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8 Habits of Highly Effective Inner City Landlords
Special thanks to Ibrahim Hughes who agreed to help with this post. We hope you find it useful on your quest to be a great landlord.
Did you know inner city landlords have super powers? They can easily
amass equity with very little effort, but all too often they don’t even try. Yes, they renovate and make their units shine, but most stop short of doing what’s needed the most - providing leadership for the surrounding community.
Operating as a normal passive landlord isn’t effective in low income neighborhoods. All communities rely on their residents to keep them strong, but in low income neighborhoods where the majority of the residents are renters, rarely will tenants engage their communities more than their landlords do.
This dynamic gives inner city landlords their super powers. With very little effort, they can lift the lid on their properties’ appreciation potential. Not only can they save the day by getting involved, they can also capture the equity rewarded to those owners helping the area appraise at normal market values.
If this is a mission you’d like to accept, then begin by practicing these habits used by highly effective low income housing landlords:
1. Respect your hood – Simply being an inner city landlord grants you a little celebrity – use that to esteem others. Activate the Law of Reciprocity and show respect to everyone, especially those whose behavior you don’t like. This should be your starting move to win over everyone you meet.
2. Show up after something bad happens – There is a reason Presidents visit disaster zones; it comforts those needing a sense of order. The inner city landlord who checks on her tenants and neighbors after a something bad happens will garner goodwill and exponentially boost their celebrity. Also, this act of kindness directly helps a landlord’s bottom line through lower vacancies, higher net operating incomes, and earning the loyalty of neighbors.
3. Fight disorder within and beyond their property lines – Disorder is a catchphrase for graffiti, blight, and litter. Disorder creates an atmosphere that encourages illegal activities. Just as a store owner inside a shopping mall wouldn’t tolerate disorder in the mall, landlords should not tolerate it on their block. The neighborhood’s appearance is your business, so do what’s needed to reduce disorder everywhere on your block.
4. Harness the collective voice of owners – Disorder flourishes when property owners don’t communicate or pool resources. It is easier than ever to collect the names of all the owners on your block, just check your city's tax records or work with a real estate agent. If you practice the first three habits listed above, owner information will practically be given to you.
The next step is organizing the owners around the mission of keeping the neighborhood safe, clean and attractive. This way your block can gain a collective voice that gets the ear of politicians, the police, and the press.
5. Be a landlord’s landlord – Encourage other landlords to fall in line. You, as a fellow landlord, may be in the best position to influence them. When another landlord caps your property’s potential, having crucial conversations, backed by a collective voice, may be one of the most profitable things you can do.
6. Support annual community-building traditions – Local events, especially block parties with ice breaker activities, give neighbors an excellent excuse to meet each other. The benefits include:
• Crime-proofing the neighborhood by promoting unity and neighborhood pride.
• Giving other landlords and local businesses the opportunity to show good will.
• Increasing tenant satisfaction and lowering vacancy rates.
7. Promote and circulate good news – Like blight and disorder, good news also has a snowball effect. Actively spread good news to:
• Attract businesses which create new jobs.
• Give tastemakers the new information needed to form new opinions about your area.
• Encourage the troops and maintain accurate contact information.
8. Support local reputable businesses – Encourage residents to support local businesses that cater to them. Simultaneously, use the power of your collective voice to reduce the density of non reputable businesses (liquor stores, massage parlors, etc) that bring neighborhoods down.
This process may take up to five years. Yes, it does take time to change the world, just keep on practicing these habits. By making small, consistent, and easy changes, you will build the momentum needed to solve any problem the neighborhood faces! And, when your rental appraises at values found in the good parts of town, you will be able to fly off with a lot of equity and thanks from the neighbors.
Co-author Ibrahim Hughes is a 12 year veteran of the real estate industry. He serves as a managing member of We Buy NJ Real Estate, LLC a real estate investment company based in Union, NJ and is a licensed Real Estate Agent for ROCK Realtors in Bloomfield, NJ. He's also a long time volunteer of STEP, an inner city based youth mentoring organization. He can be reached at [email protected]
Al Williamson is a professional engineer who helps landlords discover new income streams, reduce expenses, and grow their equity. Follow his experiments at http://www.leadinglandlord.com
Comments (16)
Bingo J Salter these habits cause ripples that reshape the neighborhood over time. It's a compounding effect. I'm cheering you on.
Al Williamson, about 12 years ago
Good stuff AL, I'll have to re-read this and put some of it in my Strategic Business Plan. Bottom line I get is be the most positive (and wealth building) force you can.
J Salter, about 12 years ago
Al, I'm a bit surprised to not see something about organizing youth activities in this list - especially with Ibrahim having involvement with STEP.
Steve Babiak, about 12 years ago
Steve Babiak I haven't read a case study or know of a one-to-one tie between youth activates and landlords. I could infer they reinforce each other, but I don't have the data. Please share a link if you have one. I would love to add a real example to my list of best practices.
Al Williamson, about 12 years ago
You are looking at it from a specific perspective of "landlord", where as I was thinking in terms of a "business". http://www.bplans.com/youth_sports_nonprofit_business_plan/executive_summary_fc.php http://www.bizjournals.com/albany/stories/1999/12/27/focus3.html?page=all
Steve Babiak, about 12 years ago
Great Post I just recently purchased a duplex that is rented (but I am rehabbing/upgrading) and am putting a plan together to get my adjoining duplexes to also upgrade as they are the eyesores (mine soon won't be). Perfect timing on this article for me. I will post before and after pictures as I make progress. Thanks for the post.
Paul V, about 12 years ago
As usual... awesome and inspiring information.
Joe Bertolino, about 12 years ago
All, Great post. One of my concerns as a small but growing landlord is what might happen to y equity if a neighborhood deteriorates. It never occurred to me that I could have a real impact in actually increasing values. My properties are spread throughout Baltimore. Have you had success changing a neighborhood when you only have 1 property in an area? Perhaps this is another reason for having your properties in one part of the city. I've checked out your website briefly. It looks like you have some good info there. - Ned Carey
Ned Carey, about 12 years ago
Ned Carey (just getting the hang of how to respond to comments - pardon any duplications). I do believe you could have success in a neighborhood with only one property in the area, however I wouldn't advise it. The effort would not likely justify the return. If, on the other hand, you bought a multifamily (or cluster of SFHs) for $200K - 300K below your local market value, then by all means YES. The difference between your inner city purchase price and the values of a comp property in a good area is what you should look for as your reward. Also, I along with more knowledgeable experts (Brookings Inst, etc.) think the process takes at least 5 years (National Weed and Seed Program -- U.S. Department of Justice).
Al Williamson, about 12 years ago
Very interesting... I will be tucking this one under my hat. My wife and I are currently in Atlanta helping a home missions church in the most crime-ridden area and we spent several hours today looking at homes in the inner-city. It seems so ripe for the picking. Interesting that i came upon your post tonight...
Jason Grote, about 12 years ago
Jason Grote while you're looking at these properties, look for trash. Keeping the streets clean will be your first move. In fact, every neighborhood revitalization effort that I've study has started with a trash pick up. You might also find this article helpful: http://www.biggerpockets.com/articles/3624-how-inner-city-landlords-can-profit-from-neighborhood-restoration It describes a path to revitalization. It's not the only way to go about it, but it is a proven way to be successful. Best to you. PS You might also want to subscribe to my blog, LeadingLandlord.com - it's free. I share top secret stuff only with my subscribers.
Al Williamson, about 12 years ago
Picking up trash. What a simple but great idea. I often find when driving from one block to the next thinking "this is not as nice a block". It is often very subtle things like weeds in the cracks in the sidewalk and litter strewn about. That's something I can help with at least in a small way on every property visit.
Ned Carey, about 12 years ago
Ned, Al, Now instead of having a block party where I hand out popsicles, I'm going to hand out trash bags and have everyone go out and clean up trash too!
Bill Riggs, about 12 years ago
Thanks Pavel S.
Al Williamson, about 12 years ago
Good post! I spent a lot of time in the inner city and I could always tell where there were good folks that bonded together and cleaned up the streets. I was going to pick one of the 8 but I like all of them after looking. Good work.
Pavel S., about 12 years ago