Zoe provides advice and insights into the rental market. She shares her expertise on assessing affordability for renters, setting rental prices based on comparable properties, and how to handle rent increases or changes. She also provides tips for attracting the best renters, dealing with difficult tenants, and the importance of having a bulletproof lease. Lastly, she emphasizes the importance of not being afraid to become a landlord.
Vikas Gupta 0:58
Hi, everyone, and welcome to the hacking real estate podcast. We are joined by Zoe Fox today. So a fox has been a licensed Realtor for nine years. She's obtained a bachelor's degree in interior design from War College of Art and Design, and has a diverse background in home services and composing Design Construction Management, Marketing and Sales alongside her husband, so a successfully manages their investment properties in South Philadelphia. Additionally, she runs a boutique floral design company that specializes in weddings and events. So he Welcome to the show.
Zoe Fox 1:33
Thank you for having me.
Vikas Gupta 1:35
Thank you for being with us. So in your own words, can you tell us a little bit about your real estate journey?
Zoe Fox 1:41
Well, so I started in real estate pretty much as soon as I got out of college, I was working for an architect, but it was not full time. And this was 2010. So the job market was interesting. But yeah, I started going on Craigslist, like, what can I do? And here's an ad for real estate assistant. And I was like, Yeah, I can do that. And I met with them. I got the job. So I would work in the morning for the real estate team. And then I would go in the afternoon and work for the architect. It was a little disjointed there for a while. But finally I was like, oh, no, I need more. And I need health insurance. So I ended up going to work for a big construction company. I did construction administration, which Funny enough, my husband and I years later end up having connections through that because he sells construction supplies. So but yeah, I ended up kind of coming back to real estate, it kept sucking me and I left the construction industry to go take care of my dad then came back to Philly. And I was like, What am I going to do, but I got a message from the realtors that I used to work for like, Hey, if you want a job, we have a job for you. And we have an apartment for you and just move back to Philly. Okay, so I was like, Yeah, okay, yeah, sure. So I did. And it's been, it's been great ever since I was basically an executive assistant for two top producers who joined forces as a team, and then ended up working as like a kind of office manager, all purpose training person, home base, person for the office for five years, up until about an hour. And then I became a licensed assistant. So I was able to do other things, and basically really manage closings and cut my teeth on other people's businesses, which was great, I highly recommend that anybody that asked me I like, I'm going to tell you the long road because that's what worked for me. But hearing people's phone conversations, seeing how other agents handled deals, you know, getting to deal with everything from rentals to million dollar transactions, when it's somebody else's reputation on the line is really great to kind of know, hey, here's how I want to handle things. This is how I want to be when it's my business. So then in 2018, my team moved to Compass, we were actually the first team on the compass office that opened here that summer, it was right after the fourth of July. So we're about to have our anniversary. But I started selling full time, then I left the office, and I realized that I love my car, and I want to be in my car all the time. But yeah, I'm much better being out and about than being stuck in an office all day. So, you know, being able to have the flexibility of having my daughter she's four now, but I was able to kind of keep my business going when she was a little baby and keep her home with me. So we joke that she's a real estate baby because she's been on all kinds of things. Home Inspections.
Vikas Gupta 4:24
Yeah, well, that's good. You're You're steeping her early.
Zoe Fox 4:27
It's all for her anyway. And there you go.
Vikas Gupta 4:30
That's a really interesting story. I mean, it You've definitely also, it sounds like there isn't much in real estate that you haven't touched yet. You've done architecture. You've done you know, sales.
Zoe Fox 4:42
I've even done a little roofing my dad was a was a builder growing up and when I was in trouble, he'd be like, get up on the roof. you're scraping asphalt today. So I have a lot of respect for roofers, they're worth every penny.
Vikas Gupta 4:57
So it's in your blood. Exactly. Oh, no, totally. I mean, I have some real problems right now. Don't even get me started. But yeah.
Zoe Fox 5:04
Oh two. If you're in Philly, I'll send you a great roofer.
Vikas Gupta 5:09
I wish I wish I'm in Southern California. Oh,
Zoe Fox 5:12
brutal. Yeah, no, I think that's definitely one thing is having that background and construction and knowing how houses are built, I still keep my textbook from entry advisors, construction materials class, shout out more colleges are, but to learn how houses are put together from start to finish and to really understand that and then also have a respect for the trades. You know, a lot of people were like, be an attorney, be a lawyer and like, no be an underground plumber. Those guys are making bank all the time. We need more of them.
Vikas Gupta 5:44
So great. Well, I want to ask you a little bit about your your realtor business. So I know that you've helped some folks on my team at Azibo. With purchasing investment properties do you specialize in investment properties? Are you both primary home and investment properties?
Zoe Fox 6:02
I would say that investments are sort of an outlier for me in terms of people purchasing them. But a vast majority of my business is helping landlords to place tenants. So I don't do property management, but I do tenant placement. So people like me who are smaller scale, they're able to manage their properties themselves or not. Sometimes they'll have property managers in place, but they want to utilize a realtor to place their tenants. And I mean, that's to me, that's why your products are interesting is because it's a you know, it's a platform for people to really get organized. And that's sort of what I help them do is to navigate all the laws and regulations and what it takes to be a good landlord in our market. So
Brandon Hall 6:44
do you have your own real estate portfolio?
Zoe Fox 6:46
I do. I have a little baby portfolio, we have two houses right now. Both of them are within a mile of our house in South Philly. And we lived in one of them. When we were renovating our house, I husband's on our house for 19 years now next year will be 20 years. But right before our daughter was born, we basically gutted that house. So we did a cash out refinance, we purchased another house, we lived in it for nine months, while we completely gutted our house, and then we moved back. So that's how you know I'm crazy. But it was so great. I'll never forget the day we moved back and I was like, Oh, my bagel store, I missed my bagels so much. Like I don't even eat bagels that often. But I just love our house and where it is. And we were able to get an investment property out of the deal. And it's been very good to us so
Brandon Hall 7:34
and then when did you pick up your second investment property.
Zoe Fox 7:36
So that was actually our second. Our first was one that we had purchased almost 10 years ago at this point. And that's even closer to our house, we can walk there in a hot minute. And that one's been actually just the nicest house, we really have had so few problems with that house and all of our tenants are great. In fact, this past Monday, I ended up selling a different house. But sellers were our former tenants. So that was really special to me, because I always joke with people. I'm like, you have to live in our house as long as you possibly want. And if you leave, you just have to bought something. So there you go.
Brandon Hall 8:13
Hey, yeah, that's that's an interesting funnel, I guess into your main core business. That's cool.
Zoe Fox 8:19
Well, and then it's nice to because they can be flour clients to which these people are my sellers on Monday, her sister is getting married on Saturday. So
Brandon Hall 8:27
I run a CPA firm and we work with real estate investors. And so sometimes I see real estate agents, brokers say I don't want a single rental property and then other times I see them like go all in and buy 20 Where do you stand along those lines, I would love to
Zoe Fox 8:43
have more and more and more and more but I think to me quality over quantity always like our model is renovated, single family, in our neighborhood. So that we know the type of people that are going to be coming in and you know, really can say we are friendly with and make relationships with our tenants. I really like managing them, I find the communication and the setup. Like I just want to know who's in my house, and then I can, you know, have a nice relationship with them. So to me, I would rather have you know, five nice houses versus like 100 in wherever I don't want to drive to you know, yeah,
Brandon Hall 9:22
well you get some nice tax benefits with that structure too. Because you being an agent slash broker, you are working in a real property trader business presumed full time and and you qualify as a real estate professional from a tax perspective. There's definitely like the real estate professional like word that you would use on LinkedIn. But from the tax perspective, the IRS has a different view on all of that, that you would qualify based on what you told me. So then buying rentals and owning rentals can actually produce some pretty solid tax benefits for you especially if you're buying local via you should definitely look up that that tax rate, it's called real estate professional status. And it will essentially allow you to use your losses from your rental real estate to offset your ordinary income. If you meet all of the tests, you have to qualify as a real estate professional and materially participate in the rental activities with sounds like you're you're self managing your rentals. Sure, yeah. Yeah. Yeah. So so there you go. So you're probably good there. I know. I didn't mean for this to like, take an unsolicited tax advice turn. But I just like to point that out.
Zoe Fox 10:31
No, I'm like, my ears are perking up right now. Yes, tax benefits. After I just wrote another check to the federal government. I would love to know that.
Brandon Hall 10:40
Yeah, well, and that's why that's why a lot of our real estate agents like love to buy real estate because, you know, number one, I think that they have a competitive advantage in the marketplace anyway, over somebody like me that's trying to buy, you're in it every single day. It's what you do full time. It's like, it's like trying to trade stocks, right? It's like, yeah, sure, you can get some wins. But at the end of the day, there are people in I guess, now machines on Wall Street that you're competing with, that are doing this day in, day out. They're up at 5am while you're still sleeping, and they don't go to bed until 10pm At night, and this is literally all they do. Yeah, that's
Zoe Fox 11:12
not my bag at all. I like to I joke that I like to go look at my investment. I like to go knock on my bricks, I like to see it where it's at. not know that, like the tweets of a madman are gonna suddenly impact its value. No.
Brandon Hall 11:27
It's just shall not be named madman. But still
Zoe Fox 11:29
be Yeah. But to know that that's safe. And that and I think a lot of people are adverse to being a landlord, because they don't want to deal with the people. They think it's too risky. And like, yeah, it can be an expensive venture. But really, if you're in it for the long term, which is not just how much am I cash flowing? How much by making right now on these rentals, but how much are they gonna be worth in 30 years when I don't owe anything on them were fewer 15 years, however long
Brandon Hall 11:54
because we do see a lot of real estate agents that have that competitive advantage there in the market every single day. And then once they learn about that tax benefit, they go, Well, there's no reason to not buy real estate. So let's go load up on rentals.
Zoe Fox 12:05
I've had at least client three clients this year that are selling either house houses that were investments for them, or houses that would make a great investment. I'm growing. I want that. I should buy it. I call it the warranties. I get the warranties. That house.
Vikas Gupta 12:19
Yeah, well, I guess that's great, Brandon, to your point, right? If you have first look. And that's a competitive advantage versus someone like me or Brandon,
Zoe Fox 12:27
well, you know, you want your your clients to get the best possible deal. So you know, if you can work it out that that's you that's great. But yeah,
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Vikas Gupta 13:17
on the on that tax benefit brand new were mentioning I think, for the sake of the audience, just to make sure that I understand it they understand right the if you have positive cash flow on your property, but you may have non cash expenses such as depreciation that turn it into a loss from a p&l perspective, but it's still cash flowing with the real estate investor tax status, you can take those passive losses that are not driven by non cash expensive so you still have a cash flowing property and use them to offset your your active ordinary income from your from your profession.
Brandon Hall 13:52
Yeah, yeah, we should we should do an episode on this.
Zoe Fox 13:54
You should listen to
Brandon Hall 13:58
you got me. I am the co host here. We should actually do a full blown episode on Yeah, no, you haven't. Exactly right.
Zoe Fox 14:05
Let's round up this whole office if people don't want to hear about that. Yeah, exactly.
Vikas Gupta 14:09
Now, for sure. I think the point that I wanted to make is that like it's it's the non cash expenses and taking advantage of those so so people don't think that like, hey, I need to have money losing assets in order to take advantage of it.
Brandon Hall 14:22
It's one of the beautiful things about real estate and even if you can't take advantage of the tax loss. This is what I like to explain to people when you buy rental real estate. You know, you might net let's call it out $10,000 a year. And it we'll call it net operating income, right? So it's my rents minus my actual operating expenses. My NOI is $10,000 That's cash that hit my pocket right and maybe some of the cash went to go pay off a mortgage but at the end of the day, I got $10,000 of cash. Now with real estate, you get this added benefit called depreciation and it's a deduction that essentially comes after your net op Income is calculated. So if depreciation is even say $8,000. Well, now I made $10,000. But I'm telling the IRS, I only made $2,000. And so even if you can't create tax losses with real estate, you're still getting this amazing tax benefit by not having to pay tax on the full amount of your noi. Today, it is a deferral strategy so that the bill will come due at some point, unless you do what we like to call the swap until you drop strategy, basically 1031 1031 1031, then you die, and then you handed on your heirs, and then it all gets wiped out, and you get to do it all over again. So you can avoid it. But generally speaking, it's a deferral strategy. But if we use that same $10,000, net operating income example, and we have like $12,000 of depreciation expenses, well, now I made $10,000, it's actual cold, hard cash that hit my pocket, but I'm telling the IRS, I lost $2,000. And then in your situations, where, like, if I'm a real estate agent, and I'm doing this full time, and I've got these rentals that I'm gonna throw some terms around, but materially participating in, and they're producing tax law, because losses now I can use that $2,000 tax loss to offset my Commission's, and it gets very powerful. So now I'm not only offsetting my cash flow, or deferring tax on the actual cash that I've received from the rental itself, but I have this extra tax loss that I then get to go and deploy against my regular income, you cannot do this, if you have a full time job. That's the that's the kicker. So everybody listening to this, that's like getting all excited. If you have a full time w two job, you cannot qualify as a real estate professional, your spouse might be able to qualify if they're stay at home, or if they're like doing part time something. But real estate agents are working in a real property trader business. So even if that's their full time job, they can qualify. And there's some nuances there. So always, of course, make sure that you touch base with the tax professional before you move forward with any of this because it is like a very scary just box that you can check. The box is not scary, you can just check a box in the tax software. And your refund will go from like $0 to plus $50,000. And if you don't know what you're doing, that's where it gets scary.
Zoe Fox 17:14
You pay professionals for these things like I'd sell, I don't even pay I don't even pay my own fingernails. I'm not going to do my own taxes. I tell you what the information is you check the box. I feel good about that.
Brandon Hall 17:27
And I know TurboTax likes to gamify that but man it's like it is literally a little boxy check you check the box and boom 50k It's like Whoa, yeah, so get a professional.
Zoe Fox 17:37
Yeah, I prefer I mean, a plug for CPAs because I really mess myself up with TurboTax not knowing that I had to file City Philadelphia taxes when I was like, you know, a million years ago. First filings delayed taxes. So live and learn and get a good CPA. There you go.
Brandon Hall 17:53
Yeah, Philadelphia local love that Ohio's got all the local Rita stuff. Yeah, you definitely want that definitely gotta watch out for those local taxes because they can creep up on you.
Vikas Gupta 18:03
First, I think Zoey, maybe you should pick up the phone and call Brandon.
Zoe Fox 18:06
I know. I'm like, How do I get on your client list. I'm not I'm not small peanuts, I'm sure compared to you deal it. But I would love your knowledge.
Vikas Gupta 18:17
I do want to pick your brain. So it sounds like one of your areas of expertise is in finding qualifying placing tenants. And one of the common themes that we've heard from all of our guests is like the importance of a good tenant, and how a good tenant versus a bad tenant can like make or break your real estate investment. So I think starting at a high level, like beyond sort of what you would see on a credit report, like what do you look for, like what makes a good tenant to you?
Zoe Fox 18:49
I mean, on a very basic level, my vetting process for my landlord clients and for myself starts with the very first email, I want to know that you can email that's like, I It's amazing how much communication you can get from just a short little email. How are people handling digital platforms? We're just communication in general, I want to know your communication style. Are you forthcoming about things? Are you detailed? Are you asking good questions? Are you showing up prepared? Are you showing up on time? I mean, I have a hilarious, hilarious story about trying to play a sentence in my last rental, which I won't bore you with the whole thing. But this person started calling me at like 6:30am to confirm our 10am appointment. I'm like, Oh, he called me instead of texting, like, this is weird. And then I'm waiting for him in the house and waiting and waiting. I finally call him like, Oh, I'm 20 minutes away. And I was like, You know what, I think we're done here. You might as well just turn right back around because this this here is not gonna work out between you and me. And I was able to make that call because it's my own house and I'm not working for our client and I know who I'm looking for, you know, but really for landlords I'm trying to create A system that is a cookie cutter for each one, first of all, so we're not violating fair housing laws. And we're being you know, we're respecting all of our local laws. But we're also just setting them up to screen everybody on the same standard background check, credit check, pay stubs, IDs, how do we feel about this person? Did I meet them? Did I get to size them up and down as the other agent? Is there another agent representing them? What are they like? What's the story of these people? How, you know, how likely do we feel but they are going to take care of this house? What is their last rental history? Have they been jumping around between rentals? Have they ever been evicted? Do they owe gas bills somewhere, you know, the tenants that we really want to be dealing with are people that pay their bills, that's kind of it like some people just have a respect and are able to handle that and are able to handle basic transactions between people. And then, you know, it takes all kinds. There's a lot of kinds of crazy people out there. So we're trying to weed out the crazies to not have to deal with that.
Vikas Gupta 20:59
Got it. Got it. And we've heard from a previous guests that, you know, he's got a few different types of properties. And in one, he gets young professionals, and they turn over every year and another, he gets young families, because they're single family homes, and they stay for 234 years, like what have you seen from a trend in terms of like Long Term versus people turning over every year? And do you try to optimize for one or the other? Or do you just try and take the best person who thinks you know, they're gonna pay their bills.
Zoe Fox 21:31
I mean, I think it always depends on the seasonality here in Philadelphia, our, our busiest rental season is May through August. So if you're returning over in December, January, you may have a smaller applicant pool to look through. But my, my strategy is always for trying to get people that I think might be longer term, I'm going to sign them on for a year, maybe a two. And I have two two year leases in place right now. So that's great. I don't have to think about turnover and painting and electrical work, you know, just whatever maintenance we might have ongoing during that time. But saving the cost of turnover to me is huge. And just I want to price my rentals in such a way that it's affordable for people, I'm not pushing the envelope too far, even though our property taxes have gone up in Philadelphia. So we're trying to offset some of that. But really keeping the rents reasonable so that people are able to stay for longer term. And if you know feels good to them, it's a good fit for them. And that's another thing I'm looking at people, are they stretching their income to afford this? Or is this an uncomfortable thing? For them affordability wise?
Brandon Hall 22:40
And how do you how do you like assess that that affordability piece,
Zoe Fox 22:43
I typically try to go with a two and a half times your your net income, so your after tax income, now it can be hard and certain price points to push that. So, you know, I think in the type of house that we have, personally, we're able to see some of these like young professionals, people that are established in their careers that are able to afford these rents, whereas, you know, certain other types of renters for landlords that I may have, you're naturally looking at a lower price point. So you might have to adjust your criteria a little bit, but really looking at the strongest points instead of credit score, anything like that would be to me rental history and job history. How long have they been at their job? How long? Have they been at their current rental? Are they breaking a lease to come here? You know, what is? What is their history? And what is it? Why are they moving? Are they coming for a job? Are they hopping to get away from a crazy landlord? And turns out that's not the story, you know? So just trying to figure out a good snapshot of the people. And I think you can kind of get a good sense of people by meeting them. So I try try to meet as many people as come in via our online marketing myself personally so that I can offer the landlord that because they're not always getting that face to face interaction if I'm representing them
Brandon Hall 24:01
so and so you mentioned like a decent rental price like how do you set your rental prices? What sort of data are you looking at to understand what that target monthly rent should be?
Zoe Fox 24:11
That's a good question. So I have access to the MLS but you can also do similar searches, you know, through Zillow, it doesn't necessarily let you search all closed listings. But I'm going into the Multiple Listing Service, I'm searching within a quarter mile radius of the property within 10% of the square footage, similar beds, baths finishes, what have those closed for within the last 30 to 90 days. So for sale comps, I would look in the last six months maybe the last year probably focusing more on the last six months. But for rentals I'm looking much more closer to where I'm at 30 to 60 days, 90 days tops what are what are other properties renting for but here in our market in Philadelphia my usual rule of thumb is anywhere from 700 to To 1200 and up her bedroom depending on what other amenities The house has doesn't have central air doesn't have parking doesn't have a backyard does it have a roof deck? Is there a doorman? Is there a pool? You know, we're factoring all this stuff in. But really my biggest tell is always, what else is rented nearby? And what is the season? You know, are we now jumping off the end of August and they're our rental pool is going to dip drastically. Because whether or not you like it, you're in that school schedule, you know, even you're on even in school, you're on the school schedule. So the number of rentals will drop off dramatically, and the number of people looking will drop off dramatically around Labor Day. So what season are we in? How hard do we need to go Got it. So
Vikas Gupta 25:42
on the on the topic of rents and setting rents. So that's that's a great sort of deep dive into how to set the rent for for placing a new tenant, how do you think about rent increases or changes on tenants that you have in place,
Zoe Fox 25:56
I am personally try my very hardest not to do that, to my attendance, if I can help it, I try to pick a price that I feel like this would be comfortable, even if we had some slight adjustments over the over the term of the lease, but that when their lease renewal would come up, I would give them the same amount of notice to change their lease, as I would expect if they were going to be leaving. So 30 to 60 days, whatever I've written in there. So this is our deal for the next year. Unless I come to you on this donor before this date and say, Hey, I have to raise your rent by this amount, we can either rent up a new lease for another 12 months, or you can get out without penalty, whatever during this period. I haven't luckily knock on wood not had to do it. Because most of our tenants are there, at least a year but most of our tenants have been two to three year clips, maybe four year clips. So we've gotten lucky in that. But I really try hard not to do it during that time because I just want them to stay and not spend the turnover money. Is it going to cost me 150 bucks times 12? What is it going to cause me in terms of turnover fee versus just eating that until I can replace it, replace that tenant and raise the rent?
Brandon Hall 27:11
I'm sure you've seen a large swath of tenants. What's like the ideal tenant? And what are their characteristics? That's
Zoe Fox 27:19
a good question. Um, I definitely think somebody who knows their own limits financially, and really somebody who is stable in their income, which I know as a self employed person can be difficult, but just know that you're gonna have to prove your income one way or another, whether it's pay stubs, or I really don't want to see your tax return. But I will, if I have do show me bank statements that show me that you have an income coming in. But just somebody who can be quick to move if you see something that you like, you better apply for it now because you don't know who saw it yesterday and is still working on that, to be decisive and to have your financial house in order to just know I'm gonna have to shell out first last and security I'm gonna have to pay 50 to 100 bucks on an application. And if you really want to be a savvy renter, I like I want to start this as like a movement. Everybody who goes into buy a house is pre approved for a mortgage. What if we pre approve our rental clients to especially in hot turnover seasons where I'm standing in an apartment and there's somebody else getting in? I'm like, I'm gonna have to throw this key in the pool so that we can actually rent this like, how am I going to do this? No, you know, how I did it was that I pre screened my clients and I had PDFs of their rental application sitting in an email draft so that I'm standing in that condo literally applying for them as they're there. And the owner has paystubs IDs background checks that are less than 30 days old crest credit checks that are less than 30 days old. So maybe they go through Azibo and you get you get some PDFs that you're able to supply to these owners and reuse multiple times. So instead of paying 100 bucks a clip and getting turned turned down because it's taken or no we don't want you know, I know I'm pretty well qualified here it is. Here's all my information. Here's my application boom done. That's all they want to see from you right most most renter and most real estate agents are gonna go Yeah, send me what you got. I don't want to run it it's going to take a day. So
Brandon Hall 29:18
what sort of features or amenities would you say I should be looking out for to attract the best renters
Zoe Fox 29:24
air conditioning? smart features like ring doorbells, security systems, upgraded appliances? Definitely. I think that at least in our market, there has been a huge influx of luxury construction that has driven base the base the status quo of what people are expecting in our market. So the central layer, the high ceilings, the stainless steel appliance packages and granite countertops and all that stuff where you know, it used to be a lot more affordable. You could have these column grandma houses where there's shag carpet but the rents 900 bucks a month no Nobody wants that anymore, right? Like they want the nice blades were cheap too. So it's hard to be a landlord, and have have this sort of, quote unquote affordable rentals, because you're being expected to put the money in to bring it up to that level. So I think that's really what's driving the rental market at this point.
Vikas Gupta 30:16
So we've talked quite a bit about the ideal tenant. I've heard that you're, you're a pro at dealing with nightmare tenants.
Zoe Fox 30:24
Oh. I don't want to put that out there. I don't know.
Vikas Gupta 30:30
Tell us a little bit about the sub sub optimal tenant, like if you get into an adverse situation, like what what's the most common adverse situation you see? And how do you handle it?
Zoe Fox 30:39
I think there's a huge misconception amongst most tenants that your landlord is out to get you and like out to bleed you dry and let you live in this horrible place. And now, that's not to say there are not slum Lords out there. But I usually declined to work with those landlords. Because that's not my speed. I'm a little more hands on crunchy granola than that. But every once in awhile, you do get a bad egg. And I think the first line of defense is always to have a little bullet proof lease to know that your lease is really covering you. Should you need to seek legal repercussions. One day, I'll tell you guys a story of how Homeland Security cleaned out our rental and why my husband is no longer responsible for vetting tenants. That was a good one. But yeah, sometimes you have to learn the hard way. But I think in terms of dealing with just people in general, you just have to realize that like most people are not evil. They're just stupid. And most people are not against you. They're just for themselves. So if you can find that middle ground of like, how do we both get happy here? Sometimes that's hey, I need you to leave now. Where I'm going to decline to renew your lease, you should Please vacate now. You just have to be willing to have honest conversations, and you have to be willing to be extremely clear in your communication with people about what you want.
Vikas Gupta 32:08
Got it? I mean, can we go into some specifics? I mean, not necessarily that story, but like, you know, what do you do? Like, let's say you have a tenant who's routinely routinely late on their rent, like, how do you handle that situation?
Zoe Fox 32:19
I mean, I think I would approach it with curiosity, and just say, hey, like, what's going on? Like, we have this deal, you're supposed to pay me by the first you keep paying me late, like, I still have to pay my mortgage on time. So you're kind of screwed me right now. Can you Can we talk about this, because maybe we need to make an adjustment. Or, you know, I was very lucky during COVID, that all of my tenants were able to continue paying their rent, but I did reach out to them and say, Hey, if you need to use your prepaid last month's rent for this month, to like, get caught up and get your feet under you, fine, but just know that you're gonna have to pay that last month, before you move out. And that ended up working, but it's like, I'm a human being, like, I know how bills work, sometimes life gets hard. But I really try to pick people that I think you know, are going to be able to support themselves or have some sort of safety net, or just seem to be people that would handle it if something got hard. So I don't know, it's not always easy. And again, sometimes Homeland Security things are done, it's out for you, you just have to be open to that. One of my landlord clients was like, a meteor could fall from the sky at any moment, yet still, we leave our house and everything is.
Vikas Gupta 33:34
So first, first order of business is just be human. Right? Go talk, go talk to the tenant, see what's going on? See if you can work something out. Right? Does that go back to like, just like the cost of turning over a unit the cost of having a tenant go when they could stay around for a year or two? And it's just a blip? Like, it's just, you know, do the math on that. And it just makes sense. Yeah, and
Zoe Fox 33:57
just really knowing what your lease says, like I have a five day grace period and my lease before I'm going to start hounding you and or charging you late fees. So we review that beforehand, like really like I like to sit down and read the lease with them. This is what your lease means. This is what I expect from you. And really just setting up those expectations and being crystal clear about the communication at the outset, you can just let that little snowball run by itself, because you've done a good job setting it up.
Vikas Gupta 34:28
Well, great. I think so far, this has been really helpful, really insightful and great content for our for our listeners. I think before we go into our closing questions, Brandon, is there anything else that you'd like to cover?
Brandon Hall 34:41
No, I think that we covered it. I just wanted to know from the investor perspective, like kind of what to watch out for or what to think that you answered, both in good tenant and a bad tenant and then also what sort of amenities to to kind of pack your rentals with or what you should be focused on acquiring because that's something that I'm always interested in as an investor. Myself is just understanding like, what what type of property is going to yield the highest demand for for renters. And I know that there's like the three to, you know, three bedroom two bath type of thing. But I also know there's a lot of things in between two. So
Zoe Fox 35:16
I think honestly, the biggest switch factor for me is central air, or some sort of built in air conditioning, because at least here in Philly, if you plug that filter in, whether it's rentals or homes for sale, it's kind of the difference between like the grandma shell situation or, you know, something that's like very old and dated to like hay has been recently updated in the last 20 years. So that's always my delineating factor is central air, you can do that, or even ductless air conditioner, which is common in our market too. So
Brandon Hall 35:50
Well, it's interesting, because I have a short term rental, and the short term rental space. All of the landlords are focused on those filters, right? So they're playing the Airbnb VRBO algorithm game. And they're always thinking about how do I add this one more amenity or whatever it is, you know, pet fee or dogs allowed or whatever, just to bump up in the search rankings. And when you make those filters, there's just not that many properties that meet all the criteria, but mine will be there. So I get more bookings. I have 24 long term rentals. I don't I can't I can't tell you one time that I thought about what are the filters going to be on Zillow or the MLS when I set this thing up? But I have thought about number of beds, number of baths. But it's just interesting that you brought that up, because we should be thinking about that. I'm sure that there's other way more sophisticated people listening to this that are like, I can't believe Brandon doesn't think about this stuff.
Zoe Fox 36:48
Yeah, no air conditioning and pets probably would be the other one. Do they allow pets or not? So
Brandon Hall 36:54
yeah, but But to your point, it's all like you can put these filters on the MLS. And you can you can find the rentals that meet that criteria. And yeah, that's interesting. I did not think about that.
Vikas Gupta 37:07
Well, Zoe, we have three closing questions that we'd like to end every episode with, if you might don't mind bearing with us. So first question is, what is your favorite book, and it doesn't have to be real estate related. So
Zoe Fox 37:20
it's kind of corny, but it's actually like one of the first self help books that I ever came across. And I've actually listened to it as a book on tape many times. So it's called The Seven decisions by Andy Andrews. And he is like the most upbeat public speaker I've ever heard. He has a great personal story himself. But the basic premise of it is just taking responsibility for your life, and how you can decide to have a great life even when things are hard. So I definitely recommend everybody listen to Andy Andrews. He's got a whole library of good stuff. But the seven decisions are my favorite. So
Vikas Gupta 37:58
I'll have to add that to the list. Cool. Well, our second question is more real estate focused and to you as an investor, what is more important to you? Cash flow or appreciation?
Zoe Fox 38:11
Appreciation 1000 present, the cash flow is now but appreciation is my retirement. So I told my tenants, you are my retirement, I want you to be happy. You and You are college tuition. So thank you.
Vikas Gupta 38:36
That's great. I mean, we've we've had a lot of well, this case that case, so I appreciate the straight up.
Zoe Fox 38:45
It's a long game, it might be a short game, it might be but you never know, you know, you've got to be really in it for the long term for it to see the true fruit on the tree.
Vikas Gupta 38:54
And then our final closing question is What else? What other piece of advice do you have for our audience that we haven't quite covered yet?
Zoe Fox 39:03
I just want to channel our mutual friend who herself is a prolific landlord, and I always look up to her but my advice would be, don't be afraid. Like I said, a meteor could fall out of the sky at any time, but still get up every day. But yeah, don't be afraid to get into landlording because I think there's a huge misconception that landlords are evil and sucking the blood out of the world. No, some people are providing a nice livable space to people until they can go on and and hopefully become homeowners themselves. So don't be afraid to go out and be a good landlord.
Vikas Gupta 39:40
Oh, great. Well, thank you very much, Zoe. This has been fantastic episode, I think really insightful tips and a different perspective for our audience.
Zoe Fox 39:48
Thank you. Thank you for having me. This is so fun.
Brandon Hall 39:50
And if anybody listening wants to reach out and contact you, how can they do so
Zoe Fox 39:54
they can find me on Instagram @zoefox.home where you You can email me so email@example.com
Vikas Gupta 40:03
thank you very much
Zoe Fox 40:04
thank you thank you both
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