Get Out Of The Appliance Business

Unless you are entirely furnishing efficiencies, do not supply furniture or appliances in the inner city units. In other words, one bedroom units and up are taboo when it comes to any furnishings.

Efficiencies are virtually impossible to rent unless they are entirely furnished with appliances and usually with utilities included.

On the other hand, tenants who rent one bedroom units and higher can fend for themselves and come up with something to furnish their units. Appliances for the one bedroom units are indeed difficult, but the tenants do manage to acquire them just the same.

On a ten unit building that I own, I have found myself buying at least three refrigerators per year. The tenants have always managed to rip off the door handles. In fact, roaches actually stop refrigerators from working by crawling into the motor area. Anyhow, the refrigerators are either too large or too small. Tenants always want someone else’s when their neighbor moves out.

Invariably on Thanksgiving Day, someone’s oven doesn’t work. Of course, they’ve known it for months, but waited until this day to tell you.

I did something really smart this summer. On all of the units, one bedroom and up in that ten unit, I sold the appliances to the tenants for one hundred dollars for each pair. I provided receipts and stated, “When they break down, throw them away and the replacements are your responsibility.”

Last month, a tenant replaced a refrigerator herself. Granted, she bought a used one, just like I always had, but it wasn’t at my expense.

I find that cutting expenses is just as good as raising rent. It’s like the government cutting a program and not raising taxes.

My tenants agreed that one hundred dollars for each pair was a good deal. They questioned my motivation. I answered, “I’m getting out of the appliance business; I just rent apartments.”

H. Roger Neal™