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MORE RENT LESS DEPOSIT! | By: Fellow GDREIA Members

Rental Owner Updates - October 7, 2016
MORE RENT LESS DEPOSIT! 
(c) 2016 MrLandlord.com  All Rights Reserved
 
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NEW ANNOUNCEMENTS/TIPS - MRLANDLORD.COM
Since our last Update issue was delivered to you.
* MORE RENT LESS DEPOSIT!
* Collecting Money On Time "After" Move-In
* What Would You Do Differently?
* Communication Is Important in Time of Storms
MORE RENT LESS DEPOSIT!A person asked this week on the MrLandlord Q&A for input on offering new residents the option of paying significantly less deposit if they would pay slightly more monthly rent.

My response is this: For the last couple of years I have encouraged landlords to consider offering all-new, fully approved residents the following option for Move-In Funds Requirements:
Option A - (Traditional) 1 month's rent plus 1 month deposit or
Option B - 5% higher for monthly rent plus 50% off deposit.
So for example, if you would normally charge $500 in rent, the following would be the two move-in payment options you would offer:

Option A - Rent $500, Deposit $500
Option B - Rent $525, Deposit $250
For those with higher rental amounts, simply use the formula I gave above to figure what your options would be.

This plan is very easy to convey to new residents. And it's suggested that the options actually be incorporated and presented in the lease. That way, anyone doing the new resident orientation for your properties will not be able to neglect offering the options.
And as you can imagine, sometimes new residents actually ask us before the orientation begins if we can work with them on the deposit. Our response is, "We actually offer you two options right here in the lease. Choose the option which works best for you." 

There's one other note to readers. Even with just 5% added on to whatever your rent, as long as your renter stays at least a year, the additional rent received over the year added to the the smaller deposit will still be more than the traditional deposit that most landlords require. I mention that for landlords who are concerned that the smaller deposit received will be less money to cover themselves in case of damages after a year.
Those who have attended my bootcamps know that with the management systems I implement it's very rare (if at all) that I have someone move before staying with me at least a year. Likewise, it's rare that damage builds up to any significant amount during that first year that the resident doesn't cover while residing in the property.
To see the complete discussion on this topic click now, which includes input offered by several landlords on how much deposit they now require.  Some landlords and managers no longer request any deposit. And as always, be sure to check landlord-tenant laws for your state before implementing new ideas. One book I recommend for all landlords to have as a resource is called Landlord's Legal Kit for Dummies, which is only $29.95. Click to read more or to order online.
Agree or Disagree? Share your thoughts. We welcome your feedback or any landlording tip you would like to share. Email editor@MrLandlord.com
COLLECTING MONEY ON TIME "AFTER" MOVE-IN  

Collecting money at move-in is the easy part. The challenge is collecting rents on-time from that point forward. As many of you know, I like it best when the rent collection is done automatically each month without the resident having to stop and think about whether or not they are going to pay rent. For many residents, they also like to not have to worry about taking or sending a rent payment. Check out two collection methods to make your rent collection a lot easier and automated: 
WHAT WOULD YOU DO DIFFERENTLY?
 
A new real estate investor asked, "What would you do differently that would impact your landlording business positively, if you could start again? 
The responses offered a lot of food for thought that many of you may find helpful in growing your rental business, and perhaps help you avoid some costly mistakes.
COMMUNICATION IS IMPORTANT AT TIME OF STORMS
I read an article yesterday that reminded me that landlords should not leave it up to their residents to know how to prepare for potential storms coming their way (Hurricanes in this particular case). Communication and clear instructions beforehand can save a lot of possible damage, and even save lives. The article was shared by Think Realty, who will be holding a conference in Atlanta next week where I will be one of the instructors. 

I also want to remind landlords to do their due diligence at least once a year and make sure they are getting the best coverage and cost-effective prices for property insurance in case of any potential damage that may occur to their property from fire, water, or any potential disaster. Click here if you wish to get a free quote on property insurancefor one of your rentals, occupied, vacant, or in the process of rehab. And click here if you need more money for rehab or to purchase more rentals.
Make the most of the assets that God gives you!  Remember to stay positive, professional, and in control!
Jeffrey Taylor
Founder@MrLandlord.com  P.S. I hope you read our last Update. We highlighted feature discussions on how to greatly Increase Your Cash Flow and do Tenant Turnarounds in only 24 Hours. If you missed that update, click now!

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