With 30 Years' Experience, Jeffrey Taylor Has More Than Earned The Moniker 'Mr. Landlord.'
With 30 Years’ Experience, Jeffrey Taylor Has More Than Earned The Moniker ‘Mr. Landlord.’
Mr. Landlord, as Jeffrey Taylor is known, is the resource for landlords eager to learn best practices from his 30 years of experience. Taylor says he reaches more do-it-yourself rental owners than any other company through his numerous publications, trainings and website.
Based in Virginia, Taylor has written several books and offers a weekly Rental Owner Update and monthly newsletter providing insight on current topics. Think Realty contributing writer Susan Thomas Springer interviewed him recently to get his valuable insight into this area of the real estate investing space.
Susan Thomas Springer: How does your business help landlords?
Jeffrey Taylor: We teach, train and motivate rental property owners to achieve maximum income from their property, take control and reach greater success. Also, we connect landlords to needed services including screening, rent collection, insurance, legal rental forms, tenant debt collection, discounts on rental supplies, management software, virtual property assistants, property managers and more.
So, a repository of just about anything a do-it-yourself landlord might need to know.
Yes, we are a much-needed source, especially our Q&A forum on our website, www.MrLandlord.com. This is one place where landlords can connect with other rental owners and receive answers and support whenever they need it, 24 hours a day, seven days a week.
Ninety percent of my audience owns rental property. The vast majority—up to 70 percent to 80 percent—are do-it-yourself landlords who own up to 50 rentals. They are men and women (close to a 50-50 breakdown), average age span 25 to 65, often very independent types (sometimes to a fault) who do much—if not all—of the landlording tasks themselves and who are learning through trial and error.
When you became an accidental landlord 30 years ago, how did you educate yourself?
At first, my wife, Dot, and I made many mistakes. I knew I’d run out of money fast and wouldn’t be able to hold on to my properties. So I started searching for every piece of scarce information I could find and attended any seminar to learn what would help me survive and be successful. We attended trainings on various aspects of business and started taking ideas from other successful businesses and applying the concepts to the landlording business.
What did you wish you knew then?
First, there is much to learn beyond landlording that affects your bottom line, such as how to run a business with policies, procedures and checklists; communication skills; psychology in working with people; marketing and salesmanship; landlord-tenant and fair housing laws; and team building to get and keep the right people.
Also, I don’t know if it’s human nature or just me being naïve, but I had not realized that a small percentage of individuals can look you straight in the face and say something they know is not the truth. If you’re running this like a business, if you keep getting caught by that 5 percent, it can kill your cash flow and literally get you out of the business.
What information should landlords check about potential tenants?
When landlords talk about “running a background check,” it involves a lot more than simply checking credit. It means screening and verifying aspects of each applicant including income, income history, rental history, criminal history, social media and more. I encourage landlords to take it a step further and look at cooperation history and cooperation potential.
Is it difficult to find that background information?
Regarding criminal reports, in a lot of states now, the information is public so landlords can pull it up online, and it might not be necessary to pay for a criminal background search.
You can find out information now in less than a minute or two, which helps when renting property in a competitive market. What I suggest to rental property owners is find out at least the initial information from these reports, take people at face value and let them know if they’re preapproved. That way, they walk away after meeting with you feeling, “OK, I got it.” Now, of course, I’m going to still go ahead and do my complete verification process before giving the final approval.
How can you fill vacancies quickly?
If you’ve got a lot of rentals, you should always be advertising—at least marketing through your current residents. Let them know on a regular basis, maybe once every three months through an email newsletter or door hangers, “We offer a referral fee,” if that’s permitted in your state, a cash bonus or a free upgrade for those who refer a friend, family member or co-worker. You should be doing something like that so you’ve got the phone continually ringing. A website is pretty much a necessity, one with plenty of quality, professional pictures so when people call, they can look at pictures or take a virtual tour on YouTube and they’re ready to make an application without necessarily seeing the property.
What legal protections should landlords have?
Obviously, insurance is important, and having an umbrella policy adds to your protection. Note that insurance doesn’t cover everything for which a landlord can be found at fault (environmental issues like mold, or fair housing issues like illegal discrimination, for example), which is why for asset protection purposes it’s not good to hold title in your own name. This is a discussion that should be fully conducted with an asset protection specialist.
How can landlords understand varying state laws?
Review updates to the laws in your state each year. A lot of information is available online. Also, attend classes, seminars and trainings on an annual basis, so that you’re hearing the full impact of those changes on your business. This type of training is sometimes offered informally by a local real estate association. And consider (and Google) formal landlord-tenant trainings offered by companies for your state.
What are the best strategies to guard against interruption of cash flow?
Develop a customer loyalty program.
I don’t want residents thinking they’re signing a lease and just becoming another tenant. I want to create the same type of feeling with my residents that I have when I think of my connection with my preferred airline—it’s the first one I think about when I decide which airline I’m flying because of its customer loyalty program.
Mine is called the Three Star Resident program. I have perks from move-in to anniversary gifts. Those gifts are usually improvements to the property, so at the same time they’re receiving a gift, I’m also helping improve my properties. As years go on, my residents are loving it. One of my mottos is “We reward our long-term residents: The longer you stay, the better it gets.”
Why is it so important to limit turnover among tenants?
The average vacancy time in this country is at least 30 days, which means the average landlord is losing a month’s worth of rent. A typical scenario is: Residents move out and then you inspect, find things that need to be fixed, send an itemization of things that may have been damaged they are responsible for, deduct it from their deposit, and they go on their non-merry way. But then it takes a couple of weeks to fix the property, followed by another couple of weeks to fill the vacancy.
Forget all that. Instead, offer them a bonus of $50 or $100 on top of the return of their deposit if they’ll cooperate to get the place rented by their last day of occupancy.
So this gets back to the “cooperation history” and “cooperation potential” you referred to earlier?
Exactly. Some landlords complain they’re not getting cooperation from their residents when they call to show the property. Many landlords don’t even want to deal with the hassle of communicating with their current residents. That’s cutting into your cash flow. Let’s give residents an incentive and give them clear instructions. One, get the property in move-in condition even before they move out or as close to it as possible. I’ll even send a maintenance individual over to assist in the process.
I also ask tenants to please be ready to say “yes” when I call to ask to show the property because this will help them get that bonus. And when I get there, they should be ready to say something positive about the neighborhood or the property because that also will help in the transition process. If you’ve got the cooperation of the current resident, it just makes your life so much easier.
How quickly should a property owner get the new tenant in place?
Get the next person in within hours. There’s no deferred maintenance if you’ve taken time every six months to do a preventive maintenance check. With those gifts every year, I’m improving the property—maybe the carpet needs to be changed. Take care of things like painting, so when it’s time for the person to move, there’s very little to take care of. One of my management goals is to have the place filled within 72 hours, if not sooner.
What coming trends should landlords prepare for?
Two of the biggest trends I see are growing regulations and fees imposed by municipalities across the country—be ready to fight or pay more. Second, more landlords will receive more income from other sources than traditional rent. For example, some of the larger property managers and apartment owners will add an administrative or leasing fee to the process. It may just be $50 or $100, but it’s adding to the income.
What’s next for Mr. Landlord?
I’m working on another book and continue to do trainings. I do two boot camps a year and a national landlord convention. I do a landlord retreat or cruise each year. We just opened up a whole new aspect of our website on www.MrLandlord.com. It’s a section just for members with all kinds of audio trainings, video trainings, special reports, rental forms and other resources that can be downloaded on demand.