I am back with another of our hundred and one cash flow accelerators. It’s so exciting to share with you things that I’ve learned over being in this business for over 40 years. And one of the things I discovered is to build into your rental agreement rental increases. Now what that means is that you’re telling your resident in advance that the rent may increase by X percent annually. So what that means is that you now can, can prescribe in advance that the rent may go up, say 10%, and then what that means is now we tell the resident at what we call the signing ceremony. This is when we meet and we go over that document. This is when we train them to be good residents. This is when we tell them everything that they need to know about becoming a good resident and being a good resident in good standing with us.
And one of the things we explained to them is so important that you pay your rent on time and you take good care of your property. And Oh by the way, annually there is an increase because there’s typically an increase in property taxes and insurance. So we’re going to review that and we’re gonna, we’re gonna touch base with you about 60 days before your renewal just to see how things are going and to let you know how much your increase is going to be. The first thing we’re going to do is we’re going to look at increases in property taxes and insurance to discover exactly what the increase will be. However, we’re also going to look at how much damage was done. How many times did we have to come out and make repairs to the property? Were those repairs aging or were those repairs actual damage that was done by a family member or even guests.
So what we are looking at is the overall picture of how that resident is taking care of the property when we make our decision of how much to increase the rent. Now, this may be subject to certain guidelines within your local community or your state. They may have limitations on the amount of increase you can do annually. And I can tell you that in most cases we do not raise our rent more than 5% however, in our agreement we do have a blank line for the amount that you can increase the rent by. So we typically have in that blank line 10% that we tell the resident. It’s not typically that much. Now, this is available in my property management system. This property management system is available online at street smart, investor.com street smart investor.com and it is loaded. It is a valuable thing. Listen, if you are going to own property, you’ve got to become a professional property manager, four of your own assets, and let me tell you something.
When you can learn how to professionally and properly manage your property, you can save a fortune in fees because property managers do typically charge a pretty significant amount of your profitability, a full month’s rent to rent it up. They charge up to 10% on a monthly basis. In collections, they charge other fees. They add on sometimes for repairs, for managing the repairs. They charge half a month. We up the, I mean there’s all kinds of different fees that you’re faced with when you hire professional property management, and that can be a significant sum of money, particularly if you’re going to acquire a whole bunch of properties. So I suggest that you learn how to be a professional property manager and do this thing right now, this comes with training. It comes with six CDs, also comes with a form stairs where you can pull this up on your computer, highlight the blank line and type it in. I’ve got a filled-in version of every document, a blank version of every document, a cover sheet that explains it. Who gets an original, who gets a duplicate? Does it get recorded? Where does it get recorded?