No room at the Inn - 100% Occupancy - for how long and at what cost?

I LOVE the idea of being full.  It makes me feel like I know what I am doing, like I am a master marketer, and clearly that I must be a dream landlord/owner or these guys would all be living elsewhere.  I mean I get it that I only own 32 units, but I am the man...right?

...right.

Let's take a look at what 100% really means.  Well for one, it means I wasn't at 100% before.  Oops.  And why is that you might ask?  I have never in my entire life turned so many units over from so many less than excellent tenants.  75% of the vacancies that I had to fill I caused myself by "inviting", "asking", "telling" and in two instances "forcing" the tenants to leave thus creating the vacancy.

Why is this?

Well, I have fairly strict rules in place regarding people living in our buildings that are not on the lease.  That can't happen.  So when the new roommate fills out an application to be put on the lease we find that they are fresh out of prison for aggravated assault or criminal sexual conduct, etc., etc.  Not the kind of folks that I welcome.  When I ask them to leave, the tenant they wanted to live with inevitably follows.

And, I have fairly strict rules in place regarding noise levels.  If I witness it or receive multiple complaints for more than one of the neighbors, a warning goes out in writing and if it happens again, an eviction notice goes out.  It is in the lease, don't be noisy.

I also like to think outside the box.  In my buildings, if you don't pay your rent and no  arrangements have been made with me, you are asked to leave.    I know.  Genius stuff right?  It came to me in a dream.  "Rent Optional" is not a phrase you will find in my leases.

It might be the times, it might be the locations, it might be the buildings but I would choose to believe it is me that is causing all these vacancies.  After all, it was me that put every single tenant (except some from the last building that I acquired) into these buildings, right?  What is wrong with my filter that after less than a year, there is so much failure?

I stopped remembering I was running a business.  I stopped remembering that there are loyal good people already in my buildings that are trusting me to replace that last yo-yo in unit #17 with someone that isn't.  And the new folks hopefully are expecting the same, that there isn't a box of bricks on the outside and rocks on the inside waiting for them at each of my buildings when they move in.

We talked at length about this before we started to reload our buildings.  We dolled them up like never before.  A lot of new carpet, vinyl, counter tops, garbage disposals, windows blinds and new paint later and we are full...all over again...just like we were nine months ago. 

And what did we decide to do different?  Simple stuff.   We follow our rules instead of talking about them.  Due Diligence shouldn't only be used when you acquire a building.  It should be used when you are acquiring tenants as well.  Three of the tenants that left had been with me for years, but they got comfortable, got sloppy and so did I.  Not smart, sets a bad precedent and a horrible example for any new tenants.  Apartment buildings are like sports teams.  You need veterans to set the example for the rookies.  If your veterans are a bunch of "YAHOOs" your team is going to struggle.

So, the lesson learned here is this.  If your vacancy rates are higher than you like, take a look at who you are letting in to begin with, check your criteria and see if you would still rent to them today.  Also make sure you aren't cutting corners meant to be in place for a reason in order to soothe or provide favor to certain tenants.  There are ways to do that and not jeopardize your business.

What I DON'T want to do is this all over again in a year from now.  And if I do, I have nobody else to blame but myself.  And I wouldn't have it any other way.

Talk you with you later.  Good luck and don't ever forget how much fun this whole thing really is.

Doug.