Real Estate Customer Life Cycle

Recently, my wife and I have been searching for new tenants for our rental property.   That’s an irritating customer cycle.   We’ve had more no-shows at the showings than we’ve had prospects show up.   Most people who call seem to think that the rent on a 2 bedroom, 1.5 bathroom house with a big yard and a 3 car garage 5 minutes from downtown Minneapolis is going to match their little subsidized Section 8 apartment.

Not going to happen.

So we keep looking.  In the meantime, it’s interesting to look at how a real estate trainer breaks down the life cycle of a customer.


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So You’re Getting Evicted…

Last week, I had the opportunity to visit eviction court, though not for anything having to do with my properties.

It was an interesting experience.  Eviction court is a day when nobody is at their best.  Landlords are fighting to remove bad tenants, sometimes questioning their desire to be a landlord, while tenants are fighting to keep their homes, often with no backup plan.  Occasionally, you get someone who just wants to get out of their lease because the landlord is a creepy peeper who digs through the dirty laundry.

Nobody goes to eviction court in a good mood.

If you ever find yourself in eviction court, here are some things to remember:


  • If you don’t show up, you lose.  Period. Landlord or tenant, judges don’t like waiting around.  You will get the worst possible outcome if you stay home.
  • The first day is a hearing.  The judge will either accept a settlement between the two parties, or he’ll check if there is a valid reason for a full trial.  The trial will be schedule for another day.  In Minnesota, that happens within 6 days of the hearing.
  • Don’t make faces at the other side while they are talking to the judge.  Do you want to go to jail for being a smartass?  It’s called contempt of court.


  • Fix the mold, rot, and other habitability issues.  You’ll have a hard time getting your rent back if you are a slumlord forcing your tenants to live in a biohazard.
  • If you’ve got an automatically renewing lease, don’t file the eviction notice with the renewed lease for violations that happened under the old lease.    If you do, you’ll be handing a win to your tenant.
  • Make sure you lease has an eviction clause.  If it doesn’t, you may not have the right to kick out your tenant for any reason.
  • Your tenant’s dirty underwear is not a toy for you to play with.  Creep.


  • Pay your rent.  If you are withholding rent to get something fixed, you’ll be expected to put that in escrow the day of the hearing, so don’t spend it on vodka or a new stereo.
  • Read your lease and the filing.   It may have a backdoor that lets you escape the eviction.
  • Try not to get evicted.  An unlawful detainer can make it hard to rent again for a couple of years.
  • Dress nice.  I’m amazed by how many people showed up in ratty jeans and uncombed hair.  Look professional.  The judge will appreciate the effort.

All in all, it’s best if landlords and tenants try to keep each other happy.  The whole business relationship will go much smoother if you do.

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Becoming a Landlord

For those of you just tuning in, my mother-in-law died in April.

Since then, we’ve spent nearly every available moment at our inherited house, digging out and cleaning up.

My mother-in-law was a compulsive hoarder.   I’m not going to get into the details of her compulsion, but we have–so far–filled a 30 yard dumpster.  For perspective, that’s big enough to fit our Ford F150.

Now that the house is approaching the point where we can begin updating and remodeling, I’ve been looking into the requirements to rent it out.

In my city, I need to get a business license that costs $95 per year.   This comes with a requirement to allow the city to inspect the property every two years.

Before they will issue the license, I have to take an 8 hour Minnesota Crime Free Multi-Housing Program class that covers tenant screening, lease addendum, evictions, and “etcetera”, followed by a physical audit of the property to ensure minimum security standards.

The lease addendum basically reads “If you are loud, obnoxious, threatening, criminal, intimidating, or doing/dealing drugs, you will be evicted.”

The actual costs to become a landlord are going to be:

  • Something under $100 for my wife and I to take the landlord class.  The price varies from free to $40, depending on the hosting city.
  • $95 per year for the privilege of using our private property to conduct a private transaction with a private individual.
  • The remodel.  I don’t know what this is going to cost, yet.   There’s an unfinished bathroom in the unfinished basement.  I’d like to finish both of those, though the basement will never hold a 3rd bedroom, due to code.  The entire house need to be painted and have the trim replaced.  The dining room and hallway have hardwood floors, hiding under linoleum that was never properly put down.   We may need new windows.

If possible, I’d like to keep the project under $20,000.   Since we’re not adding a 3rd bedroom, or tearing out the kitchen cabinets, it should be possible.

In the meantime, expect to see a bunch of remodeling and renting related posts coming up.

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The Benefits of Brick and Mortar Investments

These days, anyone can be an investor. If you have shares or managed funds, you’re in the loop. But for an investment existing beyond numbers, property takes the front row seat. More and more Australians are choosing to park their money and savings in bricks and mortar with the hope of boosting their wealth over time.

In 2010 the Index of Consumer Sentiment revealed that property investment ran a close second (21.7 per cent of respondents) to bank account deposits (29.2 per cent of respondents). Similar trends have continued into 2011.


There are pros and cons to every ‘money sinking’ decision but let’s first look at some of the benefits of property investment.

  • Property is a more stable than shares and other intangible investments at the mercy of ever changing markets.
  • There’s always the chance that your property will increase in value, leaving you with capital growth.
  • Rent becomes an extra income and helps repay whatever loan you take to buy the property in the first place.
  • The interest on investment properties loans are tax deductible.
  • Your investment exists in real life.


That’s not to say there aren’t some cons to mull over. There are, after all, always two sides to every story.

  • Rental income goes some way in filling in those repayments but doesn’t always cover it all.
  • You are at the mercy of interest rate hikes and trends in the property market.
  • Tenants come and go and there might be times the property stands empty.
  • The entry and exist costs are high.

Luckily, taking the rose coloured glasses off and facing these downsides is made easier by dependable mortgage and lending companies. Home loans have always been enmeshed with the idea of the “Great Australian Dream” and for anyone interested in property investment, it’s a well-trodden consideration.

Another two factors to consider when deciding on property investment, and related home loans, are where and what to buy. Everyone will have an opinion on this but wide research should be the first port of call. To help you out, there are a number of online resources at your disposal.

Where? In a nutshell, you have to be thinking about high growth areas, appealing features like proximity to transport, vacancy rates and possible changes to the suburb in the future.

What? Everyone has specific taste but you’ll be doing well if your property has wide appeal. You don’t want to alienate segments of the market like singles or retirees. Most importantly, choose somewhere with low maintenance costs and upkeep.

Keeping all this in mind should stand you in good stead. Happy brick and mortar hunting!

Post by Gemma Deavin.

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