Calling all (successful) Low income (class C / D) investors

[Latisha Douglas]

Please share your systems and tips for successfully running a low income investment strategy. Especially around rents, maintenance, evictions, tracking expenses etc. I recently purchased a few low income properties that of course looked great on paper. But Reality is hitting and realize I don’t have the right systems in place to deal with this class of properties. Rent is ALWAYS late. Utilities not paid (in this town the water bill must be in the owners name) Constantly something that needs to be fixed. Tenants not taking care of the unit and I’m responsible. Just had 2 section 8 re-inspections and there is a laundry list of items to fix. I KNOW I can be successful in this. My properties are actually on nice streets even though the overall areas isn’t great. It’s very block by block here.

[Jill F.]

#1. Don't be a slumlord. Get to know your properties and get the properties in good repair before you rent them:
Make sure the windows are functional, safe, clean, and have window treatments. (Clean the window sills too) Old windows often need to be re-roped, make sure the locks are functional, make sure they open and close. Make sure you have screens and storms.
Paint or wash the walls if recently painted. If the trim needs to be painted, use joint compound to smooth out rough edges from multiple layers of paint. Choose modern colors.

Clean carpets (we are moving away from carpet all together). Replace worn flooring.
Make sure the appliances are clean and functional (and match!)
Make sure all built in cabinets, cupboards, and drawers are clean and empty
Make sure the bathroom fixtures are clean and functional (run the water and test every drain). Flush all the toilets.
Check all the outlets and make sure the plugs stay in and that the outlets are functional (note any switched outlets)
Test the smoke detectors
Replace batteries in digital thermostats
Make sure all light fixtures are working (we replace bulbs with leds).
Make sure there are thresholds and not rough flooring edges.
Make sure the HVAC system is functional.

At your move-in walk through: show your tenant where the breaker box is and how to reset a tripped breaker.
If you have old triple track or double track storms, show the tenants how to operate them.
Show tenants how to relight the stove pilot light.
Test the smoke detector in the tenants presence and show them how to replace battery if not a sealed unit.
Show the tenant how to operate the thermostat.
Remind the tenant to use the bath fan or to open the bath vent window.
Point out the clean stove and fridge (and snap a picture) and let tenants know want them back in the same condition.

If you do these things it will drastically cut down on your maintenance calls. It will be clear to tenants (just from having clean windows and appliances) that you care about and maintain your properties.

Extras:
If the cabinets are decent but tired-- refinish them and add new pulls. I trained a tenant to use the rustoleum cabinet transformation kit and it looks great and holds up well and makes a huge difference! and helps you rent FAST. For less than $100 you can transform a kitchen.

Your property may be in a C or D neighborhood and it might not have all the modern ammenities but if it is clean and well cared for it shows! Tenants appreciate good value at every price point-- and it's hard to find at the low end of the market. I own and manage properties in B- through D neighborhoods.