Brad mentioned in his "lousy year" post that "traditional landlording isn't working."

Agree or disagree? If you agree, how are you adapting? If you disagree, how are you making the numbers work?

There are certain aspects of my business model I simply refuse to change on.

I feel one of the most important hours I spend with a new resident is me going over the lease, the buildings safety features and egress methods. During that hour to hour and half, I am setting expectations and teaching duties and responsibilities.

There are many out there that try to outsource this or automate it. There is a video that Mike Butler made that I show in person. It says so much of what most of you want to say but are afraid to say it. So I have added elements of this to my process.

I really look hard at what segments of my business I spend money. An areas that I need to improve is resident retention. One dollar spent yields me $25, yet I find myself not spending that much money in keeping keepers. Sure I have many folks that have been with me for a long time. Is it because of me or in spite of me?

There isn't anything wrong with traditional landlording. You do need to constantly improve your processes. You need to implement systems and follow the trends. Honestly, those trends are not looking so good for property rights.

A few years ago I bought into a tract of performing oil wells down in Texas. My investment was $250,000 so it wasn't a mega investment at all. Just a small play using a 1031 exchange so I got a few less calls each year. Rest assured, I did not receive a single call this year from the wells. I also got a 1099 in the mail this week for $48,000. That $250,000 investment was from a heavily depreciated asset and I traded it into an asset that I deplete each year. In 20 plus years, those wells might need overhauled. I probably will not be around to see it.

There is a time and place to be hands off. Landlording might be passive income but it is a sport that requires active participation. some people are not cut out to be teachers for residents

As I mentioned in my response to that post, first we have to define the term.

I define traditional land lording as a house or commercial space rented to a tenant for a fixed period, after which the lease is either renewed or the lease ends and the parties part company. The landlord is expected to maintain the property to a habitable standard and the tenant is expected to follow the lease, pay rent, and possible do some basic tasks like mowing, snow removal, cleaning, etc.

It's been working excellently for me. 2024 was my 2nd best year in term of net income. The only reason 2023 was better is we sold a place, which kicked us up into a higher tax bracket. Unfortunate, but I was looking for a quick flip to raise cash for another project so I couldn't 1031 exchange. Still, it's hard to complain when your account is full.

I'm on a "steady as she goes" plan now. Gradually paying down and paying off debt, not adding anything new, and just making small moves here and there like residential wholetales where warranted. At 54 units, I've probably got the max I care to deal with at this time. The W-2 job is still paying a nice baseline that stays consistent and provides cheap insurance and other nice perks, plus it's reasonably interesting and keeps me out of trouble.... mostly.

Can't say I've had a "bad" year ever in LLing. Some have been better than others, some have been challenging, but never "bad". Even in the early days when I wasn't making much cash flow, the foundation for today was being poured and settling into place. End of the year we always got a huge tax "refund" since the depreciation drove our income negative. I was learning and growing then. We never lost money on it and the returns since have more than justified the effort.

I would define traditional old fashioned landlording as the typical Mom and Pop rental house operation which has 4 or less rental properties to manage. Usually either SFH or Duplexes and nothing commercial. There are no written leases here, just good faith between the owners and the tenants. In addition, all rents are paid in cash since the LL shows up once a month to collect their rent in person. When the tenants do not pay rent, usually 3-4 months will pass before any tenants gets asked to leave. Since the water always stays in the owner's name, when the water in the pipes magically stops flowing is what usually prompts most deadbeat tenants to move out. No lawyers or courts involved here, that cost money! In the small behind the times MAGA infested town that I operate in, I would estimate that at least 1/2 of all M&P landlords here are typical of what I just described. This is true old fashioned traditional landlording.

Do I operate my rental business like that? Of course not!

However, I do consider my myself old fashioned mainly in the way I screen applicants and use more of a human approach to screen applicants instead of relying solely on credit scores and computer A.I algorithms. If you want details on how I operate my business, read the 10th edition of Leigh Robinson's book 'Landlording'. Most of what I know and practice in being a landlord came from that one book.

NE,

Your parents JAC probably had both, yet somehow you survived. Is it true that these are not the best things for you, absolutely. But they were what they had back then - and it worked for back then. What is going to happen when 10 years from now, when they announce being a liberal causes cancer? I don't expect you to change your ways - heck I would hope you embrace them that much more.

For those Greenies who are all high and mighty, they can also live in that all electric Telsa as it is a free country. No one is forcing anyone to live anywhere. When someone says it cost too much to live in SoCal for example, I say then move to the Midwest. No one is putting a gun to anyone's head.

In Los Angeles, From 2/1/2020 thru 3/1/2024, a landlord was not allowed to evict someone fro non-payment of rent. I lost over $630,000 in back rent. Then in April 2024, evicts began again. So the Mayor gave anyone who was being evicted Free Legal Aid, up to $5,000 per lawyer. So one of my tenants fired her lawyer and got a replacement and another 5 grand worth of assistance.

In the meantime all type of BS was going around and the State Tried to take away my guns saying I threatened my tenants. Not true.

Now the Mayor started a $47,000,000 dollar fund again to help tenants with tenant protections.

So during these times I kept around 20 units vacant. With the local Fires, Winds and now floods, around 15,000 lost their homes.

On person was an actor I knew, from the Star War Movies, not say who he or she was. They and their family needed an Emergency place to live. Living in their car wasn't an option. So I showed this family several of my larger units. They liked one, a three bedroom with 3 full baths. A dream come true with enough parking for their family.

The last tenant, some two years ago, was paying around $2,500 per month. The current market rate is around $4,500 a month. So I let this actor, with their spouse and two kids, pets, etc for $3,000 a month. No deposit.

The next thing I get in the mail is a fine for $10,000. For over charging for rent. I was only allowed to increase the rent from the past tenant by 10%, or $250/month. Under a law, going back 7 days, retroactive, I should have charged them $2,500 + $250, or $2,750, not $3,000.

I had put up list of my other rentals for people in need. Then I found out the city passed another rule. If someone is in an emergency rental and they need the rent money to rebuild their home, I can no longer evict again for a tenants not paying rent. What BS.

So this actor, who is now not paying rent. Not $2,750, not $3,000, not anything--I went to their employer who was going to us them in the next SW sage.. they got a call, don't pay Robert his rent, then their job officer is revoked. They were offered $1M for their next appearance. Not any more!

I don't agree with the broad, across the board statement that traditional landlord isn't working. There are too many variables in different markets that are at play.

For example. Locally, I don't have State/local government taking eliminating the consequences of bad actors through things like hiding court records, or making it illegal to use criminal records. Landlords are not considered the enemy by the Governor/Mayor and politicians like the left coast and some other areas.

There are no "licensing" and "inspections" of rental properties, just construction permits/inspections which everyone I know ignores. So no interference from the city. That significantly reduces the external negative factors from incompetent people with a god complex.

While there are a lot of deadbeats to filter through, there are a lot of qualified applicants with decent jobs as well. That's probably because my investment counties continue growing over 2% per year. Lots of new good paying jobs in town primarily from companies fleeing California. I can still fill a unit in less than 2 weeks with a good qualified applicant. Rents are still climbing but slower than before, and my profit per door is as high as it's ever been.

The area is off the scale on the conservative right at all income levels, racial, and social status. People here don't put up with a lot of BS and it's still a small percentage that have an entitled way of thinking. Christian values are still the bedrock of the community. This works well for a Landlord that offers a good product and is fair in dealings with people. A couple of the newer fancy complexes that are nickeling everyone to death with fees are not faring so well. They have a bad reputation and as a result, higher vacancy rates so that goes almost contrary to the statement made. Traditional values are still the norm here.

While I have changed a few minor things, my core RE business model hasn't changed much and it still works well.

I could see where my community could be significantly different than other areas of the country where social values have declined, incompetent local government has declared war on landlords, and politicians have thrown out logic in catering to special interests groups. After all it's always been said that "Real estate is local".

Sorry NE and JAC, but Robert bests you guys in the entertaining post department.

As for the original question. Evolving, with lots of credit to the discussions on this site. Trying to play by the municipal rules when reasonable but not acting in anyway that I wouldn't be afraid to defend. Lots of scenarios come across this board that help me try to plan in advance to make my life easier and the RE more profitable.

I am going to have to look at Brad's post.

Robin, I am experiencing a very long vacancy this year. Things are starting to pick up with the college students inquiring. I have been trying different things with the ad and such but not with much success. I am trying to figure better ways to handle the prescreen process as I have noticed a lot of hesitation of people to fill one out. Could be for many reasons but possibly mostly due to scams.