Keep Your Tenants Happy With These 5 Tips And Increase Your Profits

In difficult financial periods as an investment property owner you want to try and find the best, most loyal tenants and keep them as long as possible to maximise your profits. The next 5 tips will help you along the way:

Tip 1 ? Meet your tenant

Even though the property was bought as an investment property, you are still in the people business and going out of your way to meet up with potential leasers can lead to longer, more meaningful relationships between you and your tenant which long term could mean lower vacancy rates and more money in your pocket.

Tip 2 ? Give tenants additional benefits

Penalties are really not effective as they punish bad behaviour, another way to get what you want and achieving your goal as a landlord is to reward behaviour you require from your tenant. For example when you sign the lease contract with your new tenant, you clearly want to get them to agree to your terms like having the rental paid on or before the last day of the month or bi monthly inspections. If they agree to your terms you will reimburse a certain amount of their rental back onto their key deposit. They may not reduce their rental payment but over the length of their rental agreement they can build up an extra sum of money that they will get when they vacate your property on your conditions. Another action that could be used to receive a bonus for the tenant is if their rental is paid via debit order. Debit orders are a bit of a bother to set up at the bank but once done they are well worth the effort as you are pretty sure of when your rental will be in your account. Another idea is to give your tenant a small gift when they first move in, for example a dvd player. It may be small but it is a gesture that will cost you a little bit of money at the outset but they will soon realise you are not an ordinary landlord. After they have rented from you for a year you may decide to give them a small television, on the second anniversary something else. This way your tenant remains loyal to you and you get to keep a tenant for a longer period which once again means a lower vacancy rate and cash on your bottom line. The best part of doing this is when they do decide to leave there is an above average chance that they will source the next tenant for you!

Tip 3 ? Furnish your unit

In today's day and age you can purchase just about anything on the internet and used furniture can be bought for next to nothing. By offering your rental unit as furnished or semi furnished you can ask for a higher rental and it is one of the cleverest ways to make more money with your investment property.

Tip 4 ? Upgrade your property

Another great way to increase your rental is to speak to your tenant and find out what would make the environment better to live in. Many times it may be something really small that could make the world of difference, it might for instance be a heater that would not cost the earth but would improve the tenants living conditions. If the item is bigger it may be beneficial to split the cost with the tenant and tenants you have in the future will also benefit from the purchase.

Tip 5 ? Cleaning service

One more way to keep tenants is to offer a weekly cleaning service. There are many advantages of offering this service. Firstly and obviously the benefit to the tenant, secondly and probably the most important benefit, it gives you direct access into your rental property. You are able to keep an eye on your tenant so to speak and are able to pick up if there is any maintenance that needs to be carried out so that it can be done in good time before it turns into a big problem.

Try these 5 tips out in your investment units and you are bound to have happier tenants that are paying more rent over a longer period.

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The Lease And Option Strategy To Make Money With Single-family Houses

The straight or naked real estate option strategy that I am writing about in this article is completely different from the so-called lease-option strategy, which has been hailed by numerous lease-option fanatics as the greatest real estate investment strategy since the introduction of nothing down in the late 1970s. But to me, the standard lease-option strategy that is being taught today is just as flawed as the nothing-down strategy of yesteryear! I say this because almost all of the material that has been written on the subject of lease-options glosses over the potential risks, problems, and pitfalls that can occur when using the typical lease-option scheme being peddled today. In fact, the term lease-option, as it pertains to the standard lease-option strategy being taught today, is a misnomer. What is being taught today is really a sublease-option strategy, which requires investors to lease a property and then sublease it to a so-called tenant-buyer. Thus, the correct term for this strategy is sublease-options and not lease-options.
This is exactly why I give you the lowdown on the standard lease-option strategy that is being taught today. And once I have finished telling you all of the details on the potential risks and problems that lease-options pose, I show you how to properly structure a lease and option transaction so that you can use the low-risk, low-cost lease and option strategy to profit from single family houses. First off, the risk versus reward ratio for sublease-options is way out of whack! In other words, the risk potential that is associated with using sublease-options far outweighs the profit potential! There are just too many things that can go wrong with a sublease-option deal, which a lessee has absolutely no control over. For example, during the sublease-option period, any of the following can and usually do occur:
1. The tenant-buyer fails to make lease payments and must be evicted.
2. The tenant-buyer cannot be evicted from the property because a court rules that he or she has an equitable interest in the property and must be foreclosed on instead of evicted.
3. The tenant-buyer commits a wanton act of malicious vandalism and destroys the leased property.
4. The owner refuses to sell the property after the tenant-buyer has exercised his or her option.
5. The owner refuses to sell the property at the agreed-upon purchase price after the tenant-buyer has exercised his or her option.
6. The property under lease-option is damaged or destroyed by fire, storm, or earthquake, and the tenant-buyer must be relocated.
The standard sublease-option strategy being pushed today involves leasing a property and then subleasing it to a tenant-buyer. This requires the lessee (tenant) to become a lessor (landlord) responsible for managing the tenant-buyer. A sublease is also known as a sandwich lease, which is generally defined as: "A lease agreement in which the lessee (tenant) becomes a lessor (landlord) by subleasing the property under lease to a sublessee (tenant) who takes possession of the property." Under a typical sublease-option arrangement, an investor signs a lease-option agreement with a property owner and then subleases the property to a third party, known as a tenant-buyer, by using a sublease-option agreement. It is sort of the real estate equivalent of a threesome, in which the following three parties are involved in two separate lease-option transactions:
1. Lessor-optionor: The owner of the property being lease-optioned.
2. Lessee-optionee: The party leasing the property from the owner with an option to buy.
3. Tenant-buyer: The party subleasing the property from the lessee-optionee with an option to buy.
The problem with this scenario is that 99 percent of all investors who get involved in a sublease-option transaction do not know diddly squat about being a residential landlord. As a result, whenever they have any type of problem with a tenant-buyer, they are clueless about the correct way to solve it. For example, I recently received an e-mail from a lessee-optionee in Atlanta, Georgia, who wanted to know how to go about evicting a tenant-buyer in Georgia. I told her to log on to the state of Georgia web site and look up the residential tenant and landlord act online.
The point that I am making here is that this person had never even bothered to take the time to acquire the most basic knowledge about being a residential landlord in Georgia, even though residential rental housing is one of the most highly regulated businesses in America. In most cases, this ignorance of basic property management fundamentals turns out to be a recipe for financial disaster.

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Is Your Company Properly Exploiting Equipment Lease Financing In Canada ?

We previously wrote on some of the challenges that Canadian business owners and financial managers face in getting successful lease equipment financing in place for their assets and capital expenditures. The current difficult economic environment makes it more challenging than every for Canadian business owners to get the proper rate, terms, and structure that they deserve.
Success lease equipment financing requires a working knowledge of what the lessor is looking for in a transaction.
Owners can safely assume that the lender is doing significant work on financial statement analysis to satisfy them they are making a proper financing decision with you firm. Included in this analysis is strong emphasis on cash flow history and projections, operating efficiencies of your firm as measure by industry accepted ratios, and balance sheet analysis with respect to the amount of debt your firm is carrying, etc.
In our previous article we suggested that business owners should be aware of some key 'structuring options 'that lenders use when they are contemplating an approval that they are not 100% comfortable with. These options, previously discussed were:
- Utilizing higher rates to compensate for risk
- Use of Security Deposits
- Use of advance payments
- Structuring higher payments in the earlier years of the lease
- Shortening the lease term to offset long term risk
Business owners should be aware of some additional enhancements that can further a financing approval when your firm might not fully qualify for your desired amount of financing and overall structure.
Let's looks at some of those additional enhancements that compliment the 5 areas we have noted above.
Business owners who are not familiar with some of these financial nuances should employ the use of a trusted leasing advisor with credible experience, thereby significantly increasing their chances of getting a lease financing approved.
Business owners might not always be comfortable with providing a Personal Guarantee on the transaction; however personal guarantees are a clear fact of life in the Canadian business financing environment. The logic of the lender, in this case your equipment lessor, is that you are more motivated to make those payments if you are personally obligated in the matter also. Naturally companies incorporate to avoid personal liability but business owners are often called upon by lenders, lessor, etc to provide a guarantee. It goes without saying that the lender will also want to validate the quality of your personal guarantee.
In many cases you as a borrower, or the lender might request, additional collateral on the transaction. This would be collateral that is currently unencumbered, but in effect shores up the lessors overall position, allowing your transaction to be approved. In many cases you will be required to provide some form of documentation (usually an appraisal) of the additional asst.
In some circumstances an effective additional collateral might be credit life insurance on the transaction - in a smaller of mediums sized Canadian firm the lender / lessor may rely on that insurance in the event something happens to the owner, that something being ' death ' of course!
Not all Canadian business owners know that in some cases the manufacturer that you may be purchasing and financing the equipment through is in some cases agreeable to providing a limited or partial guarantee on your transaction. They are making a sale, generate profits from the sale to your firm, and may be able to remarket the asset if the lessor requests assistance in this area.
Finally, in some cases your lessor may request a letter of credit or Certificate of Cash deposit as additional collateral. In the authors experience this is rare, as your firm traditionally would note want to encumber cash in such a manner.
So what's our bottom line? It is simply that lease financing can be a challenge, but if you work with a lessor to offer up and co operate on some manner of structuring, as outlined above, then your chances of successfully getting a lease financing approval increase immensely!

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