Whether you manage your properties alone or have enlisted a capable property manager, being a landlord requires significant time and effort to ensure your properties are providing a return on investment, and doing their part to help build your financial security.
When executed correctly, being a landlord enables you to meet your financial goals faster, and gives you pride in your ability to provide good quality housing for your tenants. When things go wrong, being a landlord leaves you vulnerable to risk, and can land you in drawn-out personal conflicts or even legal battles, if you have gaps in your personal protection plan.
A reputable property manager can provide a personalized assessment, as well as more information about how to best manage your assets as a landlord. However, the following tips and tricks are a useful starting point for new landlords, and a helpful refresher for experienced landlords looking to maximize the potential of their investments.
1. Be meticulous about tenant selection
Placing a tenant into your property might seem like a straightforward proposition, but a little extra time spent on finding the perfect candidates can save you a significant amount of time and money later on.
It is undeniably cheaper to keep a good-quality tenant long-term than it is to spend time and money on readvertising your property and cleaning up after, or even evicting low-quality renters, not to mention the risk of having a property without income if a new occupant is not available immediately after a previous tenant has vacated the property. With this in mind, selecting tenants should be a significant priority for every successful landlord. If due to study, you do not have enough time to choose a tenant and your academic performance drops, then you can use the paper writer service to save time and improve your grades
Ensure your advertising is consistent with and targeted toward the kind of tenants you want to find. If you’re looking for high-end executives, advertisements on paid sites, such as Zillow or Realtor.com, with high-quality photographs of your property, are more likely to attract the quality of tenants you’re seeking. If you’re looking for students or young families, less formal sites, like Craigslist or even Facebook Marketplace, may be a more cost-effective option.
Where possible, be present for property inspections so you can meet the tenants face to face, or ask your property manager for a run-down of their impressions. Ensure that the rules are explained clearly, and be friendly at all times. You want tenants to look after your property the way you would, and being likeable will go a long way in achieving that!
A word of warning—if you’re in a position to provide quality housing at a reasonable price, it can be tempting to help out family members. While this is entirely up to you, many landlords and property managers advise against renting to family.
Family members may feel entitled to ignore certain clauses and requests, or you may feel uncomfortable following up late rent payments or damages when you have to see the occupant at next week's family barbeque. If you do rent to family, have a very honest conversation about the lease and expectations before making anything official.
2. Get the lease right
Getting your lease right is critical in protecting yourself, and making sure each party has a clear understanding of their role in the agreement. For complete peace of mind, have a professional draw up your lease in consultation with yourself; whether that professional be a lawyer or a property manager. A trusted professional will know the ins and outs of what is allowable and proper to ensure you’re not caught out during any future conflicts with your residents.
Pay particular attention to the clauses that outline your rights and responsibilities. Having a full understanding of how late payments are managed, how inspections work, or eviction timelines can empower you to act on less desirable occupants if required, while remaining confident that the law is on your side.
It’s easy to fall into the trap of wanting your property to be lived in the way you would treat it. It would be wonderful if every renter used area rugs and never scuffed a wall, but your lease holders are human, and your property may not stay pristine after years of use. It can be tempting to add detailed clauses to your lease to prevent any deterioration of the living spaces, but you should research the legalities for your local area to see what’s reasonable/
For example, it may not be legal in your jurisdiction to deny pet applications without just cause, but you may be able to charge a ‘pet fee’ to cover any potential damage caused by the animal.
3. Be smart and responsive about property repairs
Landlords are responsible for ensuring their properties are safe to live in, and that it is up to code (according to your local regulations). Being responsive to any concerns raised by the tenants will confirm for your tenants that you are willing to uphold your end of the lease, which makes them less likely to cause avoidable problems for you down the line.
While it may be tempting to hire the first repair service who returns your call, make sure you call around and get multiple quotes when things need fixing. Finding the best value service and building a relationship with the owner will save you a treasure trove over the years. Consider having a repair fund for emergencies so you’re never caught out without the funds to uphold your legal duties as a landlord. And, if you’re aware of bigger maintenance issues, weigh the cost of frequent ‘patch’ fixes vs spending more upfront for a full repair, which may save you money in the long run.
4. Find the right property manager
If you choose to hire a property manager to look after your investments, do your due diligence and shop around. If choosing tenants is important, choosing the person who’ll be interacting with them is doubly so! A good property manager will provide you with regular reporting and clear communication, and will be able to take you through established protocol for any tenant-related situations that may arise.
Ask prospective property managers for references, request detail around their processes and communication practices, and get a live demonstration of any online platforms they use. This will give you a good idea of how they do business, and what kind of asset they will be to you.
5. Protect your own wellbeing
Resolving issues stemming from tenant management can be intensely stressful, particularly if multiple properties have issues at the same time. It’s critical that you set boundaries and give yourself the space to enjoy your life outside of property management. After all, isn’t more freedom the reason you became a landlord?
Consider protecting yourself with landlord insurance to take some of the immediate stress away/ You could be covered for loss of income in the event a property is without a tenant, malicious damage caused by problem lease holders, or even your own personal property if you have some stored in your buildings.
Some states allow a landlord to require renters. If this is allowable in your local region, it’s a great option to add an extra layer of protection to your property, without upfront costs to yourself.
All the insurance in the world won't give you quality time back with your family. Set business hours for yourself and make sure anyone who may need to contact you knows they can do so within those hours only (barring emergencies). The world won't collapse if you’re not notified about that dripping tap until morning. Setting boundaries with your occupants or property manager will create the work-life balance you’ve been striving for!
6. Get your filing right
You’re already aware of the importance of protecting yourself with iron-clad lease agreements and various insurance, but all the documentation in the world won't help you if you can’t actually locate it!
A common error made by inexperienced landlords is failing to create and maintain a no-fuss, intuitive filing system that allows you to find what you need, fast. Electronic filing systems are, undoubtedly, the best option as physical filing systems are prone to being lost, or fire or water damage. However, a mix of electronic and physical is advisable as the possibility of cloud-based storage systems failing is also something to be wary of.
Keep your documents clearly labelled, in appropriate folders. You may have one folder for each property, for each tenant, or even for each property manager. Whatever you choose, make sure it works for you.
Takeaway
Being a landlord can set you up for lifelong financial security and day-to-day freedom from the traditional 9 to 5. Keeping in mind and utilizing these tips are the first steps in creating a solid foundation on which to build your property empire. Get the basics right, surround yourself with a quality team of management and maintenance professionals, understand the law, as well as be completely aware of your and your tenants’ rights, and you’ll find yourself enjoying a comfortable life that is free from the stress that comes with poorly managed properties.
