All Forum Posts by: Jeff Takle

I find very few people who can articulate how they make money through blogging. Having participated in a number of worthless blogs and having written an number of articles for publication, I'm really curious about how people attempt to make money on their blogs.

I integrated our current blog directly into the home page/navigation, use cross-marketing, and web forms / polls to capture useful information and...more importantly...convert readers into paying customers.

I use Google Analytics code and set a conversion goal on successful paying subscribers to the RentingYourHome main product, in order to confirm exactly how much money we make each month from different blog posts. Some blogs don't make anything. Our best post made nearly $6,800. Critically important to know how much we get paid for what kinds of articles.

Ron and Al (and others), what do you do to make money on blogging?

Just going through this myself. T-mobile (and I'm guessing others too) has a $9.99/month add-on for VOIP phone with unlimited minutes. If you make a lot of calls from home or T-mobile HotSpots like Starbucks, all those minutes will be included in the $9.95/mo.

I killed the data service b/c it's too expensive and instead moved to SMS alerts for critical items. Also, i found that far fewer items really require immediate attention that don't end up as phone calls anyhow. Nobody sends an email in an emergency. They want to hear a voice on the other end of a phone.

The IRS doesn't care if you rent to relatives with the following exceptions:

1. you cannot rent to your spouse. Unsure if that includes divorced spouse, but I suspect that's a no-go too.

2. you cannot rent to yourself. Funny, but I checked with the IRS about this a few years ago. No IRS tax tricks allowed, apparently!

Otherwise, you can rent to whomever you like as long as you don't discriminate, you collect fair market rents, and you report everything.

Yes, you continue to report all the expenses as a vacant rental property through 2008. If it goes vacant all of 2009, though, be prepared for an audit, because if you can't rent it for 18 months, then you're not trying and it looks like tax evasion.

#1 piece of advice is to drop your rent rates immediately. In Boston, 6 months vacancy would cost you $12,000 in lost revenues. If I cut rent by $500/month, I would only have lost $6000 during that same period. Cut your rent rates and get someone in there at the right price. Rents are dropping across the country and expected to get worse in 2009. Vacancies are your fault, for not having it priced right.

Take a Saturday morning and post ads in every conceivable web portal, flyers in every store around town. Drop your price to where it should be -- other people are filling vacancies so see what they're charging. You need to solve this problem immediately and pay for professional help if necessary b/c you're bleeding cash.

Wow, this is really a good thread guys. Thanks! My $0.02. I manage all my own properties...

Most of PM work is repetitious. A huge portion of time is spent coordinating. When it's a one-man show there's no coordination and I've found it's much more efficient. It's sometimes even cheaper for me to fly around the country to rentals and manage maintenance myself when necessary than to pay someone else. I use these tax-deductible trips to see new rentals, buy/sell, show, manage and maintain.

I am responsible for the management activities of 919 rental units. I have one half-time helper for the office who does no maintenance. If you're efficient, it's amazing the kind of scale you can create. I hate to plug a biz-ness-ie book, but Tim Ferris' "Four Hour Workweek" is a good taste.

Most of the "hire it out to a PM" crowd, I'm afraid, is working off landlord legend and gossip, not real experience. You can't take experiences with your very first rental and say "that's how it is". No, you learn, get more efficient, and figure it out.

My real cost (salary included) is less than 2 percent per rental. If you pay 10 percent for PM, then my properties outperform yours by 8 percent in PROFIT. Now multiply that advantage by 919...

Clearly there's a line between doing this as a profession and doing it as a hobby/part-time.

Each state is different and some do not allow "holding deposits". Massachusetts, of course, is one of those. But, assuming it's legal...

You can always sue them in small claims court if they do try some kind of pressure situation at lease signing using the holding deposit. If you have a blank copy of their template lease, keep it. Go to the lease signing and try not to walk in with a chip on your shoulder.

I'd think most judges would side with a tenant if your worst case scenario happens. I agree with Jon's assessment of why the landlord likes this situation. Remember, landlords want the vacancy filled so it's also in their best interest to get the lease signed 3 days prior...you backing out is a bad thing for them, even with a holding deposit they're likely to lose money.

You still have leverage.

Two more quick considerations:

5. House cleaning. When they stay only 4-5 days a month, nobody takes ownership of the space and it turns into a pig sty. May either cost you $$$ for house cleaning, or you''ll own a pig sty.

6. Turnover. Flight attendants buy crash pads to fit their work schedule and those schedules change all the time. You'll constantly be finding new tenants. So, bulk up your advertising dollars or get friendly with someone who'll consistently advertise in the pilot lounge.

Oh, but crash pads exist all over the place. The naysayers above either don't live near a major airport, or haven't spent a LOT of time on planes talking with flight attendants. Previous job had me traveling 5 days a week and I asked them hundreds of questions.

It's a totally viable, secret society of crash pads. Very very tough to break into though.

Julian,

Crash pads are a great opportunity. I did a lot of research into them in 2004. Anyone in the flight attendant business will tell you they're essential to making ends meet and having a better lifestyle. Ultimately I decided not to do it for reasons I'll outline below.

1. Biggest problem you'll face is advertising to flight attendants and pilots. Talk to a flight attendant about where they found out about their current crash pad(s) and you'll discover it's either word of mouth or in their pilot break room, to which you do not have access. Very tough to get your property advertised where it matters most.

2. Most crash pads are currently owned by pilots who see the same opportunity but have much better access to the customer and can directly impact word of mouth. They are your competition. How do you beat their access?

3. Security. If you're renting 7 beds ( you may be able to rent each bed to more than 1 person...maybe) then you've got a security issue with keys. This becomes mostly a headache for you and a security nightmare for the other tenants. If tenant A leaves a bag with goodies, tenant X might steal it. Now you'll sink 20 hours into resolving that fight. There are electronic door locks with codes you can change every quarter, though, that would solve that problem for about $300 per house up front. If you live near the properties, that can work.

4. Good news is that #1 consideration for crash pads is how close they are to the airport, which generally means cheap properties. Folks generally weren't looking for a party pad; they just want to sleep, get up, and go back to work. This can help lower your costs.

It's a really interesting niche and I've never met a full time real estate professional who specialized in it. I couldn't make the numbers work and I was VERY concerned about not having access to best advertising / customers. Plus, pissed off pilots (if you take their tenants) will work against you. Their word will trump yours in the break room.

If you do it, please keep posting on here -- super interesting strategy! Way to go.

Jeff

Dan, this is long but there's a lot of confusion out there about lead paint removal. I've gone through the process with HUD, state, and local governments, attorneys, lead inspectors, contractors, and tenants.

Federal law requires that you issue a disclosure statement to every tenant that lets them know if you know of any lead paint. If you don't know, then you check the box that says "I don't know."

In areas where most of the homes are older, it's taken as a given that there's lead paint and most landlords decide not to test b/c they fear that if they know there's lead paint they have to remediate. That's not exactly true.

-Regardless of whether you "know" or not, you as the property owner are still liable for any lead paint damage. So, even if you don't do an inspection, you're still liable which means you can be sued for damages, contrary to popular belief in the landlord community.

-But, if you do an inspection, then every one of those disclosure statements must be checked "Yes there is lead paint here" and that will drop your market rent rates. Judges will also then give you no slack in a suit b/c it's clear you knew there was a danger to your tenants. The actual application of law, though, stays the same--you're still just as liable as before.

-If there is a child under the age of 6, then state law (I forget whether this is federal too) will hold you Strictly Liable.. This means that you can be sued without limit. it's their fun way of encouraging you to remediate if children are in the house, since they're most likely to eat paint chips and suffer the consequences. Again, whether you know of the presence of lead paint or not, and whether you clean it up or not, you are still held strictly liable if there are kids in the house.

Then why do lead paint testing or removal at all?

Because, if a tenant (or their kids) eats paint chips, gets sick, and sues you in court, you'll have a Lead free certification to show the judge. This is no guarantee of freedom, but it's the best evidence you can provide a judge that you have tried everything within your power to protect your tenants and, the precedent in case law says, you will get off. Not a guarantee mind you.

So what should I do?

If all the homes in that area are old, they all probably have lead paint. If the numbers cash flow, it can still be a good deal. Check with your city's lead paint, community development, or housing office to see if they have any HUD grant money for lead paint remediation. I'm in the middle of a $25,000 grant right now for free remediation. Otherwise, be prepared if you accept tenants with kids to foot the bill. A two-family house with moderate levels of paint costs about $40,000 to remediate--it's expensive.

Ultimately, it's a craps game. Decide how much risk you want to assume and price it against the cash available and profit potential on the property. Most landlords keep their heads in the sand and hope nothing goes wrong.

Negotiation only works when there is give AND take in the discussion. Tenants only want "take"

Despite what the books and classes say, life rarely offers up negotiations with absolute win-win scenarios for everyone. usually both sides lose a little to win a lot.