Hi Reader,

Remember last week when I talked about the mistake of over-pricing rentals in hopes of making a bit more money? (If you missed that email, you can catch up here).

Today, I wanted to follow up on that and give you some real numbers (because I know how much you all love those!). 💸 Plus I want to show you how you can learn from my mistakes.

So let’s get back to it.

My first and only (🤞) eviction happened from this exact over-pricing mistake.

I listed a unit high in hopes to make an extra few hundred dollars per month. On top of that, I let myself deviate from my normal rental requirements because it was February in Iowa, and I got a little desperate to fill the vacancy.

Normally the property would have rented at $1400 per month but I found a tenant for $1800. Sounds great right? But pretty quickly the tenant had issues paying rent. Less than 6 months later she was evicted for skipping out on the last two month’s worth of rent. 😬

So the extra $400 per month I thought I was making? That quickly turned into a loss of thousands: the months she didn’t pay plus the damages she left behind. 😅

Let’s look at the numbers:

+$400 extra per month x 6 months of paid rent = $2,400 of extra income

But let’s add up the expenses:

$1800 x 2 months of unpaid rent = $3,600

Repairs from damages = $3,515

Eviction fee to attorney = $1,575

= $8,690

So I spent $8,690 to make an extra $2,400. Yikes. 🥴

After keeping her $1,800 deposit I was still out a total of $4,490.

I was able to pull the cost of this turnover up so quickly because I've also created a rock-solid bookkeeping system (after wasting $8,000 on a bookkeeper trying to catch up on over a years worth of transactions). If you're looking for a new bookkeeping system - check out Baselane! Baselane is an online banking platform built for independent real estate investors and landlords like you who spend countless hours doing financial busywork.

Here is how this story can help you…

The next time you go to list a property, remember that it’s better to have tons of great applicants who take great care of the property than to have one or two applicants willing to pay top dollar.

Focus on getting as many great applicants to choose from as you can so that you can put the best renters in your properties. Your future self will thank you.

Great tenants (and great screening) are the best way to ensure your properties stay in the best shape and make the most money. Plus let’s not forget how fulfilling it is to be an incredible landlord for an incredible tenant!

Cheers,

Grace (and Amelia + The WIIRE Team) 💗

P.S. Baselane helps ambitious real estate investors thrive by providing an all-in-one platform, integrating banking, rent collection, and bookkeeping. Save time, gain financial visibility and control to grow your rental business with Baselane. Sign up for free today.

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