Tag Archives: rentalproperties

How to Ask ‘Why’ the Right Way

This simple question could become your business’ best frenemy. Teach agents how to use it wisely.

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“Why?”

It’s a preschooler’s favorite word and your agents’ best friend and worst enemy, or frenemy, when it comes to actually finding out why a potential buyer is looking for a home. A good agent will want to know why a client wants to buy or sell; a great agent will want to understand the reason behind the desire. So just asking why is a good start, but without digging deeper, it can come across as more of a business question than a desire to truly understand what the customer is thinking and experiencing. That’s what makes it dangerous. To truly understand a customer’s mission, agents must dig deeper.

There are two key ways you as a broker can teach agents to dig deeper. First, make sure your salespeople are looking to actually understand clients’ problems, not just sell them a solution.

In order to do this, they have to connect with customers on a personal level. Ask your agents to think about how different it feels when a doctor is sincerely interested in you, rather than just trying to get through the appointment so they can move on to the next patient. When a doctor takes the time, asks the right questions, and really listens to make sure they understand, you have confidence in them. When they take a sincere interest in you, you trust them and will follow their advice and leadership.

Another thought exercise to help agents understand this concept is to ask them about a friend or family member who is really good at helping them work through problems they’re trying to solve or a decision they’re trying to make. Chances are the friend or family member is truly interested in helping find the right solution. They become a partner in understanding, solving, and resolving issues. That’s the kind of connection agents can create with customers by seeking to understand their problem rather than seeking to sell a solution.

Once you’ve enabled your agents to see the difference between knowing and understanding their clients’ issues, you can give them the tools they need to act on it. Show them that “how,” “when,” and “what” questions will help them uncover the deeper “why” of any situation.

A depressed person doesn’t walk into a counselor’s office knowing why they are depressed. They’re there because they haven’t figured it out. So a counselor might ask, “When was the last time you were depressed?” Then they might ask what happened or what they were doing before they felt depressed. Similarly, agents may have to ask a series of “what” and “how” questions to uncover the why. They might ask what a customer likes or doesn’t like about their current situation or the options they’ve seen so far. From there, agents can summarize and recite the answers back to them, saying something like, “So it sounds like you’re looking for X, Y, and Z. Suppose you had that today. How would that improve your life?”

Agents who are skeptical of this approach might need an example to help them understand how powerful it can be when they help clients discover a deeper truth they didn’t even know about themselves. Let’s say a salesperson asks why a potential buyer wants a bigger backyard, the customer might say they want a pool. After asking why having a pool is important to them, the agent may find out that the family wants to have friends over so they can entertain and have fun at home. Simple enough, right? In times like these, agents have to go through a side door to find out the deeper answer and discover what’s truly important to their clients. For example, they might ask one more question: “How do you feel it will affect your kids’ lives to have a pool?” From here, customers may reveal they didn’t grow up with a house or atmosphere that was accommodating to friends and they want their kids to have a better experience than they did. This gives the agent a much greater understanding of what the consequences are if the customer doesn’t make a change. It may be too much pressure on the client to discover the deeper truths, and it’s an agent’s job to uncover it for them.

This approach requires staying focused on finding out the full story to truly understand the client’s mission to improve their lives. This information is one of the most powerful sales tools an agent has. But to discover the why, agents must do more than just ask why.

Credit to Jason Forrest
Jason Forrest is a sales trainer, management coach, member of the National Speakers Association’s Million Dollar Speakers Group, and author of three books, including his latest, Leadership Sales Coaching.
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8 Ways to Increase the Value of Your First Multifamily Investment Property

A person holding a miniature house and some dollar bills

Welcome back to the three-part series: A Beginner’s Guide to Multifamily Investing. If you haven’t already, read Part 1: How to Buy a Multifamily Rental Property.

Why would you want to increase the value of your small multifamily investment property after you emptied your pockets just to purchase it?

First and foremost, you may be able to increase the rent and/or your property value, either of which will further increase your total borrowing power. With value-add investment, you have the option to implement any of the following strategies at a leisurely pace to improve your property incrementally over time. The associated expense is simply the cost of opportunity.

1. Make Repairs and Improvements

If you have an outdated property that needs cosmetic work or modernization, if you revive the property, it is likely that you could dramatically increase the rent. The rental income from outdated units will land somewhere between modern rates and those from its original era. But an upgraded unit can fetch market rates.

My own strategy is predicated largely on acquiring historic rental properties that need to be improved and then bringing them to the top tier of my local market rents.

2. Increase the Rentable Square Footage

If there are common areas in your property, it is very difficult to capture their true value in rent. Whether you give the key to the hallway closet to a tenant or open that space directly into one of the units, increasing the square footage of personal area will also allow you to increase your rentable square footage and total rental income.

3. Subdivide or Combine Units

This strategy can add value if a property is not the right size or configuration to suit the demographic makeup of its market.

If you have a 3,000 sq ft unit, you might consider splitting it into two 1,500 sq ft units. They will be easier to rent because the total monthly cost will be significantly lower to each tenant and will subsequently reach a larger segment of the population. This will decrease vacancy and may also increase your Gross Scheduled Income.

4. Decrease Expenses

Accounting, advertising, insurance, lawn maintenance, legal fees, licenses, property management, repairs, and maintenance all add up. Anything that you can do to decrease any of these expenses without sacrificing the quality of the property is all money in your pocket.

5. Pass Expenses to the Tenants

Because gas, water, and electricity are all consumable resources that can be used variably by tenants, it is appropriate to have them pay as much of their utility expense as the market will bear in your area.

If the infrastructure of your property is not already metered separately, consider doing so. There is an entire industry built around sub-metering behind your master meter to help allocate expenses to your tenants fairly.

6. Decrease Property Taxes

Property taxes fuel the public improvements that make your market a desirable place to live; you want to pay your taxes to keep this cycle flowing, but you don’t want to pay more than your share. If you are able to convince your local appraisal district to lower its book value of your property on the tax rolls, it will noticeably decrease your overall property tax expense.

Evaluate the properties surrounding your house that are similar to craft an argument that illustrates to the authorities how they have over-assessed your property in relation to your neighbors’ properties.

7. Tap Additional Sources of Income

There are a number of strategies to develop secondary sources of income from your rental property. Premium paid parking is an excellent example, as one of your tenants will certainly want to reserve the lone carport in your fourplex for their most treasured automobile. Invariably, shared resources in small multifamily properties are underused or abused if they are not valued fairly.

8. Raise Rent

If your rental rates are significantly below the rest of the market, you may be able to simply increase the rent at the next available opportunity. Even a 3% annual inflationary increase will add up over the years.

In the upcoming and final article of A Beginner’s Guide to Multifamily Investing, we will explore how you can multiply your rental property income over time by recycling equity and leverage.

Credit to Ben Bowman

Ben Bowman is an Architect, real estate agent, investor, and author at AssetsandArchitects

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