Progress Report: I’ve only created $30 of monthly savings so far. This is a long ways away from my goal to reduce expenses by $100 per month, but I am moving in the right direction.
I would love to brag that I invented an amazing cost-cutting technique, but the tactic I used is pretty underwhelming. I simply applied the principle Jack Canfield describes in The Aladdin Factor [affiliate] – I unapologetically asked for what I wanted.
I asked my tenants to donate $10 per month towards the Wi-Fi service I am giving them. Three of my eightplex’s tenants responded by adding $10 onto their monthly rent checks.
Now, I didn’t raise their rents, which would have broken my self-imposed rule of not to inconvenience my tenant in my quest to reduce expenses. These tenants are making voluntarily donations. But this exercise did teach me that my market will permit me to increase my rents by at least $10 per month per unit!
That tidbit of information is worth $9,600 of additional equity to me!
($10/month * 8 units * 12 months/year) / 0.10 capitalization rate
Who knows what cost-saving/income-producing ideas you’ll stumble on during your quest to save $100 per month. You’ve got to play to win, come on get in the game! Make a public declaration that you’re up to the $100 Expense Reduction Challenge.
How to Use the Aladdin Factor to Reduce Expenses
You could ask:
1 – Your tax assessor to give your property a lower appraised value and reduce your tax bill.
2 – Your insurance agent:
a) not to automatically increase your premium and
b) for suggestions on how to get preferred rates and discounts.
3 – Your garbage service provider to alter your service with a smaller garbage bin or less frequent pick ups to reduce your utility bill.
4 – Home Depot or credit card companies to lower the interest rate on your revolving credit.
5 – Your tenants to donate towards something you’re giving them complimentary.
All of these things could help you become the Biggest Expense Loser! So far, Deborah B. holds that title.
This is far from a complete list, but that’s where you come in. Please leave a comment or send me an email with your ideas on what else landlords could use the Aladdin Factor on?