How did you decide what to charge for rent in your apartments?  Do you rent them quickly or do you show them to dozens of people only to get a tenant once you lower the rent?  Maybe you need to check what the other comparable properties are renting for in your neighborhood.  Here are a few ideas on how to confirm you are maximizing your rental amounts and minimizing the apartment’s time on the market:

• Drive around the neighborhood and call on some “For Rent” signs.  In fact, introduce yourself, tell them which buildings you own, and give them your phone number.  We all need to help each other as landlords.
• Use Craig’s List to quickly see what landlords are offering their apartments for.  Also check out the “seeking housing” section to see what tenants are willing to pay.
• Ask your existing tenants what they think about the rent amount you are planning to charge.

Even if you think you have the rent amount correct, watch how quickly or slowly your apartment rents once you start advertising.  If it is taking a long time to rent or you are experiencing a low call volume, lower the rent sightly.  You may also need to change your rent amount based upon the time of the year, changes in the neighborhood, and the condition of the unit while showing it.

Check your rent amounts at least yearly.  Setting your rent amounts correctly will help you rent your apartments quickly which will help you minimize leaving money on the table.

Landlords, when is the last time you read your standard lease from start to finish?  Should I dare say that some of you have never read it?  Your lease is your contract with tenant.  I assume you spent a considerable amount of time working on your purchase agreement (another contract) for the purchase of that investment property.  Why are you now just coasting along with any old lease?

Regardless of whether you buy your leases at an office supply store or you found one on the Internet and print it off your computer, here are some items to put in your leases and some to take out:

• Require at least 60 days written notice for the tenant to vacate the premises even at the end of the lease.  The 60 days notice should start at the beginning of the next month; so you should get a minimum of 2 months notice.
• Rent is due on the 1st, but late on the 6th.  Most tenants look at that as the rent is due on the 5th.  Make sure they understand it is due on the 1st.
• Consider raising your late fee to a large enough amount to make it painful for the tenant to be late (check if your state has a legal limit).
• Put in a clause like the following:  “All drains, waste pipes, and plumbing are accepted as clear by the tenant at the time of occupancy and any material blocking them after occupancy shall be repaired by the tenant except blockages caused by roots or backups from the streets.”  This should put a end to late night blocked toilet calls.  I do recommend, however, supplying a $6 plunger to alleviate any potential problems!
• Remove any automatic 1 year renewal clauses in your lease.  At first it may seem like a good idea, but this clause can backfire on you when the tenant simply refuses to return your calls and the renewal notification window expires, leaving you bound to re-rent to this tenant.
• Include the following language:  “Payment of rent may be made by personal check until first check is returned unpaid.  Thereafter, tenant will be required to pay using certified funds or cash.”
• Confirm your lease has the following regulation:  “Use of property for business is strictly prohibited”.  What if your tenant opens an auto repair shop in the garage or is using the basement as his warehouse?
• Specify the number of adults, children, pets, and automobiles in the lease and set requirements for notification if the number of any increases.
• If you accept pets, make sure to have a pet deposit and some of it should be non-refundable for additional wear & tear on the house and/or carpet cleaning.  Also include the type and/or size of the pet (I have seen a tenant start with 3 approved dogs (10 pounds each) and then after a year upgrade to three 50 pound dogs.  They were still in compliance with the lease!
• Consider requiring the tenants to make any repairs under a certain dollar amount, depending upon the type of property you are renting.  You may also make them responsible for some or all pest control costs (depending upon the building).
• Do not allow any move-outs during November to March as these are the most difficult times to lease properties.

Here are a few others that you should consider using in the right market and circumstance:

• Specify the apartment or entire building as smoke free.  Have the tenants initial or sign a “smoke free addendum”.  This will save you some repainting and cleaning costs.
• Require the tenants to call a locksmith at their expense if they get locked out or lose their keys.  At least set a comparable price ($50-75) for you to unlock their apartment.
• Have all tenants sign a “Non-violence” and “Drug Free living” document with the threat of eviction if violated.

Making these easy changes will make your leases and your position stronger when working to aleviate problems with tenants.  They should also save you money and frustration in the long run.

(Confirm any of the above changes will work in your state and market.)

Do you just write those expense checks every month for your investment properties without thinking about if the bill is correct or could be lower and/or eliminated? Although you typically can only raise rent every 12 months, it is never the wrong time to work on reducing the expenses of your investment properties.

Here are a few areas to explore:

• If you are paying the heat bill, is there any way to install a new furnace or boiler in the other unit(s) to shift the cost to the tenant? Can you install electric baseboard heat for one or more units and shift the expense to the tenant?
• Does the building only have one water heater (that you pay for), but each unit has its own gas meter for cooking? Can you easily install a water heater for each unit and shift the expenses to the tenant?
• When is the last time you really analyzed your water bill? Call your municipality and find out how many gallons a typical household should use per month. If your building is using more than that, check for dripping faucets and running toilets. A dripping faucet can cost $50 per year and a running toilet can cost $100 per month!
• Older buildings that have been converted into apartments often have electrical systems that were not converted properly. Turn off the main breaker to the common areas and see if any tenants complain that they lost power. You could be paying to run your tenant’s television!
• If you live in a colder climate, like Minnesota, make sure the storm windows and inside windows are closed during the winter to minimize heat loss. Consider adding weather stripping to the doors.
• Making sure your boiler/furnace and water heaters are cleaned and tuned up at least every 2 years will not only save money, but will lengthen their life span.
• Are you paying too much for services to mow the grass or take care of the snow? Can you find a teenager in the neighbor that would love to do it (for less)?
• If you have a property manager, are you getting your money’s worth out of them? Can you take on some of the management for a reduced price?

Roll up your sleeves and look at all your expenses for 60 days. See if you can reduce or eliminated any. It will not only bring you more cash flow, it will make your investment property more appealing to a buyer when you sell it.