Now is time for a new generation of landlords. The Echo Boomers are coming to the innercity and skilled landlords stand to prosper. Echo Boomers, the children of baby boomers, are coming because gasoline is getting too expensive and they want more walkable communities. They’re coming because they have lived though the housing bust and are in no hurry to buy a house. They are also coming because, in many ways, they want the opposite of what their suburban parents had.
Wouldn’t it be wise to buy a multifamily apartment in the most affordable part of town, stake your claim, and change it into a great neighborhood? That would be an excellent emerging market investment play – the ultimate buy low and sell high strategy.
Well this is the work of Leading Landlords. They buy into an area that may be plagued with crime, clean up the property, and reconnect the surrounding neighborhood. They go beyond the typical duty of being a landlord by networking and championing neighborhood causes in a way that ignites neighborhood pride, revitalize the area, and appreciates their property.
Does this sound impossible? It’s really not. It’s just a matter of applying best practices and social media tools to age-old neighborhood dysfunction problems. If Facebook and social media tools can be used to topple a dictator in Egypt, those tools can certainly be used to transform a neighborhood.
It might be instructive to contrast a Leading Landlord with a stereotypical slumlord. Both types of landlords work in the same neighborhood and face the same challenges, both focus on lower end housing, but that’s where the similarities end.
They manage their properties differently. A slumlord doesn’t make improvements and doesn’t address deferred maintenance. A Leading Landlord looks for cost-effective improvements and invests in upgrades that improve their net operating income .
Slumlords don’t reach out to their communities or care if they are housing a neighborhood menace. Leading Landlords are connected to their community, attend neighborhood meetings, and work with local police officers to ensure illegal activities stop.
Slumlords and Leading Landlords have different financial goals. A slumlord looks to make a little money each month. Leading Landlords look to build equity each month. They look for big returns when they sell; not small profits each month.
Leading Landlords seek to cash in on the price gaps or “rewards” for healing/curing dysfunctional neighborhoods. This “reward” can be as much as $300,000. For example, as I write today, in Sacramento, two fourplexes with similar floor plans and maintenance issues have a $146,000 price difference and two 8-plexes have a $294,000 price spread. Of course the difference is based on – location, location, location. However, the state of the “location” is constantly improving or declining; it is not static. The “location” is a physical representation of decisions made by those who championed that neighborhood. So the $294,000 spread can go to the owner that buys the 8-plex and transforms the neighborhood.
Leading Landlords aren’t the people you read about it typical real estate investment books. Our goal at www.LeadingLandlord.com is to bring their works to the forefront and shine a bring light on their best practices so that they may be replicated. People living in bad neighborhoods are waiting for transformational leaders. Clearly – it is lucrative to follow this path. So…what are you waiting for? The Echo-Boomers are coming!
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