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The Art of Finding Ideal Tenants: Why It Matters More Than You Think

markm@masoncompany.com (Mark Mason) — Mon, 14 Jul 2025 20:54:35 GMT

The Art of Finding Ideal Tenants: Why It Matters More Than You Think

Real estate investing isn’t just about picking the right property or securing the best financing. One of the most critical elements to long-term success is finding the right tenants, and a lot of investors often overlook this step when considering an investment. At the end of the day, the tenants that live in your property can be the single most important decision impacting your cash flow, operational headaches, and overall investment performance.

The High Stakes of Tenant Selection

Your rental property is a business, and your tenants are essentially your customers. But unlike other businesses, once you’ve selected a customer (tenant), you’re locked into a legally binding relationship for months or even years. A poor decision here can wreak havoc on your bottom line.

Bad tenants can:
- Miss rent payments or pay late

- Consume your time with constant nuisance
- Cause excessive wear and tear or damage
- Violate lease terms, causing neighbor complaints or legal issues
- Increase turnover rates, leading to increased maintenance costs

Tenant Turnover: The Hidden Profit Killer

Tenant turnover is one of the largest expenses in real estate. Every time a unit turns over, you deal with:

- Lost rent during vacancy
- Make-ready repairs and cleaning
- Leasing commissions or advertising costs
- Time spent screening and onboarding a new tenant

- And if the tenants are really bad, a complete unit renovation

According to industry data, the average apartment turnover can cost anywhere from $1,500 to $4,000 depending on the unit and market. This is why retaining quality tenants should always be a top priority. In single family homes this number is easily 2-3x bigger per turnover. Do you understand now why tenant selection is so important. If you do the math, a 40 unit building filled with bad tenants can easily be $80k per year vs as low as $25k per year with quality tenants. $65k a year at a 7 Cap is also $900k in value, wow!

What Makes a “Good Tenant”?

A good tenant isn’t just someone who pays rent on time (although that’s crucial). Ideal tenants:
- Follow the lease terms and respect the property and the other tenants
- Communicate issues early and work with you
- Stay long-term, reducing turnover and vacancy
- Create a stable environment for other tenants, maintenance workers, and neighbors

At Legion Properties , we employ a thorough screening process that includes background checks, credit checks, rental history reports, income verification, and personal interviews when necessary. These critical steps and should never be skipped by any landlord or property manager

Your Screening Process is Your Filter

This is not an area to cut corners. A robust screening process may take more time upfront, but it saves countless hours and dollars down the line. Think of it as a filter that protects your investment. Create criteria, stick to it, and don’t make leasing decisions with emotions, save those for your personal decisions.

Retention Starts Day One: The Move-In Process

A smooth move-in process sets the tone for the entire lease. Ensure the property is clean, everything functions, and the tenant feels welcomed and respected. Remember, you never get a second chance to make that first impression. A great start builds trust and can significantly reduce turnover rates, especially if you can avoid the need for any repairs / maintenance in the first month. If you don’t have a thorough pre-move in checklist, take this as your que to go make one… yesterday!

The Bottom Line

The right tenants make your life easier and your investment perform better. The wrong tenants? They create stress, expenses, and hog your time. Don’t underestimate this part of the real estate game. Whether you self-manage or hire help, tenant quality is everything.

And remember, if you're looking for help finding and keeping the best tenants, Legion Properties is here to help. Based in the Twin Cities, we specialize in property management services tailored to investors like you. Let us help protect your investment and grow your portfolio the smart way.

Top 5 Tips for Maximizing Rental Property ROI

Wed, 05 Mar 2025 22:49:24 GMT

Top 5 Tips for Maximizing Rental Property ROI

1. Increase Rents Strategically

While tenants might initially resist rent increases, there are solid reasons behind this strategy. Keeping rents below mark et value can lead to financial strain, especially if the area becomes subject to rent control. Additionally, lower rents can limit your ability to cover maintenance costs, such as replacing a furnace. Consistent, reasonable rent increases help maintain your investment and ensure your property remains in good condition.

2. Maintain Open Communication

Effective communication with your tenants is crucial. If you only interact with tenants when issues arise, you might miss early signs of problems. Encourage tenants to report minor issues, like a leaking dishwasher, before they become major repairs. Open communication also prevents unauthorized changes, such as unapproved painting projects.

3. Conduct Routine Site Visits

Regular property inspections are essential for identifying maintenance issues early. While respecting tenant privacy, these visits allow you to address minor problems before they escalate and plan for future repairs. Routine visits also demonstrate your commitment to maintaining the property.

4. Stay Competitive with Mark et Trends

Keep an eye on local rental mark et trends. Compare your property’s features and rental rates with similar properties. Staying competitive ensures you attract and retain quality tenants.

5. Utilize Professional Property Management

Hiring a property management company can save you time, stress, and money! Professional managers handle everything from screening potential tenants, scheduling routine maintenance to emergency repairs, and ensuring your property is well-maintained and your tenants are satisfied.

Scouting for the Perfect Property: Key Factors to Consider Before Buying

markm@masoncompany.com (Mark Mason) — Fri, 14 Feb 2025 18:09:34 GMT

Scouting for the Perfect Property: Key Factors to Consider Before Buying

Finding the right property can oftentimes feel like a lost treasure hunt. That said, it is a critical step in your real estate investment journey; understanding the factors that go into selecting the right property will ensure you start on the right foot. Here are some key factors to consider before making a purchase:

The Importance of Buying Right: The adage "you make all your money when you buy" holds true. The market will dictate the rents and the property won't change from when you tour it to when you need to make repairs you should have caught during the inspection. Ensure you buy at the right price with the right assumptions, using the most accurate historical expenses.

Location! Location! Location!: You need to buy where people want to live. Ensure your chosen location has a growing population, rising incomes, and an overall positive outlook. Research the area's crime rates, demographics, and future outlook. A growing community with strong infrastructure will lead to higher demand for rental properties, higher rents, lower turnover, and more income for you!

Understanding the Greater Area: Take the time to research the area’s future. Are businesses growing there? Are schools and transportation systems being expanded? If you plan to hire property managers, contractors, or other local professionals, consider their preferences and whether they’re comfortable working in the area.

Demand and Vacancy Rates: You Need People! Buy properties in high demand, low vacancy rates, and high absorption rates on new construction. Look for locations where people want to live and where there aren't endless options for apartments or homes. You do not want to struggle with getting market-rate rents or having extended turnover times.

NEVER skip the Inspections: Investing in a property without a thorough inspection is a huge mistake. Get an inspection and know the property inside and out. If you're not an expert, hire one to help protect your significant financial investment. If you're looking at multi-family, walk Every. Single. Unit.

Look For Hidden Gems: Keep an eye out for unique opportunities that could add value to your property (or hurt your property). I once bought a property just before a federal grant rebuilt the entire road, added new sidewalks, and improved utilities—all at no cost to me. (WooHoo!) These can positively impact your property's value and future rents. These “Black Swan” opportunities can be a game-changer, hopefully for the good, but if a sewage treatment plant is planned for next door in 5 years, you will want to know that too!

Ahh, The “Performa”: Never buy based on the listing broker's Performa. It's often too optimistic, and I am using it graciously to all the brokers. You can trust much of it, but verify everything and use your own numbers. I can almost guarantee you will be changing some of the assumptions made by the listing broker. Utilize your broker and property manager to verify your assumptions and modifications to the Performa before making a purchase decision.

Paying for Completed Work: If the asking price is based on rents that "could be" achieved after renovations, be wary. Pay a fair price for the property's current condition, not what the seller hopes to achieve. If you plan to complete renovations, ensure you get a discount to account for the work you'll need.

Finding the perfect property requires more than just an eye for opportunity—it’s about due diligence, patience, and a solid understanding of the market. These guidelines are a brief start; when you combine them with your team, you’ll be in a much stronger position to make an informed investment. Remember, real estate is about long-term success, so take the time to find the right deal that sets you up for success.

Kickstarting Your Real Estate Investment Journey: What Every Investor Should Know

markm@masoncompany.com (Mark Mason) — Fri, 14 Feb 2025 17:57:56 GMT

Kickstarting Your Real Estate Investment Journey: What Every Investor Should Know

Starting your real estate investment journey can feel both thrilling and daunting, but the reality is that successful investors are made through careful planning, execution, and learning from experience. Whether you’re about to purchase your first property or looking to expand your portfolio, there are several fundamental principles to understand to set yourself up for long-term success. Before diving into real estate, let’s dive into the key factors every investor should consider.

Understanding Your Risk Appetite: Before diving in, take a moment to assess your risk tolerance. Are you comfortable with high-risk, high-reward investments, or prefer safer, more stable options? Knowing this will guide your investment choices, so be honest with yourself and what you're willing to take on.

Financing Your Investment: Do you have the necessary funds or access to financing for your first or next deal? Securing financing is crucial for getting started and growing your portfolio. It will dictate the size and timing of the investment you can make. Most importantly, being undercapitalized almost certainly leads to unnecessary stress and mistakes.

The Importance of Scale: As you expand your investments, scale leads to redundancy, and redundancy is your friend. With multiple properties, you can better absorb unexpected vacancies or maintenance costs. Many investors start with single-family homes, while seasonal investors often move to multi-family properties or other commercial real estate asset classes like retail, office, or industrial.

Cash Flow is King: Unexpected expenses and repairs are inevitable in real estate. Having reliable cash flow is crucial to covering these costs without getting overwhelmed. Always plan for the unexpected, and make sure your property generates enough income to weather financial bumps in the road.

Building a Trusted Team: Don’t go at it alone! Surround yourself with professionals who are experts in their field. This includes property managers, contractors, real estate brokers, accountants, attorneys, and commercial bankers. At Legion Properties, we have great connections and would love to serve on your team.

Knowing Your Limitations: Recognize your strengths and weaknesses. Delegate tasks outside your expertise to trusted professionals to avoid costly mistakes. Nothing will hurt more than looking in the mirror and saying, “I Told You So.”

Buying Right : the old adage is true: “You make all your money when you buy”. It's essential to purchase properties at the right price. Avoid overpaying by conducting thorough market research and due diligence. Stick to your criteria and utilize your team!

What DOES a Property Manager DO anyway?

Fri, 14 Feb 2025 17:09:08 GMT

A Day in the Life of a Residential Property Manager

Have you ever wondered, "What does my property manager do? Except continually raise my rent and take FOREVER to fix things?"

My name is Adrienna, and I'm the senior property manager for Legion Properties. I have managed investment properties (rentals) for the better part of 15 years. Being a property manager is not for the easily offended. It’s a demanding, often thankless job requiring thick skin, endless patience, and expert multitasking. Give me a quick minute, and I'll break it down for you (quickly - I promise - this will be an easy read, as I have tenant issues that need attending to) - and hopefully, at the end of this, you'll have some further insight into what your property manager does for you regularly.

Morning: Communication & Collections The day starts with responding to emails, texts, and calls from tenants, owners, and vendors. Reviewing any maintenance requests that came in overnight - assessing their urgency status, unpaid rent follow-ups, and lease inquiries all demand attention in the first part of the day - this is the quietest part of my day. Keeping payments on track is crucial, sometimes requiring legal action.

Midday: Maintenance & Showings Coordinating repairs is a constant juggling act—scheduling vendors, ensuring compliance from those vendors, communicating and coordinating with tenants to have those repairs scheduled, to ensure appliances don’t stay broken forever (we promise, we’re working on it!). Meanwhile, showings must be scheduled, and applications must be processed to keep vacancies low and landlords happy.

Afternoon: Compliance & Market Research we analyze rental trends and adjust pricing to keep properties competitive. We also handle city licensing to ensure properties meet all regulations, avoiding fines and legal trouble. Usually, there is more follow-up with emails, texts, and phone calls to schedule things that need added attention, follow-up, or another vendor to address the issue.

Evening: Wrap-Up & Planning As the day winds down, communication is prepped and sent to owners of the recent on-goings to their investment property, as well as attacking any lingering issues. Emergencies? They don’t wait for office hours.

The Bottom Line Being a property manager means balancing tenant issues, vendor coordination, and owner expectations—all while sticking to a budget. It’s not glamorous, but it keeps the real estate world spinning and renters in quality housing! We are not perfect; we are often overwhelmed and understaffed. The average property manager oversees anywhere from 60-100 (or more) rental units! So, if you haven't heard from your property manager lately - I assure you - they're not sitting around twiddling their thumbs - I assure you - they're staying QUITE busy (and they'll respond to you as soon as they are able!) ��

Are you thinking about hiring a property manager? Contact Legion Properties today to learn how we can help you manage your rental property stress-free!