Best ways to trim expenses from your Buy-and-Hold REI?

[Paul J.]

Hey everyone,

I thought I would start a thread to try and collect everyone's experiences on the best/most effective ways you have cut your expenses on your landlording business.

I'm brainstorming on the expense side this evening, and I'd be interested in hearing turn-around stories from properties you have purchased, tips or tricks you apply to your individual properties, or any other broader concepts that have helped you control the expense side of your investments.

I just purchased my first duplex in July and am currently renovating one of the units. I started my journey by negotiating seller financing at 3.5%, so that was a good start!

So far in my very short journey I have:

* Installed low-flow shower heads.

* Caulked and weatherstripped around all exterior doors/windows, and even replaced one that was in that bad of shape. We also resealed old holes from cable TV & Telephone wire entry.

*Changed landlord insurance companies to save ~$15 per month.


On my to-do list for the rehab are:

* Separating the natural gas service and metering each unit individually, so that all future leases will not include the expense of heat. I will also be installing storm windows and having the furnaces serviced. I expect to reduce the rents by an amount that accounts for 75-80% of the current gas bill, with the other 20-25% to be found in both the tenants using the heat more efficiently and in better weather sealing and replacement storm windows.

* Replacing all bulbs with CFL and including a replacement costs for any missing/non-op bulbs in the lease. My two apartments currently use about $150 per month in electricity.

* Checking in with my utilities to see what other rebates or services may be available, especially in light of the fact that my property is in a lower-income area.


What other ways have you been able to reduce your expenses on on your rental properties?

[Bill S.]

I assume from your post you are paying utilities otherwise from a purely financial standpoint, all your winterizing is a waste.

The largest cost for nearly every landlord is turnover or vacancies. Just one month vacancy is more than 8% of your income. Get your vacancy rate down and that is the greatest cost savings you will enjoy. For example, when a tenant is moving out and they keep a clean neat place. I start showing and have someone move in the day after they move out. Cleaning is done the moveout night and pre-arranged. Any repairs needed are done a head of time or schedule after the move-in. Zero down time will put the most $ in your pocket.

Thinking about DIY. Take two weekends to paint an empty when could have hired it done in 2 days by a pro. Two weeks empty just paid for the pro to do the work and you have your time. Biggest rookie mistake is doing the work themselves unless they can work at it full time or nearly full time. Figure out how much it costs you each day to hold a place (lost rent and utilities) and see if it isn't more cost effective to pay someone to "Get it done!".