your tenants don’t feel respected, you may lose them, and when you lose tenants, your business can fail.

Communication, respect, and clear expectations can keep tenants happy and in place. This can save you from spending time and energy dealing with a high-rate of tenant turnover. Less turnover means more profits. As a landlord, it is essential that you take time to foster a relationship with tenants that is built on consideration and effective communication.

This clear communication and respect must carry through the entire timeline of the landlord tenant relationship, from application to move-out. It can be difficult to continue to function from this point of view during moments of frustration or conflict. It is vital to consider potential tenants ability to communicate in this way before move in. Will they show you the same respect in return? Adding this question to your mental checklist before accepting a new tenant will make your life as a landlord easier.

I believe that with strong communication and mutual respect, a landlord can choose tenants that will happily stay under their roof for long durations of time. These tips can help you develop healthy landlord tenant relationships and consequently improve your business.

Communicate with Transparency

A landlord tenant relationship must be built on transparency. Both parties must communicate honestly in order to avoid conflict and misunderstandings. You can not expect your tenants to meet your expectations if you have not first made them clear. On the other hand, tenants cannot expect you to take action if they do not make their needs known. Explain your expectations to your tenants from the beginning. Answer any of their questions up front to the best of your ability. By maintaining effective communication, you can properly handle problems as they arise, before they become a major conflict.

Hold up Your End of the Bargain

Regardless of the dynamic, relationships are built on trust. The landlord tenant relationship is no different. If you make a promise, keep your word. If you have a policy in place, follow through. You can’t always control the actions of your tenants, but you can control your own. Be available, be responsive, and communicate. If you expect your tenants to hold up their end of the deal, you must also hold up yours. When you follow through on your responsibilities, you set an example and a standard for your tenants. In moments of conflict, it can be hard to “be the bigger person” – as a landlord, it is your job.

Understand Boundaries

Checking on tenants can be part of a landlord’s responsibility. But while you may have valid reasons or good intentions, a surprise drop-in is not only rude, but often illegal. Most states have laws that require due notice before entering a unit. Regardless of the regulations, a landlord should understand basic boundaries. Many matters can be handled by phone or email instead of in person. While you want to have a strong landlord tenant relationship, it should always stay more professional than friendly. When it comes to boundaries, the same rule applies as in most relationships – when you respect them, they will respect you. – Steven Taylor

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What Makes Rental Properties a Good Investment

Rental Properties are good investments for landlords

If you’re looking at investment opportunities, you have a lot of options. You’re probably looking for an investment that will provide you with return as well as security. Real estate is one of the oldest and most popular classes of assets. Most people know that real estate can create passive income and be a great long-term investment when the value increases. But there are many other less commonly considered factors that make rental properties a solid investment.

1. You can shop around for a great deal.

If you’re similar to me, and love a good deal, you will likely enjoy property investing. As a buyer, you can shop around, you can haggle, and you can wait for the right moment to purchase below market value. Not only does finding a property that you can attain below value set you up for a good investment, it is also exciting. Getting a great deal can mean building wealth and building it quickly.

2.  You can purchase rental properties with leverage.

One bonus to buying a rental property is that you can borrow from the bank, or someone else, for the purchase. You therefore increase your potential for return. This principle is often referred to as leverage. Basically, even if you don’t have the entire purchase price for the property at your disposal, you may still be able to buy it. In comparison to stocks or other investments, you can purchase a larger investment for much less cash up front.

3. You can manage your rental property investment personally.

If you like to be in control and have a hands-on approach with your investments, you’ll enjoy running a rental property. As a property owner, you can be directly responsible for the success of your investment. If you are dedicated, and do your research properly, you can personally analyze before buying, ensure good renting conditions, and keep the place running efficiently. There will always be some risk, but unlike other investment types, you can manage everything hands on with less external conflicts and outside opinions. Unless you want those opinions – again, it’s your call.

4. It’s a business that isn’t going anywhere.

While the real estate market in general has its ups and downs, rental properties will always be in demand. People will always need to live somewhere, and there will always be individuals and families that choose to rent instead of own. As the economy changes and mortgages become increasingly difficult to qualify for, the demand for rentals will only increase., so being a landlord is something that will always be needed.

5. Knowledge is power.

In many industries “insider trading” or using secret information to know when to make a deal, is looked down upon or downright illegal. But when you invest in rental properties, you can leverage any insider information to your advantage, and not only is it legal, it’s considered strategy. Do your research, always pay attention to what’s happening in your region, and listen closely to the market. Is better transportation improving in an area? Is there a new school opening up? Businesses shutting down? In the rental property industry, you can take matters into your own hands. Not only can you buy at a good time, you can choose to exit in the face of a market decline – if you know early enough.

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What a First Time Landlord Needs to Know

What a First Time Landlord Needs to Know - Steven Taylor

Being a landlord can be a profitable and rewarding experience. As a landlord, you can build your wealth, utilize second properties you may already own, and run your own business. But, managing a property also requires extensive time and effort. Regardless if you are just leasing an extra property to a friend or family member, or running an entire apartment complex on your own, you need to be prepared. If you’re a first time landlord, take the time to thoroughly research the industry and you will be set up for success.

Here are five tips that first time landlords should keep in mind before renting out a property.

1. Examine your rental price range.

If you’re like most first time landlords, you’ve likely invested substantially into your property. You are also likely going to be dependent on the income the rent generates monthly in order to keep up with the mortgage. While your instinct may be to raise rents to increase your profits, you must first consider the rental market of your region. If you live in a popular area, you may be facing strong competition. As a first time landlord, you’ll want to ensure that your building is enticing to potential renters, while also keeping your expenses in mind.

2. Set clear expectations with tenants.

This may sound obvious, but you must make collecting rent on time a priority. Your property is your business, and without your primary source of revenue – rent – it will fail.  Be clear about your expectations when your tenants move in so there isn’t any confusion on policy. Let your residents know the rental due date, as well as how many days the grace period is for payments that are late. If rent is paid beyond the grace period, it is important to enforce penalty payments. Be sure to screen all potential tenants before they move in. By checking their rental history, asking for references from past landlords, and running their credit, you can help ensure that you rent your units to responsible residents.

3. Prepare yourself for vacancies.

If you have loss-of-income insurance, you may be protected from vacancies during a disaster or other external damage to your property.  But if you have vacant units simply due to low demand or high rents, you’ll be out of luck. Always have money saved that can be used to pay the mortgage on your property during times without tenants. If this is a frequent issue, it may be time to consider lowering the rent.

4. Become a master at record-keeping.

Owning a rental property can be helpful when tax season comes around. But to enjoy the tax benefits that come with being a landlord, you will need to have detailed expense records in order to defend your write-offs. These records will benefit you in other arenas as well – when you know where your money is going, you can accurately assess how your business is doing. Keeping detailed records of the conditions of your property, including damages, alterations, and other changing wear and tear, will help you in the long run. The key is to create good record-keeping systems, whether you track expenses and notes on your own, or use and online tracking program.

5. As a First Time Landlord, get help when you need it.

If you are overwhelmed by the work required to be a landlord, you may want to consider hiring a property manager. A property manager can take many responsibilities off your plate. Many first time landlords hire a property manager as they grow their portfolio and begin renting multiple properties. You should consider the cut to your profits, but also consider the time and energy you will save. If you can afford a property manager, you may be able to focus your time on other streams of income or expanding. – Steven Taylor, Landlord in Los Angeles

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3 Uncertain Conditions that Impact a Landlord and Apartment Building Investments

Landlord Steven Taylor, Taylor Equities Apartment Photo
Landlord Steven Taylor, Taylor Equities Apartment Photo

Multi-family properties can be a great investment. But, if you’re considering being a landlord and investing in an apartment building, it is essential to first evaluate the local market. Some influences are fixed, but multi-family real estate is affected by many changing circumstances. These factors can evolve over time. Responsible investors need to be aware of the changing conditions that can impact their properties. Before buying an apartment building, build and understanding of the uncertain factors that can affect your investments.

Shifting Demographics

A changing population can significantly affect your investment. If you are a landlord, depending on income from renters, an increase or decrease in a population can easily influence your success. Age, income level, race, and gender can all be relevant factors to the profit of your investment. If an area is growing, the demand will grow as well and you are likely to see higher occupancy rates. If a circumstance or trend causes the population to migrate away from your building’s area, your property could sit vacantly. It is notably important to consider the factors that affect an area’s demographics before investing in a property.

Fluctuating Job Markets

The economic conditions of an area play a large role in decision making for multifamily investing. The health of the economy in an area will impact the demand for rental properties. If new jobs are created in a region, people will consequentially move to the area to fill those positions. Many new employees would often rather rent from a convenient and local multi-family property than buy their own home and commute to work.

A downturn in the economy can also affect a landlord’s apartment housing investment. When unemployment rises, homeowners often look for more affordable places to live, and many switch to renting an apartment. When the job market fluctuates, your investment could as well.

Landlord Changes in Access

It may seem obvious, but it is essential to pay close attention to the geographic location of your investment. In an era of climate change, our world is ever-changing, and the physical location is playing a more significant role than ever in housing choices. Renters want to live in a location with good weather, safe conditions, and access to the things they need. Before becoming a landlord and investing, look at the history of properties in the area. Have they been affected by any natural disasters? Do they experience an influx of population during certain seasons? Is the area becoming more or less convenient? Locations all have their strengths and weaknesses that will affect your real estate investment. Don’t skimp on the research. When purchasing a multi-family building, consider all the factors to make sure you are in the right place.

Steven Taylor, Taylor Equities properties

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4 Factors to Keep in Mind When Investing in Apartment Complexes

Apartment Steven Taylor Taylor Equities
Apartment Steven Taylor Taylor Equities

When considering investing in anything, according to Steven Taylor of Taylor Equities , the question you should always ask is: Why is this a good deal? A good deal isn’t just about numbers – a good deal has a compelling story and makes sense. Is the property mismanaged? Stressed? Under foreclosure? The facts should tell a story that explains why the property has value. Developing the instinct to recognize a good deal takes time, but with research, study, and experience you can learn to find the right investments.

Here are four factors to keep in mind when investing in apartment complexes.

1. Cash Flow

The probability of cash flow is a crucial factor to consider. It is important to evaluate how the property will generate cash flow in comparison to other potential properties. To start, ask yourself these questions:

  • What is the strength of the rental market in the area?
  • What type of market you are buying into (For example, C class buildings often have higher rates of tenant turnover. They can also call for more maintenance and repairs.)
  • Financing (How much money are you putting down? What is the interest rate? What type of loan?)

2. Equity

The next thing to consider is if the apartment complex you are purchasing holds equity. If the property doesn’t have equity, can you create it?  Equity in a property can take many forms. A few to look for are:

  • Discounted listing price
  • Foreclosure
  • Upside potential (Fixer-upper)
  • Poor management
  • Opportunity for rezoning

While there are ways to create equity, you are better off buying into it. Be on the lookout for motivated sellers who want out of their property – they are often willing to give up the building’s equity for less.

3. Appreciation

Purchasing in the right location and during the right time will result in profit and appreciation. But, evaluating timing can be tricky. The real estate cycle is often very uncertain. Therefore, if you purchase an apartment complex without the certainty of cash flow or equity, with the goal of short-term appreciation, you will be taking on a risky investment.

Often, aiming for moderate or long-term appreciation will be a safer bet. Study neighborhood and city trends over the long term to choose areas that hold their value and grow at a steady rate.

4. Risk

Those investing in apartment complexes often neglect to consider risk. Regardless of the amount of research you do, risk will always be a factor. Even if you have considered all the factors, you presumptions can be incorrect.

Have a backup plan for risk. If you are buying a building for appreciation, and the apartment complex does not appreciate, can you instead gain positive cash flow through renting units? If you have vacancies in some of your units, will you be able to balance the negative cash flow?  When investing in apartment complexes, you should expect a positive outcome, but always be prepared for your plan to take a turn. Real estate investment in a risky business, and if you want to play the game, you have to be ready to pivot when things go wrong. But, when things go right, investing in apartment complexes can be an exciting and rewarding endeavor. Steven Taylor Taylor Equities