Simple Things You Can Do To Make More Money With Your Rentals With Joel Miller (Ep 496)
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Inspiring interviews with today is top and lord. This is the rental income poking. And now that we're all .

investing in rental property to make money, but my guest on the show today has figured out a lot of little things that are making these properties even more profitable.

then I just one of the share a few things that everyone can do to help make the runners more profitable because after all, are we looking at the bottom lines and we want to uh h how to be a profitable investment. So every little thing that you can do adds up on the .

pad cast today, joe is gonna are all the little things that he does to make properties, make as much money as they possibly can. Joining us on the show today for a repeat appearance is joe Miller from iri, pennsylvania. We will take a quick break to think our sponsors will come right back and and we will talk to joe.

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It's a lot of work to find a really good rental property. And when you actually find that property, you want to make sure you're working with the do that can get that loan closed. The lenders that I recommend is ji ridge from ridge lending group.

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That's R I D G E lending group dot com N M L S four two zero five six. Joe, you've been on the pad cast times, but for anyone that maybe hasn't heard your previous interviews, let's set off by talking about your portfolio. What is your porfolio look like?

Well, then I bought my first rental in one thousand nine and seventy eight, and IT was A A residential randal, and that's primarily what I have specialized in over the year years. I have had some commercial property, but uh right now uh IT is all residential consisting of uh one, two, three, four unit places in some small apartment complexes that ah you know keep us busy.

Do you still have some of those original properties?

I actually have the first three properties that um I I ever acquired, one in seventy eight, one and seventy nine and one and eighty wow.

That actually brings up a good point. And I think this kind of leads into what we going be talking about today. But how important do you think just letting time go by in in building wealth like just over time, you're get those rent increases and the the properties increasing in values. So exchange a scale of one to ten if someone's gone to build wealth with rental properties, how important is just that time going by?

I'd give IT a time. A time is really important. And you might have heard that said that real estate investing is a really forgiving sort of investment. In other words, if you kind of make a bit of a mistake or something is not uh quite as profitable right at the beginning. When you get into the project given enough time, you're probably still gna make out when you add up all your rents and the amount that you sell IT for concern to what you have in IT.

So time is um is important because IT over time you are typically able to raise the reds and over time there is usually a appreciation that just occurs uh in the um in the property values s some of which can be attributed to purely inflation, which means you not really necessarily getting more buying power out of the appreciation that you have in the property. But um in general though, I think that rental properties will increase in value um at a higher rate in the actual inflation rate. So you're going to gain uh wealth from the the profitability along the way a of the difference between your your rent and your expenses as well as um uh the appreciation in value. And then you are likely to pay less in taxes on your your profit of the the sale on on the thing because it's tax at a lower rate and ordinary income. Other words.

capital gains tax. Yeah, I mean, he really is mind boggling how much it's if you find a property that making one hundred dollars a month today, if you let time go by, who knows in five, ten, fifteen years, that property is probably making you way more than one hundred .

dollars a month. IT is the Normal thing that friends are continually increased as one owns reno property and as supposed to going .

down absolutely, absolutely. Well, let's talk about some actual things that we can control that, that we can do today to make our rental properties more, more profitable. So the first thing I want to ask about is, well, I I think the third maintenance is one of those like sneaky little things that can really kind of creep up and can really, really suck away your your profit. So like when you buy a new property, do you take care of the little things up front so that your property is more profitable for years to come?

Absolutely as glad that you are gay right now that this was the the area you wanted to talk about IT because uh keeping the problem the properties in uh in good shape is um actually not an expense IT. It's it's source of income for a variety reasons. Number one, uh, if you don't let um the maintain names, I get get ahead of you. And by the way, to answer your question, yeah if I were a quite a new property, I I would fix everything on IT as quickly as possible. If if IT has tenants in IT, you might have to wait until those tenant change, you know, before you can do things in inside that particular unit as you know.

But um getting back to where I was saying, uh, you um you don't want to get behind on the different maintenance because if if if repairs are h left on done, then ultimately when he gets to the place where you have to do things because of safety, uh, the issues that have occurred because you haven't kept up with Normal maintenance, then I am willing to say that almost every case here, your outlet at that point is gonna greater than if you are just kept up on things along away. And the other way that I would say that IT makes properties more profitable is that when they are in Better shape, you have the ability to command more rent and get Better tenants who also demand that the things are kept up for them and they're gonna stay. So you're not only gna be able to make more rent, but also, in the long run, spend actually less than you would have 呃， if you get stuck with a big repair bill to do a bunch of stuff all one time because I was put off.

And then the third thing would be that because of you know, income, properties are essentially valued by the amount of income that they make. If you are keeping the place up uh and getting more rent and having less, they can. Cy, you're going to be a little salad for more.

In the end, let's talk about actually picking the right tenant. So but that's probably one of the most important things that you can do as a landward rain.

absolutely, because I I will say that are your success and happiness as an investor in rental real state is dependent directly on tenant selection. And there was you might be really good at finding good deals. You might be good at doing the madness that we were just talking about or doing a we have for a property that um you require and you want to fix up completely. You might be good at all that, but you know what, after you ve got the property and he fixed IT up, if you don't know how to select the right tends for in there, it's gonna a nightmare. But tends selection begins when you get IT in your head that you think there's a possibility you may be want to buy some renal problem yeah all the way back then and IT proceeds um as you make decisions about where you want to have the property, you every decision you make is continually narrowing down the universe of part um possible tenants.

Where are you going to have the property? What kind of um property do you want to have um how are you going to prepare the property for your tenants? And and IT eventually moves into the preparation of the units for the tenants and then the advertising and then the screening that would occur when you actually interface with somebody that responds to your s that's the the whole add thing is kind of in the middle process. But you you are selecting tenants right from the beginning when you just get IT in your head that this is where you want to buy some property and this is a kind of property you want.

that makes a lot of sense. I mean, you really got to a kind of think that the room because if if whatever property you have, it's going tracked a certain person. So I if you have if you have something in your mind that you want to get a certain type attended, if you don't have a property that matches that, it's um you're not going to find that person. So let's talk about your criteria. So like what are you looking for in a good tenant?

I'm old school enough that I in the office here still take calls whenever an apartment is advertised. So when somebody calls, I asked the same questions all the time you know because you want to be fair and and uh you know, give them the same opportunity to to the answer is anybody else? So I have what I affectionate call my god lid of questions that I would ask over the phone before I would agree to even meet the person to show the department.

My objective is to have a few showings as possible and I and I don't have many showings. I typically uh have uh only you know maybe one or two or three showings for any apartment that that becomes available because I have already eliminated so many people by talking to them on the phone. And so that's that's a big time saver is to be able to get skilled at the questions that that you ask uh, before you agree to a showing. So you know surprise whenever you get there and you find out something that is like, oh my god, shh. If I knew this, I wouldn't be even bored.

Yeah and that saves you a lot of time. I mean, you're not doing twenty showings and like and so so give me some questions like what what are a couple of things that you're gonna people?

Why is the gonad is divided into two sections? First section is three questions. And the first question is, how many people do you have? Because I want to make sure that you don't have somebody with in of six, eight people calling about your two bit arming.

And sometimes people legitimately have called the wrong number, and they they are not even calling the ad that they imported about. And they have a bunch of people and they all m so he and realized this was a too Better. I think I marked the wrong phone number.

Know you just want to know, get to that point first that somebody he's not um calling that has too many people for the the actual available unit. And the next question is, do you have any pets? Because in our situation, uh, with very few exceptions, are our properties are rented a no pets.

Let me ask you about about that. That's something that I know different people of different opinions on. Some people look at hats as a revenue source that you are able to charge more rent or maybe get a pet fee or other people don't want pets because the potential damage. So right. So what you're thinking on .

that there are a couple of lines of thinking there. And i'm sure there are people listening that um almost have a their mission that they want to have units available to rent to people that that have pets and so on.

I totally get IT it's part of the philosopher that you have to uh acquire whenever you are deciding to be a landor d you know what is your philosopher? But um there is certainly uh, a possibility of making more revenue by renting the people with pets because it's not a situation that you would rent to somebody that has pets and charged in the same rent as, uh, you would somebody that had no pets. That's that's the thing you you can charge more on a per animal basis or however you want to do IT uh, for the the monthly rents.

So that is a possible revenue stream there. And also you would charge a pet deposit over above the security depot, which is supposed to cover rent. Pet deposit covers um other damage, you know possibly from the animal.

So um you have an opportunity to cover your expenses there from additional rent and the deposit that would be left and used whenever somebody moved out. I think in the big picture, you have to decide in your mind whether you are um going to be ahead on the game or not with your extra rent and and deposit IT. And really, it's hard to decide because it's not going to be the same for a retention.

Some tenants are still in a berna. You know you're going to end up having to replace this or that carpet chewed up door frame or or landscaping or painting or you know whatever that that was just you wouldn't have to do IT if the people didn't have pets and it's going to cost you more money than than if you know they they they they they paid you extra in red is what i'm trying to say. So um on the other hand, there you can have dream tenants where you did make out you charged the more and their deposit covered everything if there was anything and you may you your head so it's a tenant by tenant uh, experience that you will have and eventually you you go arrive at the philosopher I arrived at the philosopher that I was always getting behind. So we eventually started having a no pets policy.

Yeah I mean, it's it's a tough calculation to make because if maybe you make an extra five hundred dollars, bring on a tenant with a pet, but maybe you're good for that year. But then when they move out, if I cost you nine hundred dollars, you're not coming out ahead on that.

right? The other possibility though is that people with cats will stay longer, know because they know how hard IT is to find other places ah that accept pets.

And so you could do you could be making out there a little bit by having less turn over uh but if you are gonna to pet is important to do something other than just say i'm going to charge more rent and i'm going to get a deposit uh nowadays uh, it's typical that you would ask a pet owner to provide documentation of a pets uh uh shots you know and that they've been spared or neuter and that they don't have a bite history um you know IT perhaps that they have their local required license, dog license for example um and uh you you make that part of of the least that they have to provide dad and that goes in the tenants file uh uh they they are also signing other um you know agreements uh to the least that involves the the the conduct of the animal and how they care for the animal. You know so there's more to IT than just charging extra money. No, I mean.

to protect yourself.

you you would want to do those things. In addition, you would want to do extra documentation in addition to charge extra for deposit event.

It's a really interesting calculation to make because you're looking at the extra rent you might bring in. But then also if that tenant does stay longer, that's cutting down on your turn over cost. So it's it's a complicated thing.

right? And like maybe they do stay longer, but they're they've been there seven years and you do have to replace the carpet now when they're gone, whether regular ten and there seven years, you would just be using that same carpet in for the next ten.

You know maybe maybe this is not every case you know it's it's uh I think that having pets simply increases some of the risk of uh of owning rental property and IT happens to be a an area of risk where you don't have as much control as you do over other things that you do like you know your maintenance and and and expenses um in determining whether a prof uh, property is profitable, it's it's a it's a it's a risk that you only have a limited amount of control over. You just don't know how your experience with that family and those pets is going to turn out compared to another family. The same situation.

if you're a landlord long enough, you're gonna get burned like someone is going to pay you, they are going to leave you with unpaid. Rt, have you had any luck in in going after a tenant like getting a judgment against them?

Yes, I have had some. I would have to say that that is it's um um relatively small percentage of the accounts that we turn over the collection agency actually get paid. But what does happen whenever we turn IT over to a collection agency is IT does immediately go on to the tenants credit report.

So anybody running their credit report for any reason, after that point, they will see A A collection account that is on there. Now I will say that, that I made sure that whenever I opened the account that we are the relationship that we have with the collection agency, I had have a name for the account and IT. Wasn't gonna be any of our company names? Because you know why I have one company name when you're actually own runs in several you know so um I actually I entitled our account landlord joel Miller.

And the reason for that is mostly so that future landlord looking at credit report would immediately see there was a collection account on there from a landlord if IT was just somebody's um you know personalized A L L C name uh that doesn't necessarily indicate that there are rental properties owned by that L L C. And you just see that name of the L L C is a the one that that is trying to collect the account. The future landlord may not even realize that there's a collection account for a landlord .

that's a great way to pay IT forward to other landlords.

So the the collection the collection companies, they charge a percentage if they collect anything for you and the longer IT takes to get them to uh collect, uh, the higher the percentage.

Do you have to actually get a judgment against the tenant to turn over the collections?

You do not need to have a judgment to turn something over for collection. A judgment can be part of what you turn over for collection. But the the the necessity is not there uh, for a judgment, the landmark has any more than the ones you see on there for stores or the phone company or uh a medical office or something like that where they just simply. Um had an unpaid baLanced by somebody long enough that they realized they weren't gona be able to collected and they just turn over collection.

They go to judges and get get a judgment on somebody that uh you didn't pay their financial rental fee, you know so um uh if you have somebody move out and um you realize the day of your money beyond the security deposit and you think that you are just going to be wasting your money spending IT on going to the district judge to get a judgment, uh you can still turn IT in for collection. And um again, you will have a satisfaction of IT turning up on the credit report immediately. But also there is that chance down the road that um they're trying to do something that they can do. The creditor will not allow them to do unless they pay off any collection account. And that's happened to me like years and years after turn something in.

i'll sudden get a check. Ww, that's some I meet some some money showing up that you weren't counting on. I think that's that's great. So I mean, I go into IT thinking you're probably not onna get paid.

but you never know, right right? It's some it's doubtful. But IT IT doesn't hurt because there is no charge for turning an account over to a collection agency unless they collect money for you if .

you want to learn more from joe, he had just written a new book. It's called build real est wealth. He basically took everything he knows about rental properties, and he put in on paper.

It's a really good book. I got a lot out of IT. I think you will do if you want na check IT out.

I've gotta link to IT on the website. You can find that out of rental income hide cat com slash episode four and ninety six. I'd like to thank chi ridge from rich lending group for sponsoring today's episode.

If you're looking to buy a rental property, whether you are just getting started or you want to add to your portfolio, reach out to ji. She's got a bunch of different loan programs and he can find something that I work for you. If you want to find out more, just go to ridge lending group that come n mls four two zero five six.

Thank you so much for checking out the podcast today. Make sure hit the follow button. I put out a new interview every single tuesday, and if you're following the show, you'll notified as soon as the episode comes out.

My name is danny, and this has been the rental income pie cast. We're driven by the search for a Better. But what IT comes to hiring the best way to search for a candidate isn't the search at all.

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You need. Indeed, a lot of things that we do can be pretty complicated. I'm always looking for ways to make things easy.

And one of the easiest things ever did was create my wheat trust and White. And you can get ten percent off at trust. And will that comes? Slash R I P.

Let me tell about my experience. I went to trust and will that com. The website is really straightforward.

They walk you through a series of questions, you answer them and you get your will. It's really that easy. Every will or trust is state specific.

It's legally valid and customize to your needs. And having a willer trust will really help your family down the road. It'll let your family avoid expensive legal proceedings that take a lot of time, or even worse, having the state decide what happens to your assets.

They have lived, customer support there have available through phone chatter, email, whatever is best for you. And they have a great reputation. They have thousands of five star reviews on trust pilot, let trust and will uncomplicated the process for you, protect what matters most in minutes at trust.

And will that come slash r IP and get ten percent off, plus free shipping, that's ten percent off. And free shipping at trust. Will that come slash R I P? Figuring out life insurance can be very complicated, but policy genius makes finding and buying life insure and simple.

That way, your loved ones have a financial safety net. If something were to happen to you, they could use the money to cover debts, maybe pay the mortgage or anything else. With policy genius, you can find life insurance policies that started with just two hundred and ninety two dollars per year for one million dollars of coverage.

Some options are one hundred percent online and let you avoid unnecessary medical exams. Policy genius has been sponsoring the podcast for years. I've heard so much positive feedback from listeners that are purchase policies from them.

What I hear over and over again is that people love how simpler is. You can do everything online, but at the same time, they have real license agents that are there for you. They can answer any questions or hold your hand to the process.

Whatever you need, there are there for you. It's super easy to get started. All you have to do is go to policy.

Genius died com. You're going to answer a few questions. And then you can compare quotes from the top insurance companies side by side, totally free. There is no hidden fees, even if you have life insurance through work and may not protect your family's needs or IT may not follow you if you were to leave your job, secure your families tomorrow so you have piece of buying today, head to policy genius outcoached get your free life insurance quotes and see how much you could save. That's policy genius dot com this time a year.

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