Working in the real estate
industry comes with an abundance of challenges that range from market
volatility to tough human interactions. Thus, those who are able to thrive in
such a fast-paced field are often people who have an incredibly firm grasp of entrepreneurship.
Nate Armstrong further labels this industry as one of the most challenging
markets due to a plethora of customer-service-based tasks that have to be
Fortunately, people like Mr. Armstrong have found ways to handle the market and become lucrative. In his specific case, he is currently an investor chair for a Chicago-based company called Home Invest. Prior to taking up this role, he spent a number of years working in other industries and handling roles like team management, worker productivity, business improvements, and more. Nevertheless, Home Invest is where Nate Armstrong truly achieved his full potential and reached a lot of his professional peaks.
What do you think is the most challenging aspect of being a property owner?
There are a few different challenges that make this profession somewhat
difficult. For me, the rate at which problems can arise always makes it quite
demanding. For example, you can have a perfectly calm and good morning one day
and then suddenly get hit with a dozen different issues in the afternoon.
These can range from things like tenant maintenance requests to complex property malfunctions where you have to get third-party contractors to come and help. So, the fact that you can never really predict what is going to happen can be quite taxing on your internal drive. I personally witnessed a lot of investors experience the burnout effect relatively soon after acquiring their first property.
How do you handle tough interactions with unsatisfied tenants?
Make sure to hear them out. Getting defensive and not even paying attention to their feedback is just going to lead to a never-ending conflict that is not going to be resolved. Instead, be professional and courteous to them as they are the ones who drive your business in the first place.
This means spending time talking to them and discussing the problem. Additionally, hear their input as to what may need to be done in order to overcome the obstacle. If this fails, try to steer the conversation in the right direction by suggesting a few different solutions that could work for them.
One of the common topics in this field revolved around rent prices. Do you think there is a way to increase rent without upsetting current tenants?
Well, not without upsetting at least a few people. This is especially true for property owners who have large buildings or apartment complexes that have a hundred or more units. In those cases, the goal should just be to try and upset as few people as humanly possible. The easiest way to do this is by being completely transparent. Meaning, you should disclose the factors that are making your operations unprofitable without an increase in the rent prices.
Additionally, you should let the tenants know that the prices will go up long before they do. Fortunately, a lot of tenants are locked in on current rates during their entire duration of the lease. So, you will not really be able to increase their costs until the next renewal period. At that point, however, they should be well aware of this change and get to decide if they want to stick with it or not.
What are some of the reasons that would make a spike in rent prices completely justified?
There are quite a few. If you are living in Miami, for instance, rent prices constantly go up due to the fact that the standard of living is always rising. This means that landlords are subject to increasing costs of operating. So, in order for them to maintain their income levels, they might have to raise their revenue through higher rent. Another common reason includes a high demand that needs to be reduced through higher prices.
How can property owners mitigate side effects of controversial decisions if they are unable to prevent them?
You could offer things like rebates, deals, discounts, and similar. Although doing so will undermine the original idea of increased profitability, it will help by keeping the same tenants around. So, you will be able to accumulate more rent in the long-run and those short-term expenses like rebates and discounts will be well worth it.