But we have to address tenants since our next challenge is to configure one rental so it produces enough to replace a middle-class job.
According to CNN Money, for Sacramento, California, you need a $3,000 monthly cash flow to be middle class. So that’s my target number.
Common Tenants vs Niche Tenants
Let’s compare Craigslist tenants to niche tenants.
Traditional landlords cater to regular people that I call Craigslist people. These people want to lease an unfurnished home for one-year or more.
And there’s nothing wrong with Craigslist people.
If you want to fill your vacancy fast, you can always serve Craigslist people. The business practice works.
However, since I’m aiming for mega-profits, I’m not considering Craigslist people.
They have plenty of traditional landlords to serve them.
And because of the abundance, Craigslist people pay the least. Supply and demand laws at work…
SIDE NOTE: The abundance of traditional rentals is one of the reasons traditional landlording is the least profitable way to operate.
If you want higher profits…
If you’re interested in earning above average profits, you’ll need to steer away from Craigslist people.
You’ll need to create a Niche Rental that attacks and retains customers who’re willing and able to pay you more.
Attracting Niche Tenants
One way to steer yourself to more profits is to customize your rental. Create value for a particular group of tenants.
Especially if you can create a higher quality, less-expensive option for what a tenant is currently paying for.
A Niche Rental might include:
- Wheel chair ramps
- Tools to improve/aid job performance
- High-performance stoves (i.e., Wolf)
- Amenities to assist sleep (i.e., black out curtains)
- Mud rooms to wash off pets
- etc. you get the idea.
Start Asking These Questions
Before you you get another move-out notice, ask yourself:
1 – What businesses and/or trade schools are near my rental?
2 – What can I do to attract a group that I want to serve?
3 – How can I create value that people will pay extra for?
If you can find answers to these questions, then you’ve found a way to larger cash flows.
We go into much more detail on creating niche rentals in my Niche Rentals course. Check it out and send me an email if you want to enroll even if the course isn’t offered.
But don’t wait. Start thinking now!