{"id":1496,"date":"2025-01-30T09:52:25","date_gmt":"2025-01-30T17:52:25","guid":{"rendered":"https:\/\/www.managementone.com\/?p=1496"},"modified":"2025-01-30T09:52:26","modified_gmt":"2025-01-30T17:52:26","slug":"the-5-secrets-to-always-have-money-to-pay-for-repairs-or-vacancies","status":"publish","type":"post","link":"https:\/\/www.managementone.com\/the-5-secrets-to-always-have-money-to-pay-for-repairs-or-vacancies","title":{"rendered":"The 5 Secrets to Always Have Money To Pay For Repairs or Vacancies"},"content":{"rendered":"

Honey, we received the rent payment from our residents. All the bills are paid this month, let\u2019s take the kids and go to Disneyland this weekend.\u201d<\/p>\n

\"\"<\/p>\n

STOP!\u00a0 And let\u2019s see if that\u2019s in our rental property plan.<\/strong><\/p>\n

Don\u2019t fall into this habit. As landlords, it\u2019s easy to use the money that comes in your rental property to fund other stuff. Setting yourself up for stress when your rental property needs repairs or a major repair for $15,000, like a new roof.<\/p>\n

\"\"<\/p>\n

Here are the 5 Secrets <\/strong>for success and always having money for repairs.<\/p>\n

1) <\/strong>Set up a rental checking savings account. This account is separate from your personal checking account.<\/p>\n

* If you own more than one rental property you can combine them all in one account.<\/p>\n

2) <\/strong>When you open the checking account, open it with $1,000 to $5,000, at minimum, enough to make your mortgage payment.<\/p>\n

3)<\/strong> Use this account to pay mortgages, taxes, insurance, and repairs for rental properties.<\/p>\n

4) <\/strong>Have the rental payments deposited directly into this account. Avoid sending it to your personal account to prevent second thoughts on transferring the funds. \u00a0<\/strong><\/p>\n

5) <\/strong>When your taxes are completed, ask your accountant how much you got back because you own a rental property. Whatever the amount is, transfer it from your personal account into the rental checking savings account.<\/p>\n

As rents come month after month, year after year, they go directly into that account. The account grows. Before you know it, you have enough money in the account to pay for the new roof and take a vacation.<\/p>\n

\"\"
\n<\/strong><\/p>\n

Myth Buster:<\/strong><\/p>\n

\u201cIf I raise the rent, the resident will leave.\u201d<\/p>\n

We\u2019ve proven this myth wrong. Over the last four years, we\u2019ve been actively raising rental rates to compete with the current rental market.<\/p>\n

Annually, we raise rent on approximately 500+ properties. In 2024, 8 residents moved due to rental increases. That\u2019s only a 1.6% turnover. We are not price gouging; we are bringing properties up to the current market value within the amount allowed by law.<\/p>\n

For example, one property was rented for $1425 in 2021. In 2022, we raised the rent by $269, in 2023, we raised the rent by $125, and in 2024 we raised the rent by $200. Now, the property is closer to market value.<\/p>\n

We put another $3,228 into the owner\u2019s rental checking account in the first year alone. In the second year, we added $1500, plus the $3228 from the year before, to their rental checking savings account. In two years, we added $4,728.00 to their rental checking account. In year three, we added another $2,400. That\u2019s a total of $7,128 a year.<\/p>\n

Year one $3228 extra<\/strong><\/p>\n

Year two $3228+$1500= $4728<\/strong><\/p>\n

Year Three: $3228+$1500+$2400= $7,128<\/strong><\/p>\n

Over 10 years, that\u2019s an extra $71,280 in the owner's rental checking account from just rent.<\/p>\n

Not considering the amount you saved on your taxes from owning a rental property.<\/p>\n

The average is $2,500\u00a0 a year, so an additional $7,500.<\/p>\n

So, in just 3 years, they now have $14,628 for repairs, vacancies, etc.<\/strong><\/p>\n

The residents are still in the home, loving the home, and the owner has additional funds to do any repairs and even consider some improvements to the property.<\/p>\n

It\u2019s important to point out that raising the rent yearly comes with some responsibility on behalf of the landlord. As you are increasing the rents, if you want to keep your resident, you must also put back into the property.<\/p>\n

If your property were built in the early 1990s, it would likely have a wooden patio cover. The California sunshine beats up the wood; add the rain, wind, and termites, and that patio cover is probably on its last leg. Use some of the money from the rent increases to change the patio cover to an aluminum cover.<\/p>\n

Paint the exterior of the home to maintain its integrity. Putting back into the home shows the residents that you care about the home and value them as a resident in your investment property.<\/p>\n

\"\"<\/p>\n

Enjoy the Journey<\/strong><\/p>\n

It\u2019s not all about business. You need to take time to enjoy the journey as well. Once you\u2019ve established your rental checking account and have the funds from the property going to that account. You are no longer robbing yourself of your personal finances.<\/p>\n

Your rental property should be funding itself. If it\u2019s not, then let\u2019s talk. I am happy to review your situation and see what\u2019s working and what\u2019s not.<\/p>\n

Residents today will pay for value; they are not the residents of 30 years ago. We know we\u2019ve rented over 11,000 houses.<\/p>\n

Maybe you\u2019ve been a softy and not raised the rent like you should.\u00a0 Sometimes, we get so caught up in our everyday life and the grind that we forget to stop and evaluate things.<\/p>\n

Just like you must have insurance on your property, you have to properly manage the cash flow of your rental property, which we just went over.<\/p>\n

\"\"<\/p>\n

Over the last forty years, I have helped thousands of people with their journey of owning rental properties. If you\u2019d like to schedule a time to speak with me, contact Kristan Pennington at support@mgtone.com or 951-289-4828, and she will schedule a time for us to speak.<\/p>\n

My goal is for all our landlords to enjoy the journey of owning a rental property or properties. Have less stress, more fun, and build generational wealth.<\/p>\n","protected":false},"excerpt":{"rendered":"

Honey, we received the rent payment from our residents. All the bills are paid this month, let\u2019s take the kids and go to Disneyland this weekend.\u201d STOP!\u00a0 And let\u2019s see if that\u2019s in our rental property plan. Don\u2019t fall into this habit. As landlords, it\u2019s easy to use the money that comes in your rental […]<\/p>\n","protected":false},"author":4,"featured_media":1505,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[3,18,16],"tags":[],"class_list":["post-1496","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-landlord-education","category-maintenance","category-property-ownership"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.managementone.com\/wp-json\/wp\/v2\/posts\/1496","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.managementone.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.managementone.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.managementone.com\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.managementone.com\/wp-json\/wp\/v2\/comments?post=1496"}],"version-history":[{"count":0,"href":"https:\/\/www.managementone.com\/wp-json\/wp\/v2\/posts\/1496\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.managementone.com\/wp-json\/wp\/v2\/media\/1505"}],"wp:attachment":[{"href":"https:\/\/www.managementone.com\/wp-json\/wp\/v2\/media?parent=1496"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.managementone.com\/wp-json\/wp\/v2\/categories?post=1496"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.managementone.com\/wp-json\/wp\/v2\/tags?post=1496"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}