4 Keys to Being a Successful Landlord—Don’t be a jerk. Stop being too nice. Be a pro.
Becoming a landlord can certainly be a good investment, but if you’re considering it – or if you already have your first set of tenants – don’t make the mistake of thinking it’s an easy job. Treat it like a business and follow a few best practices, and you’ll be fine. Play it loose and unprofessional, and you could soon find yourself in the red, or worse.
All the tips and tricks in the world won’t work unless you start by understanding that preparation, knowledge and yes, even sacrifice are part of the deal. But the good news is that if you stick to a plan, you’ll be confidently shopping for your new home sooner than you think!
4 Keys to Being a Successful Landlord
Be Kind
Listen to your tenant’s concerns and give them a little leeway now and then. Building a good relationship with your tenants will encourage them to treat your property with respect. When they call you to talk about a problem, try to address as quickly and as thoroughly as possible. If it’s not your responsibility, explain why. Odds are, you’ll probably ward off bigger issues by addressing smaller concerns, even if they seem petty. And if the rent is late every now and then – within reason and not habitually – cut them some slack. If you’re compassionate, reasonable and responsive, tenants are likely to stay longer, accept rent increases and stay out of your hair.
Be Strict
Being compassionate doesn’t mean being pushover. If you’re too squishy about the rules, lax about collecting rent or lazy when vetting new tenants, you’re in for a world of hurt. What you never thought would happen – like a mattress fire or a dog chewing through sheetrock – will absolutely happen. Some property managers have leases that are hundreds of pages long to cover the list of absurdities they’ve encountered over the year.
Be Skeptical
To avoid ending up cynical and embittered by your foray in to property management, start with exercising a healthy dose of skepticism. Start by properly vetting your tenants. For instance, don’t accept a credit report they printed out on their own. For less than $50, you can get your own screening reports – including a criminal background check. And always get at least one – preferably two – landlord references. When you do find good tenants, make sure the lease you sign with them is customized to your property. There are plenty of standard leases out there, but they don’t have nearly enough detail Finally, find good a real estate attorney you trust before you need one – they can help you clarify tenant laws and help you write a good lease up front. It’s worth the investment.
Be Safe
Don’t underestimate your risk. Consider forming an LLC to hold your investment property. Otherwise, an accident could put your other assets in jeopardy. You’ll also need insurance policies for property damage and liability. In the same vein, be diligent about upkeep and repairs. This will help increase the value of a property over time and reduce the chances that your tenants end up in the hospital at your expense. It just makes good business sense to fix things as issues arise, or pretty soon you’ll end up with a blighted property that’s too costly to rehab and can’t fetch the rent you need.