THE BIG PICTURE
SOURCE YOUR TENANTS CAREFULLY AND TREAT THEM WELL, AND THEY WILL HELP ENSURE YOUR SUCCESS.
Fewer is Better - When Renters StickAround
by Kevin Guz
hen I look back at my first rental property purchase more than 10
United States with real estate investors big and small. It’s not that hard if you do the right things. That first rental property that we bought over 10 years ago is still a won- derful property for us. Believe it or not, we have had three sets of tenants in that property in that time, and the third is still there today. In the two cases where tenants vacated the property, they were very positive exits. They completed their lease obligations. The first was the perfect scenario. The tenants lived with us for several years, saved their money and ultimately went off to buy their own home. The second situation was not as fortunate; they went through some marital diffi- culties and exited the property. But it wasn’t because of the property that they left. It was because of other reasons. The third set of tenants is there today, and they continually tell us they are never leaving, which is fine with us. The point is not to brag but to share the key tactics that can also help you source— and keep—good-quality tenants. 1 THE POWER OF THE YARD SIGN That yard sign is incredibly powerful and incredibly cheap. It’s no more than the cost of running to your local home improvement store, purchasing that red-and-white sign, writing your phone
number on it with a black marker and sticking it in the ground. It’s about as cheap a form of advertis- ing as you can get. And we’ve found it to be incredibly successful. We sourced the first two tenants for that first rental property of ours off the yard sign. And we’ve never used that yard sign again on that property. The point is that you shouldn’t get overwhelmed and think that, “Gosh, in order to source tenants, I have to go through extraordinary efforts and significant investment in newspaper ads or online ads.” Those are all valid and effective, but don’t let them scare you from what it actually takes to staff a property with a good-quality tenant. It can be as simple as the yard sign. 2 THE POWER OF THE NEIGHBORS Our third tenant was actually the neigh- bor who lived two doors down from that first rental property. As we have purchased properties, updated them, put tenants in them and then continued to manage and maintain them successfully, the word gets out. It travels up and down the street over the course of time as people talk. A lot of the times when you buy rental prop- erty, it’s going to be in a rental market or a rental street or a rental block where there are multiple landlords.
years ago, I am amazed at my good fortune. There were plenty of times, as a part- time real estate investor with a full-time career outside of real estate, I tried to talk myself out of that first purchase. And there were others who also tried to talk me out of it. Obviously, I didn’t listen. We made that purchase, and we still hold that property today. We have been purchasing rental properties ever since and have yet to sell a single one. Here I am, more than 10 years later, with a very profitable rental house portfolio. I remember one thing in particular I worried about: “How in the world are you going to get a good tenant?” We read and hear all the horror stories about certain tenants and what they do to properties: damages, leaving in the middle of the night, abusing the properties, not paying rent. “How in the world are you, a first-time, part-time real estate investor ever going to know how to find a great tenant?” FINDING GOOD TENANTS IS NOT HARD I speak from my personal experience, and I am here to tell you it can be done. It is done every day throughout the
58 | think realty magazine | mar :: apr 2016
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