Ep029: Protecting Rental Profitability in 2026 – What Smart Landlords Are Doing Right Now (Pillar #1)

Chris McAllister: Welcome to the Landlord Profitability Playbook podcast. I’m Chris McAlister, and it’s my job to create and coach business opportunities and strategies that support and add value to real estate investors like you. I’m here today, as always, with my partner in crime, Laci LeBlanc. Good morning, Laci.

Laci LeBlanc: Good morning, Chris. How are you today? 

Chris McAllister: I’m hanging in there. I’m hanging in there. Great. 

Laci LeBlanc: Well, you’re… He’s fresh off of a trip, you guys down to the Big Easy. Uh, it was technically for a conference, but I think it was more for some good food from what we’ve, we’ve discussed. But perfect timing because today we’re gonna kick off a brand-new three-part series for the Landlord Profitability Playbook podcast.

It’s called What Smart Landlords Are Doing Right Now. Um, our first topic that we’re gonna go over is margin compression, why rental profitability is harder to protect in 2026. So Chris, before we talk about what margin compression means, because those are big, fancy words, uh, talk to me about why we’re addressing this topic right now.

Chris McAllister: Well, I think before we jump into that, we gotta address my trip to, uh, New Orleans. So we actually went down to New Orleans for the, uh, National Association of Residential Property Managers, or NARPM, uh, annual broker/owner convention. So there were property management, uh, professionals and companies from all over the United States there this week, so we got to meet you know, a lot of folks that have similar businesses to what we have, a lot of folks who have, uh, businesses that, uh, you know, we aspire to become, and talked to a lot of vendors and got a lot of terrific information.

But you’re absolutely right, I did get my share of, uh, fried oyster po’boys, so in that respect it was a, it was a pleasure, not just business. But the whole thing about, you know, what smart landlords are doing right now, y- you know, this, this sort of came up and Laci, this was your idea, and it was a great one.

But I think I, I got excited about it because I don’t know how to describe what I think most of our owners are feeling, you know, right now, other than it’s just a sort of a general malaise, right? I don’t know how good a word that is, but it’s a general malaise. You know, when, when Gretchen talks to owners, when I talk to owners, when we do our portfolio reviews, and, and even talk to prospective new owners that, that wanna check us out and see about hiring us for management, there’s just a sense that we’re sort of- stuck right now, and not necessarily stuck in the best place, you know, you’d wanna be stuck at. There’s nothing sexy going on in the market. There’s not a lot of great deals happening. It seems like anybody who might wanna sell or reposition their portfolio is sort of stuck, you know, waiting to see what happens in the world in general.

You know, this is, uh, you know, May 2026, so we’ve got things going on in the Middle East. We’ve still got tariffs we’re fighting and, you know, gas prices, you know, here in… I, I drove down, uh, South Limestone Street, Springfield, Ohio yesterday and regular gas in Ohio was five bucks and, you know, diesel was six.

So I think all those kind of things that are going on in the world, uh, just, uh, make us feel, I don’t wanna say scared, but I… But they don’t necessarily make us wanna, you know, go out and make a, make a lot of expensive decisions. How’s that? So people are sort of keeping their cards close to the vest and, you know, just, uh, not to, uh, you know, give- bury the lead here or give away the plot of today’s podcast is, but everything’s about execution, and quite frankly right now, execution just isn’t really as much fun as buying a new property and putting it in service.

Does that make sense? I feel like I’m rambling, but… 

Laci LeBlanc: Yeah. No, it does. I think malaise is a great word. I think you’ve been influenced by Cajun culture a little bit. Uh, but I think that the question is, is how do you maintain your profitability? How do you increase your profitability even in, quote unquote, times like these, right?

When you, when things are kind of generally are uncertain. Yeah. And the first, uh, the first, the first part of that definitely is defining margin compression and figuring out where to go from there. 

Chris McAllister: Well, margin compression just simply means that margins are getting tighter, right? Landlords are getting squeezed from all sides.

You know, rent increases aren’t happening anywhere near like they were in many parts of the country. Rents are actually going down. You know, prices are going up, insurance is going up, taxes are going up, and what it means is our, our operating margins, our profit margins are being squeezed. They’re being compressed.

And what that really means is, is that there is just simply less room for error. You know, a lot of rental owners are, you know, they’re still collecting rent, they’re still keeping their properties occupied, but we’re not… A- and I, and I, myself included, we’re not feeling the same profit or comfort level with our profit margins that we used to feel.

And again, insurance, taxes, repairs, my God. You know, I saw statistics last week that you know, repair costs since COVID have gone up 40% and more in some market, right? Turnovers cost more. You know, i- i- it’s, it’s- It, the facts are the facts, but it still doesn’t help when, you know, any of our owners or myself included, has somebody move out and, you know, maybe they were in there three or four years and, and there needs to be some work done to the property to get it ready.

It just costs more than it did the last time we had a turn, right? If that makes sense. You know, it’s… You know, it was, it was… So many of us have been fortunate that we’ve had, you know, long-term tenants, and the last time we had to do a turn it was, you know, maybe $2,000, $3,000, and now the property managers are calling up and saying, “Yep, this one’s gonna be six or seven.”

And that’s just a hard pill to swallow. It’s tough to take. So everything costs more, and rent growth isn’t as dramatic as it was, you know, a couple years ago, so consequently it, it just doesn’t cover I want to say it doesn’t just cover mistakes. It certainly doesn’t cover mistakes, but it also doesn’t feel like it’s covering y- you know, what things cost with any sense of comfort or security.

Laci LeBlanc: Yeah, so I think people hear margin compression, they hear kind of, um, profit compression, and they think about vacancy, but this is really not just about vacancy. I’m sure vacancy is part of it, but explain that to me. 

Chris McAllister: Well, vacancy is a part of it, but it’s not the whole story. You know, a property can be occupied and still underperform, and that’s one of the biggest mistakes landlords can make.

They assume if rent is coming in, everything must be okay or everything is going to be okay. And we have pushed really, really hard to help our landlords raise rents even in- Occupied units where tenants have been there for a while, right? And, and there’s still many instances where you know, we have, we have owners for all the right reasons, where, you know, their current rents are still 10, 15, 20, maybe 30% less than what the market would bear if it was fixed up and on the market today.

But rightly so, they don’t want to, you know, have a drastic increase in rent, lose the tenant, end up incurring that giant turn cost, right? So, you know, we, we always work with the owners and sort of prescribe this is where you’re at. This is where you could be. You know, why don’t we make a decision together and decide how we want to raise the rents over the next one, two, three years with the goal of getting the property back up to market rate, but also preserving that, uh, that current tenant and that current tenant relationship.”

You know, a property can be full and still have, you know, less than optimum cash flow because of the top line rent. But then also, of course, as we’ve already beat to death, the costs are rising faster than it, than a lot of our owners can adjust or are adjusting to. So you can be under-rented and still have too many repair costs and it just…

Again, it just means that margins feel thin, that we just don’t feel as financially secure right now at this brief moment in time as maybe we did a year or, or two years ago. And then you’ve got the whole thing about execution, right? If you add onto that that you, you know, whether you’re managing yourself or you’re, you’re using a property manager, slow to respond to maintenance, slow to, to perform preventive maintenance, you know, poor leasing execution, you can have a property that, you know, is, is, moving right along, but there’s so little margin that one big repair, uh, can not just wipe out the month, I mean, it can wipe out the whole year. So anyway, in a nutshell, occupied doesn’t always mean healthy and we have to be vigilant in times like this to make sure that we’re doing everything we can to work both sides of that equation.

Laci LeBlanc: Yeah, I think that’s the big takeaway so far anyway, is occupied does not always mean healthy. Why do you think that matters so much that, that investors understand that right now, and how do you address it moving forward? 

Chris McAllister: Well, you know, the, the market is just simply less forgiving. You know, there was a stretch where rising rents, you know, were definitely, uh, raising all of our boats.

Appreciation was going crazy. This seems like forever ago, but you know, there was a lot of cheap money out there, and we’re still recovering from the hangover. The other thing that’s happening that none of us wanna talk about, but it’s true, and we saw stats last week from the different, uh, leasing and marketing vendors at NARPM, it is taking- longer, a lot longer in some cases than it did even a year ago to get vacant properties rented.

And the percentage of owners that have had to reduce the rent at least once to attract qualified applicants is, is, is going up and up. So we just don’t have that float of rising rents, appreciation, and cheap money right now. So again, it all comes down to execution, and there’s a lot more product on the market.

I don’t care if you’re in Nashville, Columbus, you know, Orlando, the Midwest, there are new apartment buildings going up everywhere. Those, uh, those five and six story structures that are, are cost-effective because if you go any higher, you know, you have to do different things for fire safety and so forth.

A lot of those that, you know, started construction a year or two, three years ago, they are fully online. So in many situations, there is a lot more to choose from for you know, prospective tenants. So there’s, th- there, there’s more supply and the number of, uh, people looking to rent in most cases hasn’t gone up.

So all those things are I don’t wanna say working against us, but I guess in effect they are working against us. And, you know, when the cushion gets thinner, the mistakes get louder and, you know, if you have a property manager that is even just average, I, I hate to say it, uh, you’re likely gonna feel it this year.

Laci LeBlanc: Yeah. So we, we talked about how this is gonna be a three-part series, and we’re referring to these parts as pillars. So let’s talk about one of the points from this pillar, and that is how rising costs are eating cash flow specifically. We’ve mentioned it, we’ve kind of glossed over it, but you know, most landlords already know that costs are up.

That’s not a hard thing to figure. I mean, costs are up for us individually at the grocery store, when we need our home repaired personally, if we need a car, you know, whatever. Everything is rising. So it’s no secret that costs are up, but is there something that landlords could be missing about the rising costs?

Chris McAllister: They’re missing the fact that many of us, and I say us ’cause I, I’m the victim of magical thinking as well, many of us just sort of go forward and operate and manage like nothing has changed. And, you know, we’ve talked to a lot of owners, some are folks that we work with now, folks that we may work with in the future, and they just haven’t faced up to the fact that the market has changed, the costs have changed, and so forth, and that’s, that’s the real issue.

You know, once you tell the truth to yourself or once you tell the truth to your spreadsheet, you start to see that, wow, I either have to do this to, you know, cut some costs, I, I… or maybe I have to, you know, adjust as to what I’m taking out of the business or expect to take out of the rental business each month, or I need to figure out how to raise the rents, if not in the short term, then over the next one, two, three years, right?

Y- y- you, you… the first step is that you have to accept the fact that things have changed, and that how you manage and the expectations you have for your property or your portfolio have to change as well. You know, again, everybody knows insurance are up, they know taxes are up, they, they know repairs are more expensive, but they just really haven’t come face to face with it and, and stared into the abyss of the arithmetic.

So a lot of times, you know, they, they, they know this is happening it’s just hard to face, and then sometimes, you know, decisions start to get delayed. You know? So maybe some preventive maintenance that really does need to be done to preserve the value of that property down the road doesn’t get done.

Maybe repairs that need to be done for a tenant are slow, which just compounds the problem. Maybe the, the leasing, you know, maybe the marketing isn’t where it needs to be. Maybe the lease price isn’t where it needs to be. You know, what do you have to do as an owner to provide incentive in a tighter and tighter leasing market?

You know, delaying those decisions is only prolonging the agony, and it… and again, there’s just not a lot of cushion right now. So smart landlords, right? They understand that when costs rise, execution has to get tighter. And you may not control the insurance market, but you can control how quickly you approve work, right, that needs to be done, how fast you get a, uh, can add the funds to get a property re- ready, how well you manage maintenance, you know, and how closely you track performance and, and, you know, what, what you demand of, of yourself if you’re self-managing, and what you can demand and what you should expect from your property manager if you’ve hired somebody to help you out 

Laci LeBlanc: I really think that last part is a very valuable point, and we need to reiterate it, how closely you track your performance.

Because I think that when you have something broken, um, when you need, you know, to make a turn, those things all feel pretty urgent and they get addressed. But the one thing that can fall by the wayside, and typically does first, is you tracking your performance, right? You really looking at those numbers.

You really… Like, that’s, that’s like your once monthly thing that you might do. But, you know, as long as you’re paying all your bills, it doesn’t feel urgent. But in these cases, I think that, you know, knowing how you’re doing and knowing the actual numbers, you know, you said the first step to identifying…

To solving a problem is identifying that there is one. Yeah. So I just think, and, thinking of Nana here, you know, she definitely keeps an eye on her numbers. She knows how much things are costing her. But is she really looking deep down at where she’s at today versus where she was six months ago?

Because it c- it can be a slow creep. Even if there’s a marked difference in six months, you know, that difference happened one-sixth at a time. Does that make sense? 

Chris McAllister: Yeah. 

Laci LeBlanc: Yeah. And that leads into your, another one of your points, which is that breaking even is not your comfort zone. A lot of lon- landlords, uh, might push back on that and say, “Well, if I’m not losing money, I still have…

You know, my property is still appreciating over time,” or… right? But what would you say to, to those folks? 

Chris McAllister: I would say that if you’re simply breaking even and you’re one $500 repair away from, you know, having a really bad month personally and in your rental property, that’s fragility, right? And if you’re, if you’re only breaking even, or in some cases, you know, on a s- on a property, maybe we bought it expecting that breaking even was the best we can do.

But breaking even is… It means that the property is fragile, right? If the property only works when nothing goes wrong, then it’s just not working very well at all. And I guess that, that is the hard truth that I’m trying to convey today. I want to repeat that for myself, right? If the property only works when nothing goes wrong, then it’s simply not working very well.

You know, again, one vacancy, one HVAC repair. Oh my God, HVAC. I guess they changed the rules again on Freon. You know, we used to be able to do, you know, HVAC replacements, just the hardware alone, you know, for like 2,500 bucks. I haven’t bought one this year or the past 12 months for less than 3,700.

It’s another s- another indication where, you know, the last time, you know, we had to do HVAC repair, it was this, and now, you know, your property manager or your contractor’s telling you it’s this. Those are hard pills to swallow, right? And that’s what I mean by, you know, you’re one, one bad- You know, invoice away from, you know, having a bad month or a bad year.

One plumbing issue, you know, one insurance increase, one tax- oh my God, property taxes in Clark County here in Springfield went through the roof this year because it was the triennial or whatever. Anyway, w- it- all it takes, you know, is, is one unlucky incident to push a thin margin property into the red.

And we know, a- and we’re super sympathetic, uh, that a lot of our owners are struggling with this. I mean, we talk to them every day. We hear the conversations. We know that, you know, if they have to put money into the property through the portal, that nobody’s ever excited about it, but it seems to take a little bit longer to get those things, you know, to happen this year for a lot of folks.

And it’s not like we’re in a catastrophe by any stretch of the imagination. I just really want people to keep their eyes open, look at their numbers, and be real with themselves about what things are costing because there is no reason at all to believe that these costs are going to go down anytime soon, and honestly, if, if ever.

So you gotta face it, you gotta plan for it, and you gotta understand the numbers. So anyway, when somebody tells me they’re breaking even, I don’t hear safety, I hear exposure. Breaking even is not a long-term strategy. Yes, I, I understand that, you know, if you have a mortgage that, that, that mortgage is being paid down and part of that mortgage is some principal payment, and I think we have to ke- keep cognizant of that, but there is still no cushion.

You know, there’s no room for delays. There’s no room for weak execution. There’s no room for average this year. 

Laci LeBlanc: Yeah, I think that what I hear specifically in this section is, we’re a property management company, and part of this podcast I’m sure people expect is to sell our services as a property management company.

And you know, a lot of times we do have ways to tell people, “Yeah, what we do can help increase your profitability.” These are, rising costs and, you know, margin compression is something that affects you. It, it’s not like hiring a good property manager is gonna fix it, right? Like, we’re still paying more to do, to do the repairs.

We’re still, looking at longer leasing times in some cases. Uh, but I, you know, I just wanted to point out that this is something that affects everyone across the board. There is no magical thinking. There is no magic fix for this. And so, while we can talk about the ways that good property management is going to help with this, that, that applies whether you’re managing yourself or whether you have a company.

But I don’t want people to think that if, “Oh, I’m self-managing. If I hire a property management company, all this is gonna be… They’re gonna fix all this for me,” because that’s just not the scenario. This is kind of a across the board situation. Yeah, but 

Chris McAllister: I will, I will say that- and we’ve had this situation, which is very positive, where people have hired us more out of convenience, but because, you know, we have some economies of scale, because we do it every day, because we have such a large, you know, team with specialized people who do specific functions, we have had owners that are more profitable with us than without us.

Uh, and I, I think that’s, uh, uh, you know, important to, to highlight that. You know, if you’ve got… You know, our average owner at Roos Real Estate Company has three, um, three properties with us, right? We actually have, uh, I don’t think it’s more than 25% of our owner base is a single property owner. You know, we’ve got folks th- that are, you know, pretty intentional about their investing uh, I don’t wanna say, is it investing career?

Their investing activities. So they… I don’t know what I’m trying to say there, Laci. I mean, they, they’re well aware of the fact that, the rents aren’t going up like they, they used to, that there’s been a shift. But again, it’s just sometimes hard to, hard for them to articulate it, and obviously it’s hard for me to articulate it today as well.

But yeah, at, at the end of the day, a lot of our owners got used to rent growth helping them out. And for, uh, quite a while, the, the market covered up a lot of bad habits. You know, a landlord could be a little bit disorganized, a little slow, a little casual, and the property could still look pretty good because, yeah, the rents kept going up, and we just don’t have that right now.

So if your old strategy was to let the market fix your weak performance, it’s a problem. If leasing is slow, you’re gonna feel it more. If maintenance is sloppy, you’re gonna feel it more. If turnovers cost too much, you’re gonna feel it more. The, the easy from, help from the market is weaker now, so the burden shifts back to operations.

And if you don’t feel like you’re a good operator, I really urge you to talk to some property management companies in your area and see if they can help you tighten up your operations. Because it, it is a real possibility, and it happens a lot, that hiring a property manager, a good property manager, is not a cost.

It truly becomes an investment that’s gonna return you know, far greater than you trying to, to do all of this yourself. 

Laci LeBlanc: Yeah, I mean, I think that’s exactly the point that I was trying to get you to make If we’re completely honest, is that… No, I mean, it does. It, it, if you’re operating, I don’t wanna say subpar, but if you’re operating subpar, right?

If there, if you could be operating better, then there are lots of instances where hiring a property management company doesn’t cost you a thing, it makes you more money, and that’s why this is called- Yeah … the Landlord Profitability Playbook podcast in the end. Yeah. So, um, well, that brings me- Well, you know, we always 

Chris McAllister: urge people, we always urge people to, you know, w- we wanna help you automate your rent collection and get on with your life, but the other part of that slogan is we wanna help you make more money, right?

We, we, we, you know, you can only work so hard, and most of our owners have full-time careers, and, and, and jobs, and families, and everything else. Very, very few of our owners, don’t have a job a- and, and quote, “live off their portfolio.” A- and this is just a fact. You c- you, you’ve got a lot of things going on in life.

You can’t work any harder, and it’s even hard to find time to go get smarter, right? So again it, I know it sounds self-serving and I don’t mean it to be that way, but if you find that, you know, you’re really starting to sense and feel and stress over the fact that things are a little bit tighter right now, this is not the time to ignore the possibility of hiring help.

This might be the time to make some calls, take some meetings, and find out what a qualified licensed property manager can do for you. 

Laci LeBlanc: Yeah, I think that’s an amazing point, and we haven’t even discussed that part of it, right? So we talk about how, rent’s not increasing or, you know, insurance or a plumbing failure or those things could definitely cost you in the end.

But w- what about life, right? What if you get sick? Yeah. What if somebody that… Like, what if you need to travel? What if work gets crazy, right? Like, what- Yeah … what if life happens and these things even, not even related technically to, to your properties take you out of it for a moment? And, and that certainly could impact then your profitability as well, so something to keep in mind for those who are self-managing, for sure.

Yeah. Um, but I wanna move on to your fourth point, which is the easy money phase is over. That is scary sounding for a lot of people, I think. What do you mean by that? 

Chris McAllister: Well, again, I, I, the rules have changed, the math has changed. The market has changed. There was a time, again, where appreciation, rising rents, and cheap money made a lot of owners look smarter than they really were, quite frankly.

And I’m not saying that those owners were doing everything wrong, they weren’t. I’m just saying that the market was very forgiving, and the market today is less forgiving. It- And this is important. That doesn’t mean that rental property is a bad investment or anybody listening who, who, feels what I’m saying, it doesn’t mean that the property you purchased was a bad in- investment, right?

You know, I still believe wholeheartedly, even in weird times like this, that there is no better way in the United States of America to grow long-term real wealth than through real estate. But what I’m trying to say is you just don’t win the same way today that that you won with, say, two, three, four, five years ago, or even last year, quite frankly.

So what does re- what replaces easy money? Well, the only thing that replaces easy money is execution, and that starts with telling yourself the truth, knowing your numbers, making… getting yourself in a position that you know where you’re at so you can make decisions faster. If when the market does change and suddenly there’s new opportunities, you wanna be prepared to act if you’re interested in expanding your portfolio.

You wanna work very, very closely with your property manager where it comes to managing costs for repairs and, and maintenance, and just costs overall. I, I… there’s just so many things that, you know, go into all the things it takes to manage a property, th- whether it’s the price of, you know, gas, uh, that the, uh, mowing guy, right?

Has to purchase, right? So the price of mowing lawns is going up these days. You’re seeing vendors with service charges and, and gas surcharges, you know. You’re, you’re just seeing things pop up everywhere, and if you have a good property manager who has good relationships with vendors, he’s gonna have a better handle at controlling costs across the board for his several…

his portfolio of owners than an individual person, is gonna be able to pull off. So you gotta pay attention to month-to-month performance, and I do this myself. I look at my portfolio. How did we do this month? How did we do last month? Am, am I, am I moving in the right direction? So again, know your numbers, be prepared to make quick decisions, be cost conscious, be real about your numbers, you know, be involved in maintenance or, or, or have a property manager you trust to control maintenance cost.

Those are the best tips I can give anybody listening of how smart landlords are protecting their profit now and how you, if you don’t feel smart… like, there’s days I don’t feel smart either, but this is, this- these are just tips for things that you need to do to protect your profit now and in the years to come.

Because if we can tighten up operations now, when things loosen up again, we’re gonna be that much more, that much happier. 

Laci LeBlanc: Yeah, I think that’s a really good point we could dig a little deeper into. There are landlords who are doing really well right now. What are those folks doing differently than the people who are maybe feeling the malaise?

Chris McAllister: Oh, I, I would say that the landlords that are, doing a, with, enjoying above average performance right now. Let- let’s put it that way. Just because they’re above average doesn’t mean that they’re any happier with where things are at versus what they wish they were. But I would say overall they’re asking better questions, right?

They’re not just asking, “Is the property occupied?” They’re asking, “Is the pro- property truly profitable? Are costs slowly draining my return? Are repairs being handled the right way? Are turnovers moving fast enough? Am I making decisions quickly enough? Is my property manager helping protect profit or just keeping things moving?”

And the, you know, those are important questions. And you may not have all the answers, but at least it’s a place to start to get you thinking and get the an- get the answers. So the smart landlords these days, they’re getting very serious and very honest about the gap between surface performance and real performance that’s gonna set them up for success for the next, one, two, three, four, five years and beyond.

Laci LeBlanc: Yeah, and you know, we just talked about this kind of off, off, um, the, the script. But let’s talk a little bit more. Let’s r- let’s revisit how, um, owners should think about property management in this type of market. 

Chris McAllister: Well, I don’t want owners to think about property management as a convenient service only, although, you know, having somebody else automate your rent collection so you can get on with your life, that’s a pretty compelling offer.

I get that. But in a tighter market, property management is about protecting your margin. That means protecting timing, protecting leasing, protecting maintenance execution, protecting resident quality, protecting communication, protecting, you know, the owner from you know, losing focus. A lot of owners you know, they don’t get in trouble because of one giant mistake.

They get in trouble because a series of, you know, just average or below average decisions that slowly eat away a- at their current and future return, and that’s why better management matters in a market like this now more than any other time. 

Laci LeBlanc: Yeah, we’ve talked about this before. I just, I think it’s so valuable to have someone, a second set of eyes, right, looking at your books, looking at what’s going on, m- but also somebody with a lot of different owner clients across, you know, markets, across the city you live in with, at different, you know, investment levels or with different rent levels.

That- Kind of overall knowledge is invaluable in predicting trends. It’s, I mean, it’s part of the reason that we’re doing this series is because we’re seeing things happening at a larger scale than maybe Nana would see with her, you know, 10 properties. Um, you know, if you’ve got a property manager who sees things happening kind of real time, then that’s just invaluable information, I think.

And then also, you know, I think that protecting resident, like tenant satisfaction is something that wasn’t on the list, but I think that in a time where there are more options for folks, we talked about that earlier, how there are more options for people to choose where they’re gonna rent, uh, you know, protecting that tenant satisfaction is, is something to think about too.

Chris McAllister: I, I’m glad you brought that up because the once a tenant moves into the property, if they have a good experience on move-in day, move-in weekend, and for the first 100 days that they’re in the property, they are going to be far more likely to stay in the property and renew the property for a second, third year and beyond.

The other factor that is critical t- for people to understand is uh, aside from a great experience at move-in, whether or not regular requested repairs are made in a timely fashion is the other indicator as to whether or not a tenant’s gonna stay past the first year. And what that means is, y- any repair needs to be completed, I’d say on the outside within three business days.

And your property management company, you know, needs to understand how critical it is that those occupied maintenance repairs in occupied units are dealt with quickly, and that it’s turned into a positive experience for the tenants. Th- those are the two things. Anytime they have a problem, it needs to be fixed quickly, no questions asked, hopefully by a very polite, very professional person.

And then the second, of course, is, is, uh, you know, a perfect property at move-in day. You know, we’ve really pushed hard the past three full years now on making sure that our maintenance performance in unoccupied units has been the best it can possibly be. And quite frankly, you know, the reason we’ve got so many five-star reviews from tenants is because of our maintenance.

And we’re already seeing that since we really pushed that initiative over the past two or three years, that our percentage of, of renewals has gone up, I would say probably 30% better than it was even two years ago. So, anyway, uh, uh, how to make tenants stay, right? How do you make love stay? There’s a couple things.

You wanna make a great first impression, and when something goes wrong, you wanna be right there to fix it, you know, as, uh, uh, painlessly as possible. But, you know- This, uh, uh, I, I just wanna stress that this whole series isn’t just for large investors, and again, we do work with a lot of folks that have three plus doors.

But it also applies for people with one to, to two units. In fact, sometimes more. You know, folks with one or two units tend to have less cushion than somebody who can spread costs across an entire portfolio, right? A larger investor may be able to absorb one bad month or one large repair a little bit more easily, but if you own one property or just a handful, one vacancy or rema- a major repair just hits that, that much harder.

So even small landlords, accidental landlords, you know, somebody with one house that they wanted to hold onto because the interest rate is so incredible they can’t give it up, you know, you can’t afford to be casual right now either. You need to get yourself some clarity, you know, get a little discipline.

I I hate to say this, I guess, but just take a little bit more interest or a sharper interest. Anything you can do to, to just improve execution, 1%, 2%, 10%, that’s what the large investors do, and that’s what the small investors need to do too. 

Laci LeBlanc: So w- there have been a lot of good takeaways from this. I, I probably misspoke earlier when I said, “Oh, this is gonna be the takeaway from this episode,” because you’ve said 10 more things that I think-

bear repeating. But if you had to pick one thing , what would you want any landlord listening to this episode to do next? 

Chris McAllister: Tell yourself the truth, look at the numbers, put it on paper. I want you to take a honest look at how your property is really performing, not just whether the rent is coming in, right? I want you to ask yourself, “Do I really know my numbers?

Am I profitable, or am I just staying busy,” right? Are rising costs maybe not so quietly or quietly squeezing my return? And am, am I managing this property in a way that matches what the market requires me to do?” Right? “Am I doing what is the most important thing in today’s market? I don’t wanna keep doing what worked, i- in whatever the market was one, two, three years ago.”

Again, i- it just sounds like gloom and doom, and I don’t… I feel bad about that, but easy money phase is over. Everything that happens from this point forward is about execution, and that’s, that’s what we’re focused on at Roos Real Estate Company. There is nothing more important right now to us than just execution, period.

The landlords that execute well, th- they’ve already started tightening up their sy- their systems. They’re looking at all the data they have to make better decisions, and they know, where property or profit is, uh, leaking out. So again, know your numbers, dig in- Be honest about what’s happening, and adjust your, your operations, adjust your execution.

But I would also urge you to be real and adjust your expectations if, if they need to be adjusted. 

Laci LeBlanc: Yeah, and go listen to our Seasons of Real Estate Investing podcast, because I do think that this is a season. You said it sounded very doom and gloom, and it did sound a little more doom and gloom than we usually try to be here on the podcast.

But it’s all cyclical, it’s all part of the cycle, and this just happens to be where we are right now, I think. 

Chris McAllister: Yeah. A- and, you know, I would say a- not every landlord is in crisis, right? You know, not even most landlords are in crisis. But most landlords, especially the ones that we talk to, they truly are more exposed than they, they realize.

And that’s the real issue in 2026. You know, again, a property can look fine on the surface, still be losing strength underneath. So this is the time to get serious about, disciplined execution. So in this market, profit isn’t protected by momentum, it’s protected by execution, and I’m not gonna say execution again today.

I think I’ve said it enough. 

Laci LeBlanc: Here we are. No, I think that smart landlords are not in crisis, but they sense these… their Spidey sense is tingling, right? Yes. And they can see that things are changing, right? If you’re paying attention, if you’re a smart landlord, you’re paying attention.

And if you’re pa- paying attention, then your Spidey sense is tingling, and this is the time, before full-on crisis hits, to go ahead and make some of these changes if you need to so that you’re not looking back and saying, “Man, I wish I would’ve done the whole last year differently.” You can look forward and say, “What can I do, you know, to be in a better situation- Yeah

in case this uncertainty lasts longer, or if this uncertainty were to become, something more, you know, serious?” So I think that’s what it’s all about. I don’t think that it’s a doom and gloom. I think it’s, you know, it does go back to just being smart. 

Chris McAllister: This is the opportunity to be real about where you are.

Don’t try to rehash the past or, you know, beat yourself up for any past decisions, but this is the time to be honest about where you are and make whatever adjustments you need to make so that you can be as profitable as you can possibly be going forward for the next one, two, three, four years plus.

Laci LeBlanc: Absolutely. So we will do, um, the next two parts of this series, where we impart some more, um, knowledge. Hopefully a little less doom and gloom in the next ones, but we’ll see, you know. Not every podcast episode can come right off of a trip to New Orleans, so. 

Chris McAllister: Well, next, uh, the next two episodes are gonna be pillar, pillars two and three of, uh, what smart landlords are doing right now.

So think that wraps it up today. Laci, thank you very much. 

Laci LeBlanc: We’ll see you next time. 

Chris McAllister: Okay, bye.