A couple of weekends ago I had the good fortune to talk with a friend’s dad who is a veteran of the landlord business. This guy owns 175 units in Lake Worth, Florida and has been a landlord, as well as being in other businesses he started, for many years.
The conversation started out with me lamenting the fact that the economy is totally putting a damper on my rental business and that I thought that with scale (more rental units) things would be better. It turns out that his vacancy rate is not much different than mine which was kind of comforting. By the way, another landlord friend in West Palm Beach, FL also mentioned that her vacancy rate was lower but said that hardly any of her tenants were paying on time and in short, she is having to do a lot more work to maintain her business. Also comforting to know that I’m not alone.
Here are a couple of interesting things I learned from my friend’s dad:
One thing that that struck me was that he handles all of the maintenance requests/problems himself. (!!!) I’ve heard stories of him taking phone calls from tenants while vacationing in the Andes mountains of Chile but I didn’t believe it until that day. He was dealing with a sewer problem in no less than 3 of his apartment complexes. When I asked him why he does it that way, he said that maintenance costs will eat you alive if you let them. He has a small maintenance crew which he directly employs in order to keep costs down.
Another interesting thing was his experience with the landlord/tenant court in his area. I mentioned the frustrating experience I had in court when trying to evict one tenant and he said that he sees the same thing. The judge basically does what he or she wants regarding the landlord/tenant code. He said that a judge once told him in open court, “In here, I’m the law.” Nice! It seems that the state statute is simply a guideline even though it specifies certain things in detail. My friend’s dad said that that’s why you need to have your papers in order or the judge will use it against you.
Despite these two things, he kept referring to the whole exercise as “fun” which was interesting. Hopefully in the future, I’ll get to talk with him again soon. It was truly enlightening.