The City of Minneapolis, the Minneapolis Police Department’s Community Crime Prevention, and the Minneapolis Housing Inspections department are working together to put on a Rental Property Owners workshop in Minneapolis on Thursday, October 25, 2007.  I have attended these events and found them to be a great resource even if you don’t own property in Minneapolis.

Investment Property owners will learn ways to keep their properties free of drug dealing and other illegal activity.  Other topics presented include:

• Working with the Minneapolis Police Department
• Working with Minneapolis Housing Inspections
• Tenant issues
• Hennepin County Housing Court
• Arbitration as an altermative to Eviction

This event is also a great opportunity to network with other Minneapolis Investment Property owners.  To get a registration form, click here.  The cost is $20 and includes a box lunch.  The details and location for the event are:

Thursday, October 25, 2007
5-9 PM
St. Mary’s Greek Orthodox Church
3450 Irving Ave S
Minneapolis, MN

You must RSVP by Friday, Oct 19 by emailing ccpsafe@ci.minneapolis.mn.us or calling the message line at 612-673-2812.  Plan to attend.

Have you ever been stood up at an apartment showing by a prospective tenant?  If you have been a landlord long enough, the answer is probably yes.  Although you can never entirely prevent no-shows, you can at least minimize when they will happen by using these 5 simple tips:

1. Spent some time screening the prospective tenant over the phone prior to setting up an appointment. This will help you avoid tenants you would not otherwise rent to (because they fall outside of your rental policies) and save yourself a trip.  This should also build some rapport with the person, thereby making them feel more obligated to keep the appointment. 
2. Require all prospects to confirm their appointment with you 1 hour before the scheduled time.  When booking the showing, firmly tell them that you will not be at the apartment if they do not call you to confirm.
3. Schedule multiple showings at the same time.  I often book up to 5 showing at the same time.  If maximizes my chances that my trip will not be wasted.  It also creates subtle competition among the prospective tenants for the apartment.
4. Make sure to always have showings before dark or bring another person with you.  Also, schedule the appointments when it is convenient for you and/or when you are going to be in the area.
5. If you are skeptical that some is going to keep their appointment, call them the money of the appointment and remind them (but still require them to confirm one hour prior).

A few simple tricks can make this necessary part of being a landlord as quick and easy as possible.

It is very common for tenants to need to be out of their old apartment at 5pm on the last day of the month, but they can’t move into their new apartment until 8am the next day.  This can be a stressful time to be without a home and have all your stuff loaded in a moving van overnight.

Many landlords will allow tenants to move their belongings into their new apartment early if possible.  I do this all the time.  Unfortunately, it is common for landlords to forget several key points when they allow their new tenant to do this:

• If your tenant is actually moving in early, make sure to sign an addendum to the lease for the additional days.  You may or may not be collecting rent, but you want something in writing that holds the new tenant to the same requirements they will be under during the rental period.  Evictions can be complicated with no written lease in place.
• If you are allowing them move furniture onto to the property only, have the tenants sign a waiver of responsibility.  You are only responsible for giving them a key, not for the contents of their apartment.  Again, your full lease will have this language.  Also specify in writing that they are not authorized to live there.
• Set a concrete date for their arrival to insure you will have the apartment ready.  You may need to negotiate the opportunity to continue to work on the unit despite the tenant beginning to move in.

Following a few simple rules when allowing a tenant to move in early will make the process easy for both you and the tenant.

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.

I know I am going to get some comments from readers in other parts of the country about this title!  My point is not that anywhere BUT Minnesota is bad.  It is just that I often get the question from new investors that ask:  “I read investment property in [insert any state here] is a great buy, should jump in?”.  My answer is always NO.

Buying and owning investment properties take time and work.  Obviously, how much work is dependent upon how many properties you have, their age and condition, and even the type (single family versus multi-family).  In the end, there is some time and work required to own investment property.  Owning property in another state is probably 10 times more work and I would argue not as great of a buy as you have been told.

• When buying investment property, you should be familiar with the market and even the neighborhood you are buying in.  How familiar are you with that out of state neighborhood?
• You will need to find a Realtor and potentially a new mortgage broker.  Where will you find them?
• How are you going to show the property to potential tenants?
• Who will fix anything that needs repair?
• Who will you call in an emergency at the property?
• Can you get to the property at least quarterly to check on the tenants and condition?

The only answer to owning out of state is to use a management company, but that is not an excuse to simply forget about the property:

• They will typically charge 7-15% of your monthly rent and then charge 1 month of rent to find a new tenant.  Is that factored into your cash flow equation of this “great buy”?
• Even with a management company, you should plan to check on your property at least every quarter to make sure the management company is keeping the property maintained and the tenants are not destroying the place.
• If the property becomes vacant, how do you gauge how hard your management company is working to get your property filled?

Lastly, there are plenty of amazing investment properties for sale in Minnesota.  Whether you want to do a flip, a short term hold, or a long term hold, we have all the “great buys” you would ever need, right here.

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.