Posted by darrelllc on August 08, 2010 at 18:18:45:
I’m a big fan of the 1 1/4 nap roller myself for painting metal sided homes.
What are you doing to attract tenants/buyers? - Posted by Tony Colella
Posted by Tony Colella on July 22, 2010 at 19:38:33:
I cannot begin a repair lately without hearing Bernd’s voice asking me what am I doing differently do improve a property. You see I so often get caught up in making the repair that I don’t see the chance for greater improvement of the property as a whole.
I believe we will find ourselves in an ever increasing competetion for low income tenants. You Lonnie dealers may face the same concern with your deals as well. If I am wrong, well then we all have nicer looking places.
Over the past few years I have endeavored to make long lasting, durable repairs and upgrades that would stand up to tenants and time. By biting the bullet in the present, I hope(d) to avoid continuing expenses and replacements such as carpets, exterior doors, plumbing etc.
My standard “landlord friendly” upgrade consists of replacing exterior doors with stick built intended, 6 panel metal doors with frame. These run about $85 at a surplus store (although mine is unable to get the builder to make any more since “the economy is bad” despite their standing order for a tractor trailer load). I have had to pay up to $140 which hurts but these doors are a bit better than the surplus ones. These have proven their worth to me time and time again and have withstood beatings that otherwise would have had me replacing mobile home doors several times over.
Lamenant flooring throughout the house is now my standard as is white paint (kilz). I upgrade other smaller items as needed. I trim out the home and have found these upgrades do indeed hold up. The cost for my latest total ugrade will run about $1,500 (material costs only) which to some may seem a lot but with these type of repairs hold up and just not having to replace carpet every tenant or two will quickly make this back.
As was pointed out by Bernd, the exterior of the homes need that little bit of snap as well. I admit to having been somewhat remiss in these duties, although most of my homes don’t need much. A few could use a coat of paint. Several need to be cool sealed. All of them need to be pressure washed to clean up the dust if nothing else.
I have a few additional amenity investments that I am going to try out this year and will report back as to their success or lack thereof.
Although my turnover has historically remained low, I wish to not only keep the good tenants but more importantly, attract more good tenants to homes that do come vacant.
I have always resisted “amenity creap” as it can bankrupt you and create bad habbits. Creating a nice home is one thing but once that home meets the max income for that market, putting more money into it just doesn’t make sense. Most new investors have over improved a home and kicked themselves for it. We must find a happy medium. In my market, I believe I am on the right track but your market may vary. Each locale will dictate different demands. More and more seem to be weather related. Too hot, too cold or just too high an electric bill.
My goal is to keep good tenants comfortable in their homes and atract those looking for such housing. It will cost me a bit more and trust me, anything that costs more hurts a lot more now than ever. But if we can’t compete in the low income housing market we will lose not only ground but land and property. I don’t intend to throw good money after bad but I will go down fighting if that’s what it comes to. For now, we are standing our ground but the efforts are greater and more concerning.
When you drive up to your investment property, ask yourself if that home is welcoming to a good tenant or simply acting as temporary housing for a bad one. That answer alone may dictate your improvement decisions.
Be cautious in how you spend money but spend it if you have to; and if you have to spend it then spend it wisely and on long term improvements.
Tony Colella
Re: What are you doing to attract tenants/buyers? - Posted by Anne_nd
Posted by Anne_nd on August 26, 2010 at 14:31:20:
-lower rental prices
-pressure wash exterior
-paint shutters
-put in new exterior doors
-laminate floors in all rooms except bedrooms
Re: What are you doing to attract tenants/buyers? - Posted by Lin (NC)
Posted by Lin (NC) on July 26, 2010 at 22:28:07:
I’ve seen some great ideas here! I am definitely going to call the tree guys this fall and see what I can get done.
I’ve had a number of Craigslist ads up for painting, handyman services, and flooring installation and the response has been phenomenal. I’m getting a 1200 sf apartment painted for $500. I had 1200 sf of flooring (including 400 sf of laminate) installed for $1000. I working to free up more cash for upgrades right now because labor is so very cheap.
I’m probably going to put up vinyl siding over the old cedar shakes on my apartments once I sell an extra car that’s sitting in my driveway.
Lin
Re: What are you doing to attract tenants/buyers? - Posted by Steve-WA
Posted by Steve-WA on July 23, 2010 at 09:38:26:
I have transitioned to owning and self-managing 12 L/Hs as rentals, and tryng my best to manage the dwindling note portfolio. I have 2 repos on deck, and I am about to the point of just signing them over, due to parks’ unwillingness to “partner” as in the past.
New windows, screens (learned the hard way to use fiberglas screening, NOT the aluminum!!) in old windows, roof sealing, fresh currently-in-fashion exterior paint jobs - pretty standard stuff, but it helps to reduce power bills, and makes the home look better, which shows the renter or prospective renter that their property manager cares for their home.
I expect to do some sheetrocking over paneling before this winter as well - looks brighter, and it insulates fantastically - one renter reports that his sheetrock-over-paneling job reduced his winter power bill $50 to $100 monthly.
Re: What are you doing to attract tenants/buyers? - Posted by Michael(KCMO)
Posted by Michael(KCMO) on July 23, 2010 at 06:26:07:
Tony,
I only have a small portfolio of actual rentals (as opposed to LD’s) but my turn-over has also been historically low.
What I have done is to try to build my reputation as a responsive landlord who takes care of a problem when it arises. In my area that seems to be a big selling point in itself. I can’t tell you how many applicants/lookers I get who, when I ask why they’re moving, respond that it’s only because their landlord isn’t taking care of anything.
Another big reason people are moving is because they can’t afford the utilities on an old, drafty house. So I have made that a focus and selling point also.
This summer I added attic insulation to two of my homes to bring it up to R-60. In another home I replaced all the windows with high-quality new ones (btw, if anyone knows how I can get the federal tax credit for energy upgrades to a rental, not my personal residence, please let me know at mmhllc@msn.com. Thanks)
In addition to the “safe, functional & clean” standard, with an eye toward reducing future problems whenever a present repair is made, I DO allow some “amenity creep”. However, my “amenity creep” repairs are done as a lease renewal bonus. Whenever a lease is nearing completion, I tell the tenants, “You know, your lease renewal is coming up. What upgrade would you like for your home for the coming year? (“assume the sale”) We could X, Y, or possibly Z.”
I figure if I spend $400 to insulate an attic, that’s sure-as-heck a lot less expensive than vacancies, repairs and the hassle of finding another resident. PLUS, I’ve improved and added value to my own property! (and another selling point for when I do need to find another resident)
I can’t take credit for this whole concept. Anyone in the rental business who has not gotten any materials from Jeffrey Taylor, “Mr Landlord”, should do so immediately. They have paid for themselves many times over in reduced vacancies - not to mention saving the headaches of finding another resident.
Random Ramblings,
Michael(KCMO)
Re: What are you doing to attract tenants/buyers? - Posted by Briton (IN)
Posted by Briton (IN) on July 22, 2010 at 23:23:23:
Hey Tony,
I know you rent your units. If you are having a hard time with your current biz model, it may be time to convert to lonnie deals and leased lot. I have an 8 pad park in which I owned and rented all 8 homes. After getting tired of renting, I sold all 8 homes on contract. I am almost a year into this change, and I am loving it, my income on the park is staying about the same (or up a little), however my expenses and headaches have took a nosedive. No more insurance on the homes, no more taxes on the homes, less repair cost, ect. I am having my best year ever on the park.
I made the home payments + lot rent about $50- $100 less per month than rent was, however my net income is up, and my headaches are down. The majority of the money I receive is applied to lot rent and interest, so I am not too concerned about loosing my “home assets” Not to mention, I am sure I will get many of these homes back and start over.
If you need to increase your income while you pay off your parks (or pay your dept down), this may help get you through that time period.
If your looking to spend money one idea may be getting tree work done. Personally I am looking to spend money this year, due to wanting to invest back into my biz while my cash flow is actually great this year. Tree guys, like most people, are starving for work, I have gotten several bids on tree removal, and I think I wound up getting some great deals. After this year, I do not think I will have to do much tree work for several years to come. When a tree is questionable, I am pulling up out now while labor is cheap and the trees only get bigger. Yes, trees are nice, but I have so many of them, that I think selectively taking them out and pruning them now will be a great investment for years to come.
I had a hard time understanding whether you are looking to spend money, or are having a difficult time cash flowing, either way maybe I sparked some thought.
Best wishes, Briton (IN)
Re: What are you doing to attract tenants/buyers? - Posted by shawn sisco
Posted by shawn sisco on July 22, 2010 at 20:43:35:
I read a piece written by Rabbi Daniel Lapin recently
in which he stated that without constant injection of
energy all things devolve into chaos. Examples of the
farmer?s fields if unattended would soon become
overgrown and non-productive, a brand new car that was
parked outside and left for 100 years would turn to a
bit of scrap metal. Relationships and our health were
other examples. Reading this helped me, keeping
expenses low is my goal in managing my MHP, but my goal
really shouldn?t be $0 expense that would result in
decline for my assets.
Tony, you are 100% correct about avoiding needless
amenity creep, but today?s deferred maintenance, and
weather-worn finishes on houses are just present
indicators of future tenant problems ? it is a kind of
death spiral once it has been allow to take hold.
I have a couple of leased16x80?s that are getting to
the point of needing an extensive refurb job (cabinets,
fixtures, wallboard ? these houses have endured a few
too many home improvement projects by their former
owners) in the past I wouldn?t have considered spending
that much on 1995 metal-metal houses; I would have sold
them off as fixer uppers to people wanting to pull to
their land and bought a better ?newer MH to replace it
with. I think this time I?ll try the refurb route; I
can?t buy back an upgrade at a price that makes sense.
These are new challenges to be sure.
Re: What are you doing to attract tenants/buyers? - Posted by Shawn Sisco
Posted by Shawn Sisco on July 23, 2010 at 10:03:00:
I have done a couple of “roof- overs” using 29 gauge ribbed steel sheets 3’ wide pieces over some problematic roofs. In so doing I was able to cut some holes in the old metal roof so as to install additional insulation. Also was able to extend the new roof 1’ from exterior walls to prevent water from running down the side of home when the drip edge overflowed during heavy rains.
Re: What are you doing to attract tenants/buyers? - Posted by Tony Colella
Posted by Tony Colella on July 23, 2010 at 09:21:37:
Michael,
You are using the method I envision. It is not “creap” to add an amenity if it either keeps that good tenant in place (instead of a vacant home) and/or if it is done in conjunction with a rental increase.
In areas of decreased rental income, just keeping rent the same is a gain. Not having homes go vacant is the center point of survival. Most of the landlords in trouble will tell you it is the vacancy and subsequent repairs needed that spiral their business out of control. “Less money coming in, more money going out.” That cannot go on too long before it breaks the investor.
In your example, the $400 improvement is a permanent one made with today’s dollars. In the future such an improvement will continue to save tenant’s money, increase the marketability of the homes (most tenants I talk to also mention the cost of utilities as the reason for moving). That $400 is less than the opportunity cost of one month of vacancy.
Because that repair is permanent and you made it now, you will happily realize years from now, “I couldn’t have done that repair for anywhere close to that price now.” That is the type of improvement I think we all need to keep in mind.
Tony
Re: What are you doing to attract tenants/buyers? - Posted by Tony Colella
Posted by Tony Colella on July 23, 2010 at 09:13:14:
For my state (North Carolina) and my portfolio, the lonnie deal model for my parks is incorrect. Evicting a lonnie deal from your park can be very time consuming and expensive. This was not the case in other states in which I invested and was the reason why I remained then with the Lonnie deal model.
I have found that Lonnie dealing off my homes mostly lead to greater taxes (I was not then using Hyre’s aggressive method because it was not yet invented), and more importantly deferred repairs. Since my state (NC) makes it very difficult to evict people from trailers they own on your land, I have no incentive to do so. The SAFE act is yet another issue entirely, espeically for a small park owner with only a handful of lonnie deals. Compliance to these type of regulations tend to benefit only those doing large numbers of deals. Lastly, a small park full of degrading owner occupant homes is the definition of trailer park in my opinion and they often begin to look it.
I don’t mind the work of repairs and am not looking to spend money. I either wrote my post poorly or you misunderstood. There will always be money spent on rental properties (and Lonnie deals). The intent of my post is to encourage the investment in wise, long term repairs that will hold up to the test of time and make the home more marketable.
My cashflow from the rentals is little changed but I know many others who used to post here who have either lost properties to foreclosure and are in the process of doing so. It is my intent to learn from their experiences and try and prevent such an outcome for my portfolio. We must look forward and prepare.
I believe worse is yet to come for our economy and real estate. In every “worse” there is opportunity. We must not only prepare for opportunity but also keep our current properties afloat. If we cannot make them structurally sound now and aesthically appealing we are behind the 8-ball. My post is an ecouragement to prepare these properties now while we can afford to do so. If the economy, rents/payments and regulations get more difficult then we need to have prepared to weather the storm.
I do not want to receive a mass of homes back during that down turn and not have prepared them. That would imply my income is down and the homes will need massive infusions of cash and work to get them marketable.
Your $50 to $100 discount for “owning the home” will not keep a former tenant (turned lonnie buyer) in that home when they lose jobs or utility costs go through the roof. The $50 per month difference, as we well know, won’t keep these homes repaired. We did the work ourselves and it cost more. Many of the lonnie deal buyers will not have these skills or intentions. If an economic downturn affects these folks they will walk, leaving you the same repairs you would/should have made. That $50 or $100 month of “savings” by owning the home instead of renting it was absorbed by these folks, not set aside for repairs.
It all comes down to timing. If you can withstand the market changes or you can afford to fix these homes when income is down then you need not worry. If you plan to just lonnie deal these repo’s back out as “fixer uppers” you can rest assured the repairs (for the most part) will go undone and your park will begin to resemble the true “trailer park.”
I am all for considering my options and changing my model if necessary. That theme has been the focus of nearly all my posts for some time now, as well as the meeting in Morganton, NC I held not long ago (and no, it was not a seminar or even a pay to attend event).
Have you noticed how the folks who used to sell expensive boot camps during the easy money days no longer post at all or hold such events? Where are they now to help others through these hard times? If their material and methods were still viable why do they not post? If they are facing changes to that model why do they not post to help their customers (if that is all they were)?
I encourage anyone still fighting to post and provide insite on what adaptations they are making to the various models so that we can all learn.
Tony
Re: What are you doing to attract tenants/buyers? - Posted by Michael(KCMO)
Posted by Michael(KCMO) on July 23, 2010 at 06:34:11:
Briton,
Just wanted to back up your statement on tree work.
I had a house a couple years ago that had a !HUGE! elm tree growing at the corner and leaning over the neighbors house. Bids to remove it were $1,500 to $2,000. One guy who gave me a bid in late summer for about $1,500 called me back right before winter and offered to do it for $750. Work was slowing down for the season and he was just trying to keep busy for as long as he could. So I had it done.
Tree work is one of the “upgrades” I want to do to all my properties this year. I figure it’s not going to get any cheaper as the trees get bigger! So my plan is to wait until this fall to call and get some bids. Between the present economy and being the end of the season I’m hoping to get this done pretty cheaply.
All the Best,
Michael(KCMO)
Re: What are you doing to attract tenants/buyers? - Posted by Tony Colella
Posted by Tony Colella on July 23, 2010 at 08:39:39:
I think you will find that more and more MHP owner’s will look at that home from a different perspective, just as you now do.
I too have little time, interest or money to devote to pulling a home out (in my case demolishing and hauling it away) only to spend a large chunk of money to buy another home, move it, set it up and then rehab it myself.
For the price of the move I can probably do most of the interior ugrages I mentioned in my post. Older homes may need more TLC on the inside but certainly less money and headache (not to mention the redtape) and lost time due to a move out and move in.
For the time being I will probably just pressure wash and paint the exteriors. Most of my decks and steps have been rebuilt but not all so they will be on the list in a (lower priority unless they become unsafe). Cool seal is needed as I mentioned and we already replace the exterior doors. In some distant future I hope to vinyl side these homes but for now paint will have to suffice.
I think my motto has always been (but more focused as of late) to do more with what I already have.
Tony
Re: What are you doing to attract tenants/buyers? - Posted by Dr. B. (OH)
Posted by Dr. B. (OH) on July 23, 2010 at 15:41:25:
Shawn, when I did the same “roof-overs” I was afraid to extend the sheets too far for fear of wind catching under them and ripping the roof off. I did extend them 3" and put house gutters down the length.
I might try 6" next time as I have seen a few vinyl/shingle homes with 5" or 6" eves that seem to make all the difference in longevity of these homes.
Steve
Re: What are you doing to attract tenants/buyers? - Posted by Briton (IN)
Posted by Briton (IN) on July 23, 2010 at 11:38:55:
Tony,
Great conversation! Your thoughts on how selling my homes will effect my long term park investment are thought provoking.
I would aggree that I may have to do some of the repairs myself at a later date when/if I repo some homes. And if I do not repair the homes and sell as-is as fixer uppers, I may turn my park into a “trailer park” I am glad you got me thinking. One point I would make is that if I do my job in picking tenants well, they very well may pay off their homes and/or maintain them. If I am successful in accomplishing this task the majority of the time, my tenants will have pride of ownership and my park may actually improve. On the flip side if I sell these homes as is to deadbeats, my park and long term investment will suffer. Obviously my plan is to get good tenants! After 7 years in the biz, i feel like I have gotten decent and picking the right tenants and training them.
Another point I would make is that I may be more likely to keep a tenant if they loose their job, or utility cost go up. If they pay their home off, their cost will decrease. Also if they get the home partly paid off, I can always negotiate a lower payment to help them keep their home. I believe I am helping my customers increase their wealth each month they pay their home down. Whereas with renting the monthly price is the price and if their income goes down and they cant afford it, I loose my tenant every time.
It will be interesting to see how this plays out in the next several years. You do have me thinking about how crappy a job my buyers “handy cousin” may do at “repairing” the homes that I may eventually get back. Or that they may not do many repairs at all!
Personally I intend to increase my posting. I received so much help on this site its unbelievable, and I thank everyone that has/does posts here.
Regards, Briton (IN)
Re: What are you doing to attract tenants/buyers? - Posted by Briton (IN)
Posted by Briton (IN) on July 23, 2010 at 07:17:30:
Michael,
“All of my properties”???
Last I understood, you only had Lonnie deals. Have you obtained some properties??? 
Briton (IN)
Re: What are you doing to attract tenants/buyers? - Posted by TT
Posted by TT on July 23, 2010 at 14:56:34:
I’ve never painted the outside of a home, but I am working on one now that really needs it. There’s one across the street about the same age, and it has a good paint job and looks so much nicer. Mine is the eyesore of the neighborhood which would be completely changed for the better with just a paint job(well, that and hauling off all junk which i am doing now).
What paint do you use on exterior metal siding?
Thanks, I don’t post much but i sure learn alot from those who do!
Tracy
Re: What are you doing to attract tenants/buyers? - Posted by Tony Colella
Posted by Tony Colella on July 23, 2010 at 16:34:12:
Anyone else tried rolled roofing? I know Scott did this some time back and had great luck with it. I don’t know if he did more than the one I am thinking of but it was a home that no matter how he patched it the thing would always leak. Once the rolled roofing was installed the leaks all stopped.
I know there is always a weight concern but this did not seem to present a problem for that home. Just wondered if others have tried this.
I have yet to try the rubber roofing. Anyone tried that?
Tony
Re: What are you doing to attract tenants/buyers? - Posted by Michael(KCMO)
Posted by Michael(KCMO) on July 23, 2010 at 14:40:23:
I currently have 3 rental SFR’s. Still doing LD’s, though!!
Re: What are you doing to attract tenants/buyers? - Posted by Tony Colella
Posted by Tony Colella on July 23, 2010 at 16:30:36:
Hello Tracy,
You remember the lot you referred me to about half a decade back? The one on Aurora Vista? I moved a singlewide there and painted it using just kilz latex (well it said good for exteriors) and even though it was chalky that paint is still there! It needs cleaning of course but it held up.
If I were to do it again I would prep the trailer better and get all the chalk off instead of just wiping it down. I would probably go with the oil based but don’t take my advice, I am by no means a painter (I just put paint on walls).
The oil base is cheaper and being that you are already outside, the odor shouldn’t overwhelm you. I recommend a long extension handle and the largest nap roller you can buy (1 1/4" or so) and you will have no problem getting into the nooks and crannies. Once I switched to the thicker nap roller I did an entire side in less time than it took me to do one end with the 3/8" nap.
Tony