Having to manage rental houses can be pretty confining unless you learn the fundamentals and implement an automatic management system. At first, my wife and I did everything ourselves – both management and maintenance. After placing an 'open house' ad in the paper, we'd load up the car with our 'chemical warfare kit' of cleaning supplies, paint, tools and materials. Many times we traded off rental deposits in return for the new tenants completing the clean-up and painting.
After a few years I burned out as a maintenance manager and wrote all my tenants threatening letters to the effect that, if they ever called me again for a maintenance problem I was going to either sell the house, raise their rents, or both. Surprisingly, they stopped calling me for repairs, but the houses began to deteriorate. So I devised the discount rent program that has now become the standard of the industry. I began it by charging the tenants per telephone call, whether I had to call them because of late rents or they called me for maintenance. Later, this was refined to my 'bonus rental rebate' which tenants now receive if they've maintained their house and paid their rent prior to 5 PM of the last day of each month. Even then, they must pay the first $100 of any repair charges.
My management program has steadily decreased my own involvement, but at some cost. 20 years ago I absolutely stopped showing rental properties to new tenants. Instead, I left keys with neighbors who'd let prospects in to look around. Then, I left keys with a private mail room that released them only after receiving a $25 deposit plus $25 to process a completed credit application. On occasion, I left a house unlocked over a Sunday and got a neighbor to lock the house at the end of the day. But I quit working weekends and nights to rent a house or do maintenance.
I found a guy who liked to do maintenance on rentals and set him up in business to do that. This way, I avoided the liability for his injuries on the job, and made a good friend who has stood by me since the early 70s to handle maintenance emergencies. More recently I've found another guy in the 'fixer-upper' business who wanted to increase his income by doing management. His company now leases my houses from me and subleases them to the tenants. While this costs me part of my cash flow, it also sets me free to do a lot of things I never had time to do.
Since 1982 I've been taking subscribers on 'el cheapo' tours and trips with me. We've taken cruises to Alaska, Mexico, the Bahamas and the Caribbean islands. We've traveled to Hong Kong and Singapore. We've taken RV and Motorcycle trips into Canada and through the National Parks of the West. Together, we've gone on safari in Africa and even around the world. Each year the numbers of people who could afford the time and money to come has increased.
Why am I telling you all of this? There's nothing that makes me feel quite so good as the success of you and your family. If you still have a ways to go before you can quit, I want to motivate you to work harder to succeed and to start enjoying the good life as I'm doing. When the real estate cycle returns, I don't want anyone to miss out.
