Lowering my operational expenses

[Sydney Barrett]

I'm interested in how people are having success in  increasing the margins that they make on rentals. I manage my own properties and I'm looking for some tips and tricks to do that more efficiently. 

[Mike H.]

I did the same thing with my insurance as well. Its not really an umbrella policy. Each house you add will increase your premium. But the policy I got does allow me to share certain things. i.e. If a storm hits and knocks out 3 roofs, I only have to pay my deductible once and all three roofs will be covered.

I was using NREIG which was for investors. I went to a broker who got me in this commercial policy and I saved about 22%. Doesn't sound like a lot but when you have 68 properties, its noticeable. I think at the time I switched, i saved myself 1400/mo or so. And my coverage amounts actually went up. :-)

One other thing. Put as much hard surface flooring in your homes as possible. One of the biggest turnover expenses I see today is replacing carpeting. Now, technically, I could carpet a house for 2 bucks a square foot with the lowes 49 whole home install. And laminate or vinyl plank is running about 4 to 5 bucks a square foot to install.  So I could replace it again with carpet and still be ahead.

But in terms of operational costs and simply the headache of having to get someone over there to remove the carpet, dump it, and then install, doing the hard surface flooring is one way I would suggest you could lower future operating expenses.

Same with plumbing fixtures. Stick with the moen faucets (bathrooms and kitchen) and kohler toilets and you'll have a lot less problems there as well.