Category Archives: MAANLord’s Tips and Tricks

It’s Not About the Journey, It’s About the Destination

What does it mean?

The Maanlord has been asked by a couple people so far what exactly this tag line means that ends each one of our blog posts. Ever hear that oft repeated adage, it’s about the journey, not the destination? Well in the world of real estate investing, particularly that part journey  destinationwhich involves long term holding and landlording, the opposite is actually true. The destination is what it is all about, not the journey. I’m not discounting that in some instances the role of landlord can be very rewarding and fulfilling, but more often than not, landlording is a frustrating and nerve wracking experience, even for the most experienced and efficient property managers and landlords.

the-light-at-the-end-of-the-tunnel destinationWhat we relish is the concept of keeping our eyes on the prize, the fact that someday, we will be able to either liquidate our mostly paid for or appreciated portfolio, or we will have a nice little nest egg of free and clear properties, that we can really have the pain managed away from us and live a life of real passive income.  And for the more deftly acquired properties, there is actually a good amount of cash flow and depreciation write-off in the now as well.

The key to surviving is to work smarter and not harder, to do things and effect policies and guidelines in our landlording duties that keep our expenses down, and maximize our rental income over time. That involves writing as bulletproof lease as possible, having a solid Leaseapplication and deposit process that minimizes rental losses and maximizes collections and garnishments, outfitting your rentals to be durable, and sticking to a set of set in stone rental policies and procedures to reduce drama and keep everything strictly business. If you need help with this, that’s fine, we all needed help or advice at some point.

That’s why this blog exists. But if you want MORE help, through the Maanlord’s investment arm, Equity Momentum Investments, we do offer landlord coaching to turn that landlord frown upside down and get you as close to a stress free and cash flowing situation that is possible for your case.  If we can help you at all step back from the cliff and set goals, priorities and establish a solid core of policy and procedures, please contact us directly at

About the author: Jeff Sullivan has been buying, holding and selling investment property for over ten years. He currently has over 40 units in his private portfolio and consults others on doing the same through his Real Estate Investment Consultancy, Equity Momentum Investments. He can be reached at

Eliminate Disputes over Spoiled Food Loss with Lobster Claws

Whoops…I meant with a Lobster Clause.

You may not have been there before, but eventually you will, and sooner rather than later if you own multiple properties. Scenario:

Tenant’s out for the day, or away for an extended period. Electrical malfunction results in the fridge circuit going down, and by the time the tenant returns, all their food has gone bad. It could even be that the fridge went on the fritz, and by the time you could get another one over there or get it repaired, all the food has gone bad.

lobster clause
“I’m not sure that covers it”

And they want YOU to pay for it all.

Oh, and by the way, they just went shopping.

Oh, yeah, and all those groceries rang up around $300.

If you haven’t clearly defined in your lease who bears responsibility for food spoilages as a result of legitimate equipment failure, then you are leaving the fridge door open for all kinds of claims of iceboxes full of shrimp and caviar that will be demanded to be reimbursed for spoilage from your tenants.

Lobster Clause
Didn’t your Mom ever tell you not to leave the fridge door open!?!

There are a few ways to insure that when a tenant comes a knockin’ for money for food loss, your budget won’t take a rockin’.

A few years ago, we built into our leases language that stated very clearly that failure of appliances was commonplace and unexpected, and tenants should be prepared to relocate food from refridgerators in the event of equipment failure. Another thing we did was to inform them that loss or damage of ANYTHING in their unit was to be covered under an appropriate renter’s insurance policy. We even pointed them to several insurance company’s in their move-in package so that they couldn’t claim later they couldn’t find anyone that sold those policies. Now, we have even gone the route of requiring rental insurance policies for certain properties (mainly newly renovated ones), and mandated that we be added as an additional insured until their move-out, but that is a topic for another post.

"Oh, Shrimp in Lobster sauce Lean Cuisine meals, sorry"- lobster clause
“Did I say REAL Lobster? Oh, I meant  Shrimp in Lobster sauce Lean Cuisine meals, sorry”

Any type clause in a lease designed to (justifiably) deflect liability for food spoilage back to the tenant as a result of food loss is known as a ‘Lobster Clause’, as a joking reference that whenever such claims are made, suddenly the spoilage consisted of $15/pound Maine Lobster, instead of what it actually is, like, say TV Dinners and Chicken Thighs.

I recently read a post on an investment group site that I’m on, where a landlord takes it one further, making the appliances on move-in all as-is. Here is how his Lobster Clause reads:

Although there may be appliances in the unit, their availability is not included in the rent. If TENANT wishes to use the appliances, they agree to assume all responsibility for care and maintenance. If TENANT wishes to use their own appliances, they may request that those in the unit be removed or stored.

An argument could be made that this clause may degrade your ability to attract a renter as a result of the possibility of having to buy new appliances at some course in their lease, but in that most its ok its a rental-500x500 lobster clauserenters treat appliances about as well as you or I treat rental cars, it certainly could be a substantial cost saver over time as appliances break. Only drawback is the moveout where the tenant bought their own appliances and takes them with them, and now you are forced to show without appliances, or offer to buy theirs. It still pushes an expense down the road a bit, though.

I hope that this discussion is yet another tool you can put into your lease to prevent drama in your landlording experience, and more importantly, hits to your cash flow.


The MAANLord






The JRPM Landlording Tips 2- New Tips!

Here are another 3 installments to the Landlording Tips series!!


KLT 114- landlording tips KLT 202  landlording tips
KLT 141  landlord tips

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Don’t Penalize your Late payers, Reward your good ones!

Ever get sick of your tenants being late? Have tenants that somehow just want to let late fees somehow slide into oblivion and just pay the normal rent even if they are late? Want to make your regular payers feel special when they don’t pay late?

Here’s a new concept for your lease toolbox. Give people breaks for paying on time, instead of penalties for paying late.

Tenant getting rent discount
Discount Rent! Yes!

Hold on, I’m going to lose a ton of money that way, right?? Not exactly. I didn’t say you had to give a rent discount off your current price. What if you raised your rent 10% or $100 and then agreed to give that back to the tenants when they pay on time? This way the rent is set at a certain amount, and if not paid on time they pay the listed (or as I like to call it ‘default’) rent. But…..if you are paying on time, you get rewarded by being able to pay a lower amount! Which of these do you think a tenant will be more responsive to and feel a greater obligation to pay on time: the creation of a late fee, or the loss of a rent discount? And even if they say they would rather lose out on the rent discount if they need to pay late, they still feel compelled to pay the un discounted rent, whereas many tenants will just pay the overdue rent, and leave you to harass them for the late fees.

Is this crafty? Sure. But I’ll be a monkey’s uncle if it doesn’t work. And you can go even further with it and create an even larger disincentive to pay late by having both the rent discount disappear AND a late fee apply for late payments. Perhaps you stagger those so that there is an early (discounted) payment window (before the 5th), a ‘standard’ payment window (the 5th to the 10th), and a late period (after that), where the late fee now kicks in. This gives the tenant another window of, “Well I’m late but not too late” to pay. But if in fact they have actually paid the forfeited discount, you get more rent, and they don’t feel bad about being late, or decide that they don’t deserve to pay a late fee and just let it sit on your books, until you decide to do something about it.

Rent discount
You want late fees in your judgment? SCOUNDREL!

This stands up strong in court as well. In the past, we had charged a $100 admin fee on top of late charges as a consideration for having to file eviction paperwork on someone, both in fees and hassle. But this amount was typically tossed out by the judge in court. But if the rent includes that $100 amount already, and the tenant hasn’t paid it, it is hard for anyone to argue that if the tenant agreed to those terms, and it’s what the lease spells out, that they wouldn’t be responsible for those charges.

Obviously, not every state is the same, and any landlord thinking of implanting this technique in their locality should check their applicable landlord tenant law, or consult their attorney.


-The MAANLord

About the author: Jeff Sullivan has been buying, holding and selling investment property for over ten years. He currently has over 40 units in his private portfolio and consults others on doing the same through his Real Estate Investment Consultancy, Equity Momentum Investments. He can be reached at

Judgments. Eight tips to insure they turn into Cash!

Judgments are great, aren’t they? But only if they turn into money, am I correct? If you are new to the landlording game, and you get your first judgment against some jerk tenant who you had to kick out because they were behind 2 months rent, or messed up your property, the rush of justice is intense! “That’ll show them! You’ve messed with the wrong Marine!” you exclaim in your giddy jubilation. But the afterglow of winning in court is overshadowed by the fact that there is no real way for you to actually COLLECT that money. Unless…..

…you have admitted your tenant and screened them, and done a few things to allow you to garnish once you have received that judgment. Here are Eight things you should do or consider to maximize the chances of getting money for your judgment:

  1. The Application: when screening the app, actually call the employer, and find out if the applicant works there. If they haven’t been there at least two years, that should be a red flag in your screening process. If possible, try and use a number for the company, asking for a specific department and supervisor listed on the form, and not the number listed for that supervisor on the app itself. Depending on your level of desperation in filling the vacancy, not having a sustained income source can also be grounds for requiring a double deposit. People who haven’t been in jobs long are risks that they aren’t attached to the job, and will depart that one for a new one.
  2. Minimum Garnishable income: There are general guidelines in each state as to how much a person has to earn BEFORE their wages can even be garnishable. So when screening that app, make sure that at least one employment source provides them sufficient income above that threshold to even permit garnishing.
  3. Check and Double check: Once you have a vetted income on an applicant that you permit to lease your property, do you just put that info away and just collect the rent? I hope not, because that’s how you end up with a judgment with no teeth. You have to ‘inspect’ your tenant’s income source to insure that their income stays garnishable throughout the term of the lease, just as you inspect the property to make sure they are taking proper care of it. The minimal timetable you should recertify income is at annual lease re-signing. We pretty much go through the application process all over again on income by sending an Income Recertification form with the Lease extension addendum, stating that the lease could be subject to nullification if the income supporting it cannot be determined. If they did quit their original position and have a lower paying job, just make sure that that wage is still garnishable per #2 above.
  4. Fear Factor: When moving a new tenant in or signing the lease, when the topic of unpaid rent comes up, gently insert that they should make every effort to pay the rent monthly because you have a very strict policy of obtaining judgments and (the important part) if they get a judgment it could  hurt their chances of getting a car loan, or anything else on credit for a ‘very long time’. It is also smart to add (whether true or not), that you have a 95% success rate in collecting on those judgments through the government and private sources from wages or bank accounts. So it would be wise to pay you before paying their other bills. Always end with, “But I’m sure that’s not going to be an issue here, it’s just something I have to throw out there”.
  5. Double check when Filing: When is the time to make a checkup on #3 above, before, or after you file for eviction? Before obviously. At times, we have even offered an additional grace period of 5-10 days as long as the tenant’s employment can be re-verified. If it can’t, no grace period and you need to be prepared to remove them.
  6. No Personal income avoidance: we have placed more than one low income tenant on the basis that they received TANF or SSI for their sole income source. Depending on how badly you want that tenant, you can place them, but be prepared to act swiftly when rent isn’t paid, as none of those funds are garnishable. We frequently permit persons without a verifiable income source to occupy a rental of ours, but usually ask for a co-signor, additional deposit, or require another member of the lease to have garnishable income to approve them.
  7. Actually send it: There are actually a lot of landlords that I talk to that actually have the appropriate info to get a garnishment, but just don’t bother with it..we are talking about $1k’s of dollars. The forms are pretty simple, the fee’s aren’t usually bad (and they pay them on top of the judgment), the only drawback is you have to wait six months, and there is no guarantee that you’ll get all or any of it, but if you’ve taken the steps above, you probably will. Just File It.
  8. Collections: As much as I’d like to totally promo collections agents as the way to go to get your money, odds are they won’t do much better than you can do yourself. They can save you time doing it, though, but the price is steep, usually 50% of the judgment amount goes to them if they collect. I have heard of some pretty wiley collections agents, with some pretty great investigative and baiting techniques to find deadbeat tenant’s employment info or bank account data to effect a good garnishment. But they are not everywhere.

The basic rule of thumb here is that only you can prevent forest fires….oops, wrong post. Well unless we are taking about whether or not your judgments are better suited as fuel for firestarting  and kindling than as a source of potentially recovered losses of rents.

REMEMBER, it’s not about the journey, it’s about the destination.

About the author: Jeff Sullivan has been buying, holding and selling investment property for over ten years. He currently has over 40 units in his private portfolio and consults others on doing the same through his Real Estate Investment Consultancy, Equity Momentum Investments. He can be reached at