Rich Landlord, Poor Landlord


There are a lot of bad or poor landlords out their in the vancouver real estate market. However, there are just a few rich landlords out there that are wealthy and know how to maximize their money and secure it.

This Rich Landlord, Poor Landlord series is designed to give you a strong foundation of becoming a rich landlord or learn one strategy that can take you to the next level.

That’s why we wrote this guide — to empower landlords with the strategies and knowledge to stand out from all the other landlords in the market looking to make more money and become a smart real estate investor.



This guide was written exclusively for Landlords based in Vancouver, BC. Everything that you need to know on how to become a rich landlord is in this guide and we also go into the hidden secrets of becoming more successful with your real estate investments.



You can treat Rich Landlord, Poor Landlord: Hidden Secrets Rich Landlords Know That The Poor Do Not as an road map to guide you to becoming a more successful landlord. If you have been struggling to keep your tenants in check or want to manage more properties then the strategies in this series will give you those tools and take you to the next level.

Even if you have a basic grasp of being a landlord but are looking to add a layer of depth to your skill set and learn the hidden secrets of becoming a rich landlord then this is for you.

Let’s begin with the first step to becoming a rich landlord and explore the hidden secrets.



Rich Landlord, Poor Landlord – Chapter 1: The Difference is in the Perspective
Rich Landlord, Poor Landlord – Chapter 2: Your Tenant Is Not Your Friend, but a VIP Client
Rich Landlord, Poor Landlord – Chapter 3: How to Make Your Tenant Love You for Charging High Rents
Rich Landlord, Poor Landlord – Chapter 4: The 5 Stages of Rental Return on Investment
Rich Landlord, Poor Landlord – Chapter 5: How to Attract the Right Tenants and Filter Out the Wrong Ones


Rich Landlord, Poor Landlord – Chapter 1: The Difference is in the Perspective

Gary’s Words of Wisdom (WOW):

A rental investment property is a business so treat it as one.

One of the common problems I see among people who own rental properties is that they don’t behave as real estate investors.

What I mean is they are not treating their rental investment property as a business.

Here are some key differences that I’ve noticed:


Landlord Perspective: Some landlords don’t want to go to the trouble of filtering out their tenants so they just rent the unit to whomever they can get. In fact, they are super thankful that someone is willing to rent their place. I don’t understand why they have that mindset.

Business Perspective: In a business, you have a target market. You don’t try to serve everybody. I don’t know the formula for success but I sure know that trying to please and serve everybody is a formula for business failure.


Landlord Perspective: Some landlords just want to rent out to a tenant and never talk to the tenant ever again.

They just want easy money deposited into their account month after month. They offer no post-customer support or follow up or anything. They try to do As Least As Possible for the tenant but they still want to get paid what they are charging.

Business Perspective: In a business, customer service is fundamental. Not only do you have to provide excellent customer service prior to the customer giving you business, you should be providing excellent parallel customer service even after the customer has purchased your product or service. You should be offering regular follow up as well if appropriate.


Landlord Perspective: Some landlords do their own marketing and that’s ok if their marketing skills are excellent.

However, I see lacklustre ads all over Craigslist with horrible pictures and horrible, vague and limited descriptions and I can’t believe it when potential tenants actually call upon these ads.

Business Perspective: It’s all about attracting the right client and the marketing ad pieces are targeted towards those individuals the business is trying to target. The pictures are professional.

The write ups and ad copies are all professionally edited and descriptive and benefit-driven for the customer. The marketing pieces are incredibly attractive and it’s no wonder they are so effective at reaching their target market.


Landlord Perspective: I talk to landlords who haven’t raised their rent in years and not only is the rent below market value but they are not even keeping up with inflation, all the while strata fees, insurance and all types of fees are going up. So, landlords profits are actually decreasing year by year.

Business Perspective: Businesses often charge what the market is willing to pay. If they charge below market prices, they are doing it for a specific purpose and for a limited time to increase brand exposure and such and will quickly revise the prices gradually to compensate for increases in expenditures, inflation and profit margin.

There are more comparisons that I could do but I think I’ll talk about it more in another article.

Have you been looking at your rental investment property with a business perspective or with a typical landlord perspective? This one of biggest hidden secrets which is the mindset that you could be the difference between why you are a poor landlord as opposed to a rich landlord.


Rich Landlord, Poor Landlord – Chapter 2: Your Tenant Is Not Your Friend, but a VIP Client

Gary’s Words of Wisdom (WOW):

Be aware of your responsibilities when it comes to clients/friends

If you want to be a rich landlord, you have to treat your rental investment property like a business.

If you’re one of those landlords who wants to do as little as possible and just expect money to land in your bank account, then maybe being a landlord is not for you.

One of the common occurrences I see is that landlords don’t raise the rent on their tenants for years and years. They often use the reason:

“They’ve been great tenants. They’ve always paid their rent on time. They’ve never complained.”

Well, I’ve been a great customer of Subway and I’ve always paid for my sandwiches and never complained there. Why did Subway increase their prices?

“If I raise the rent, then they’ll leave and I’ll have to go through the trouble of finding new tenants. I may have to pay the mortgage for a month or two while I find a new tenant and it’s not worth it.”

If you are charging below market rents, then you should be increasing the rent. If your tenant doesn’t see that as reasonable, then they are no longer being the “GREAT” tenant that you were referring to them as.

If your tenant leaves because of the rent increase, then that’s even better. You are not limited to how much you can increase the rent year to year.

Don’t worry about not being able to find new tenants. If you are charging market value rent, there will be tenants.

If you’re having trouble getting applicants to rent your property, then take a close look at how you are marketing your property. Are you including professional photography and floor plans in your Craigslist ads? Are your ad descriptions written poorly?

One of the top reasons I hear landlords refusing to increase the rent is,

“My tenant is a close friend of mine. I want to help them out and charge them below market value rent.”

I understand. If that is the case, then make sure you are self-aware that you are no longer treating your rental investment property as a Business.

You are more like providing low income social housing by doing your friends a favor and offering them cheap rent.

As long as you and your family are aware of that and willing to take the responsibilities associated with charging lower rent, then do as you please.

What consequences are associated with charging lower rent?

Well, in some cases, you’re spoiling your friends and not giving them the opportunity to struggle and pay what they should be paying.

Some friends may unintentionally take it for granted.

If you’re not filthy rich, then the market rent may help you and your family financially, so because you want to help your friend, your family is taking a hit because of your generosity.

Because you charge lower rent, it’ll be difficult to increase your friend’s rent to market value later.

Let’s say you are charging them $500/month when market value is $750. When the time comes where you want to charge them market value rent, let’s say it’s $800 by then, the $300/month increase may upset them as it’s a 60% increase in what they were used to paying.

It would only be 6.7% increase if you were charging them $750/mo originally.

If you really want to be a rich landlord, then you have to start treating your rental investment property like a business and your tenant is #1, your VIP client and he/she may be your friend, but that is secondary if you are treating it as a business.

If it’s a business, then you are the business owner. You are to provide exceptional customer service all throughout.

You are to follow up, offer a complete guide of expectations your client should expect of you. You should be adding value to your client on a regular basis. Here are a few ideas you can use:

You should be visiting you rental investment property on a quarterly or bi-annual basis to see if the tenants are keeping the property in a good condition.

But instead of calling it, “regular home inspections”, just visit your tenants regularly and use those opportunities to ask if they need any help or support from you as the landlord in regards to any problems they may be having.

Maybe their dishwasher is having problems and the tap is leaking water, etc…

Make a note of your tenant’s birthdays or children’s birthdays and send an e-card or even better, handwrite birthday cards and maybe add a Starbucks gift card or something similar to bring a smile to your tenants’ faces.

Offer your tenants a complimentary professional cleaning from a maid, maybe once or twice a year to just thank them for paying the rent on time and being a great tenant.

If you incorporate these simple ideas, you are probably better than 95% of the landlords out there. I go into more details about how you can add value to your VIP client in my book, “The Book on Vancouver Real Estate”.


Rich Landlord, Poor Landlord – Chapter 3: How to Make Your Tenant Love You for Charging High Rents

Gary’s Words of Wisdom (WOW):

You can charge as much as you want if you add enough value.

I talked about adding value in the previous article and I think the key to charging high rents in any business is being able to add value to your customer/clients.

If you look at how high-end businesses justify charging high prices for their products/services, you can learn a lot.

If you want to be the “do-nothing and get paid” landlord, then you can’t expect much and shouldn’t be charging much for rent either.

In order to charge the high rents and the Rich Landlord, you should be adding value and I mean, tremendous value.

In this article, I’m going to show you how you can charge high rents while having incredibly satisfied and happy tenants.

I want to start off by saying, people will pay a premium if you provide a premium product or service.

Let me ask you the following questions to determine whether your rental investment property is low, average or premium quality.

1. Is your property in a premium neighborhood?

2. How old is your property?

3. If it’s not brand new, is the place renovated?

4. Is there anything unique about your property that’s different from other rental properties?

5. Do you have a view?

6. Do you offer 1 or 2 parking spots?

7. Is there a storage locker?

The answers to these questions should give you a brief idea of whether your property is low, average or premium quality. If it’s low or average quality, there are several ways to make it into a premium quality rental property without spending a tonne of money into renovations.

First of all, in order to charge high rents, you have to figure out who your tenants are. Are they students? Business executives? Medical professionals? Young families?

Some of the tips below can be tweaked slightly to cater to different clientele.

Tip #1 – Offering bi-annual or quarterly dry-cleaning for your tenants’ suits

Tip #2 – Providing bi-annual or quarterly professional maid cleaning for your tenants

Tip #3 – Giving a free monthly transit pass to your tenants as a gift

Tip #4 – Offering a monthly discount on rent if the tenants pay rent early

Tip #5 – Giving your tenants handwritten birthday cards on your tenants or tenant’s children’s birthdays

Tip #6 – Offering to upgrade the appliances every 5 years

Tip #7 – Bundling utilities, cable TV and internet into the rent and offering tenants a free pay per view movie every month or upgrading their internet speed for a few months.

Tip #8 – Develop a partnership with a handyman that will be the exclusive repair person for your property and offer the tenant a direct hotline to the handyman with any problems

Tip #9 – Taking your tenant out for lunch or dinner quarterly, bi-annually or annually and thanking them for being a great tenant

Tip #10 – Offer to upgrade the flooring for the property every 10 years

Tip #11 – Offer to provide a professional letter of recommendation or letter of reference for your tenant that they can use if they want to move somewhere else.

Tip #12 – Fully or partially furnishing the rental property

The key is to think of creative ways that add value to your tenant that other landlords aren’t doing.

If you are providing a service to your tenants that few or even no other landlord is doing in town, then you are considered a premium landlord. There are no comparables and so you are able to charge premium rents.

The tips above are very brief, but if you want to go into more detail, feel free to contact me at 778-862-9787 and I can give you some more detailed steps and tips and strategies.


Rich Landlord, Poor Landlord – Chapter 4: The 5 Stages of Rental Return on Investment

Gary’s Words of Wisdom (WOW):

Is it a good investment? Look at the numbers.

There are many people out there who become landlords but they don’t really know if their investment is making money or not.

The key reason is that they don’t know their numbers.

Many think that just because the tenant’s rent payment covers the mortgage, they’re doing ok. But, are they?

If the tenant’s rent is $100 more than the mortgage, are they really getting a $100/month positive cash flow?

In this chapter, I’m going to outline the 5 stages to calculating rental ROI (Return on Investment).

Stage #1: The Rent Covers The Mortgage Payment

This is where the rent the landlord is collecting is equal or greater than the mortgage payment. If it is equal to the mortgage payment, many landlords would think they are breaking even.

If it is greater than the mortgage payment, many landlords would think they are obtaining a monthly positive cash flow.

To start, I want to introduce the formula for ROI.

ROI = Income/Investment

Let’s illustrate this with an example:

Joe bought a rental property apartment unit for $300,000. The interest rate is 3%, 25 year amortization with a 25% down payment. His mortgage would be $225,000 and therefore his mortgage payment each month is approximately $1067. He rents the unit out to a tenant for $1100/month.

Joe’s Income (Monthly) Joe’s Expenses (Monthly)

Rent $1100

Mortgage $1067

With this, Joe thinks he’s making $33 in positive cash flow per month. With $33/month in monthly cash flow, what is the ROI? What is Joe’s income? It is $33/mo or $396/yr.

What about his initial investment? Many would make the mistake of using $300,000 but what Joe had to take from his own pocket was only his down payment of $75,000.

Therefore, it’s $396/$75,000 = 0.528%

How is that for a return?

One key thing that Joe is forgetting is to include the basic fees associated with rental properties. These include strata fees, property taxes, home insurance and such.

Stage #2: Does The Rent Cover The Basic Expenses?

So, let’s include these fees into the equation. Let’s say strata fees are $300/month, property taxes are $2000/year or $167/month and home insurance is $50/month. How does the table look now?

Joe’s Income (Monthly) And Joe’s Expenses (Monthly)

Rent $1100

Mortgage $1067

Strata Fee $300

Property Tax $167

Home Insurance $50

Total $1100 – $1584

Balance -$484

After including the basic apartment fees, based on this table, it looks like Joe has to fork out $484 out of his own pocket, so his return on investment is quite low.

His ROI now is (-$484 x 12)/$75,000 = -7.7%.

How many of you like a negative return?

Stage #3: Unexpected and Future Expenses?

So, what about unexpected expenses and future expenses? What if you couldn’t rent your unit out for a month when your current tenant leaves? Shouldn’t you factor that in?

What if you are tired of managing the property or you want to go on a trip for a few months and you need someone to look after your property? What then?

In this stage, top real estate investors would factor in a vacancy allowance and a property management allowance.

The vacancy allowance is a percentage or number which would be equal to 1 month of rent out of the year in case the tenant vacates and you couldn’t find a replacement for 1 month.

1 month out of the 12 months of the year is 8.3%, so the number would be 8% of the monthly rent.

The property management allowance is the percentage that property management companies charge to manage your property, typically 8 – 10%. Just to be conservative, let’s go with 10% of the rent fee.

How does the table look now?

Joe’s Income (Monthly) And Joe’s Expenses (Monthly)

Rent $1100

Mortgage $1067

Strata Fee $300

Property Tax $167

Home Insurance $50

Vacancy Allowance $88

Property Management $110

Total $1100 – $1782

Balance -$682

So, based on this calculation now, the ROI looks even worse now.

ROI = (-$682 x 12)/$75,000 = -10.9%

Now you’re probably thinking that you won’t include the vacancy and property management allowance because you’re planning to manage the property yourself and your tenant is never going to vacate, but it’s always prudent to calculate these factors in and if your tenant doesn’t vacate, then you can always put that extra money into an emergency fund for necessary repairs and such. The same goes with the property management fund.

Stage #4: Your Tenant Is Paying Your Mortgage

So you’re probably wondering based on those numbers, how in the world you are going to make money? In this stage and the next, advanced real estate investors incorporate some numbers to make this a profitable venture.

If the rent you are charging your tenant covers at least the mortgage payment, then you are actually making some money.

Your mortgage payment is likely blended interest and principle, meaning in the 1st few years, 50% of the mortgage payment will go towards the interest and 50% of the mortgage payment will go towards the principle.

Near the middle and the end of the mortgage, more and more of the mortgage payment will go towards the principle and less to the interest.

In that case, your tenant is actually putting equity into your rental property—approximately 50% of their rent is going towards it in the beginning.

So, if Joe’s mortgage payment is $1067, then $533.50 is going towards the principle every month. How does the table look now?

Joe’s Income (Monthly) And Joe’s Expenses (Monthly)

Rent $1100

Mortgage $1067

Strata Fee $300

Property Tax $167

Home Insurance $50

Vacancy Allowance $88

Property Management $110

Tenant’s Rent Towards Principle $533.50

Total $1633.50 – $1782

Balance -$148.50

Now, all of a sudden, it’s not -$682, it’s -$148.50.

So you’re ROI is (-$148.50 x 12)/$75,000 = -2.4%

Stage #5: Asset Appreciation

Ok, you are still at negative ROI, but don’t forget properties over the long run do appreciate in value. Houses on land obviously appreciate faster but apartments do appreciate as well.

Apartments generally appreciate around 3% per year, but to be ultra conservative, let’s use a 1% asset appreciation value. So, Joe’s $300,000 appreciates 1% or $3000/year or $250/mo. How does this affect the table?

Joe’s Income (Monthly) And Joe’s Expenses (Monthly)

Rent $1100

Mortgage $1067

Strata Fee $300

Property Tax $167

Home Insurance $50

Vacancy Allowance $88

Property Management $110

Tenant’s Rent Towards Principle $533.50

Asset Appreciation $250

Total $1883.50- $1782

Balance $101.50

Finally, you are at a positive monthly cash flow value. What’s the final ROI now?

ROI = ($101.50 x 12)/$75,000 = 1.6%

You might not think 1.6% is very much, but if you play around with the numbers, this ROI can actually be much higher. I was conservative in the property tax, home insurance, property management fees and the asset appreciation amounts.

You’ll find that if you play around with these numbers, you’ll obtain a greater ROI than you had previously imagined.


Rich Landlord, Poor Landlord – Chapter 5: How to Attract the Right Tenants and Filter Out the Wrong Ones

Gary’s Words of Wisdom (WOW):

Know who your target market is and target them.

So, now you know the mindset you need to be a successful landlord and the creative strategies to increase the rent and how to calculate the numbers so that you’re getting a good ROI.

It’s time to find your clients.

The typical landlord posts a very simple ad on the local paper or on Craigslist but have you seen the kinds of ads on Craigslist. Many of them have 1 or 2 sentences on them and they are the opposite of attractive.

The description is incredibly boring, there are no pictures, and there’s just nothing attractive about them. If you own a beautiful rental property but your marketing skills are horrible, then you’ve got a problem.

You may have the most beautiful rental property on the block, but no one will know about it if you suck at advertising.

There are many things to consider when doing advertising for your ad. You don’t just write “2 bedroom for rent, call now”. How are tenants going to know what your property is like if you don’t show them?

In an age where potential tenants are shopping around for the best place to rent, if your ad sucks, then not only are you not going to get calls but if you do get calls, you are probably not going to be attracting your ideal tenant.

Target Market

The first thing you need to know about advertising is who you are advertising to. Advertising to students is going to be different from advertising to business executives or medical professionals.

Is your rental property close to a university or college? Then maybe it should be targeted to students. Is it close to a hospital? Then, it should be targeted to medical professionals. Is it in the downtown core? You get the point.

Who you are advertising to will affect how you write your ad and what features and benefits you emphasize. Remember, you are operating as a business owner and you need to know who your ideal client or tenant should be.

Ad Copy

The next thing you want to do is be detailed and descriptive in writing your ad. Don’t just write the features of your rental property. Emphasize the benefits of the property and explain how it is a benefit to your target audience.

If it’s got a patio, don’t just state that the apartment has a patio. Talk about how the patio is great for bbq’s and suntanning with your patio furniture and sipping coffee on an early Saturday morning.

Incorporate good copywriting skills into your ad copy. There are tonnes of free online resources that will give you tips on how to write effective ad copy. You can also check out my book, “The Book on Vancouver Real Estate” for some great examples and tips on how to write a good ad.


The third thing you want to always add in your rental ad is professional pictures and video.

Don’t take pictures of your property with your smartphone. Hire a professional real estate photographer to take professional pictures and video of your property that you can use for the long run.

The couple hundred dollar investment makes a huge difference when attracting the right tenant. Don’t cheap out on the quality of the pictures.

If your pictures aren’t even professional, in a potential tenant’s mind, how nice could the property actually be? Also, by using professional photography, it shows that you are not an ordinary landlord and that you take pride in your rental property.

This is especially important if you are charging high rents for your property. How could you charge premium rents if your ad doesn’t look premium in that it has no photos or the photos on your ad are flat out ugly?

If appropriate, include a professional video as well and have that uploaded to youtube and let potential tenants access a virtual tour.

Floor Plan/Added Benefits

The fourth thing you may want to incorporate is to hire a professional to measure your apartment and do up a professional floor plan for you. It only costs about $0.10/sq ft and you get a professional looking floor plan that you can put as one of the pictures on your ad.

This really helps your ad because potential tenants are always thinking about the layout. This is especially important if your rental property is not that large.

A floor plan can help tenants picture whether the property would fit their needs without them having to go to the property.

That way, it’ll save you a lot of time as the tenants who actually call you are the ones who are ok with the layout of your property.

Are there any other added benefits for a potential tenant? Are you offering any bonuses that other landlords aren’t offering? Use bonuses to attract your ideal tenant. What is considered a bonus?

Think of ways you can add value to your tenant that other landlords don’t do. I covered a few tips in the last article and there are more tips in my book on my website.


The last thing you could do to really set your ad apart from others is to create a website for your rental property. With a website, you can upload pictures, videos, floor plans and more information about your rental property.

If you have additional rental properties, you could also cross-promote them too when people visit your website.

Who knows? Your potential tenant may not like your property but they may see another rental property of yours and fall in love with that one. Or, they may know a friend who is looking for a property just like another one you advertised on the website.

You could also include useful articles and forms on the website, such as residential tenancy forms, and resources from the Residential Tenancy branch office and some important contact information for tenants.

I hope that you found this Rich Landlord, Poor Landlord series interesting and filled with value for you. I have many other guides that you can find on my home page and I’ve even written a best selling book on Vancouver Real Estate that you can grab a FREE copy of for a limited time here.

Want sell your or know someone that wants to sell their home fast and for maximum value? If your answer is “Yes” then call one of Vancouver top home selling realtors, Gary Wong, to help you with selling your home with all the steps above and more. Call 778-862-9787 or fill out this simple form.

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