Tips on being the best landlord.
Better landlords attract better tenants. Why? If you consider your rental properties as a business, then your tenants are your customers. You’re providing a service that they’re paying for. In that case, wouldn’t you want to keep your best customers for as long as possible and attract new customers? Good landlords can keep long-term, qualified tenants.
On average, a landlord spends between 20 and 40 hours to fill each vacancy. That includes performing the advertising, showing the apartment, reviewing applications and credit reports and going through the leasing process (leases, move-ins, key exchanges, etc.). Not to mention that you’d elect to only keep a tenant if they’re a good tenant, which means less time with maintenance issues or following up on late rent. Over a year, a good tenant can save you hundreds of hours.
To get and keep a good tenant, you have to be an awesome landlord. Awesome landlords view their tenants as customers, always follow the law, and are willing to go the extra mile. So what do you need to do to become the best landlord you can be? These 15 simple tips are an excellent place to get started.
Being a landlord can be challenging, especially when you’re starting. From finding and screening tenants, creating and following a rental agreement, and collecting rent online, we will help guide you through all the essential landlord tasks.
Rental properties are often touted as a source of passive income. This gives people the impression that they can just find a property, rent it out, then sit back and expect things to go smoothly. This is not entirely the case though. Sure, it’s a passive investment in the sense that you will not have to clock in for eight-hour work five days a week. But getting into a rental business also takes work. You will have to stay on top of things. Note that the operative word here is “business.” You must treat your rental property as a business that involves legalities, taxes, and operational maintenance and expenses. Cultivate the right mindset first before jumping in, so you can spare yourself any possible complication.
The qualities of a great landlord are responsible for bringing out a rental property’s true potential. If for nothing else, it’s not merely a great real estate asset that nets investors the cash flow they desire, but also how the property is managed. Today’s best rental properties are, therefore, the result of not one, but preferably two fundamental indicators: a desirable property and someone that exhibits the qualities of a good landlord. After all, what good is a great rental property if the landlord is incompetent? It is paramount for investors to learn how to be a landlord if they hope to realize their asset’s true potential.
Why Being A Good Landlord Matters
Today’s rental market is ripe with opportunity, and the best buy-and-hold investors are reaping incredible rewards. It is worth noting, however, that the most prolific rental property investors aren’t merely those with the best physical real estate assets. While a great property in a great location is paramount to the success of a rental property, there’s one more piece to the puzzle that can’t be ignored: being a good landlord. Regardless of how excellent property is, it’s never going to realize its full potential without someone who exhibits the qualities of a great landlord. At the very least, a good landlord will take great property and make it even better. Therein lies the true potential of a rental property: when a great landlord runs a suitable property, the potential is limitless in today’s market.
Often, as a landlord, it’s easy to start viewing tenants as dollar signs, instead of building a lasting landlord/tenant relationship. But creating a good connection with your tenants and marketing yourself as a great landlord has numerous benefits. It will make working with your tenant on fixing repairs and showing the property to prospective new tenants at the end of a lease go smoother, and your tenants are more likely to renew – possibly even with a rent increase.
Qualities Of A Great Landlord
The qualities of a great landlord are nothing if not invaluable. After all, it’s the greatest landlords that know how to bring out the best in a property. However, many great qualities are subjective at best. What one landlord deems invaluable to their management skills, another may find useless. Likewise, there are many qualities landlords have that may increase their chances of realizing success, but there are at least five qualities that appear in more landlords than any other.
Offer a Warm Welcome
Help the Tenant Get Adjusted to the Area
It’s quite likely that the tenant is new in town. Giving them an insider’s look at the city will help them adjust quickly. Give them a printout that gives directions to local grocery stores, pharmacies, and other facilities to smooth their transition. You can pull a list directly from any map service online. Once you’ve done this once for your property, you can use it again each year without recreating it.
Write Them a Welcome Letter
Leaving your tenant a brief note welcoming them to the unit, as well as reiterating how happy you are to have them, will set the right tone for a positive lessor/lessee relationship. Be sure to write down your contact information again, just in case. Tenants will appreciate the gesture. Provide any special instructions for the apartment (when trash pickup/recycling is, contact information for cable and utility services, etc.).
Help Them Change Address
Including either address labels for their unit or change-of-address packets from the post office with your welcome letter will show the tenants that you think of the little things. They’ll love your foresight and will respect the thought that you put into it. They’ll also think of you as responsible and detail-oriented, two excellent qualities to find in a landlord. If you provide change-of-address instructions when they move out as well, that will help prevent unwanted mail still being delivered that you won’t have to forward or throw away.
Your unit has to be in top shape.
To get the most out of your rental property, make sure it commands the best price. One way you can do this is by giving your unit a makeover. This is especially essential if you are renting out a space that has already been lived in before. Check for paint that is chipping off, faucets and showers that are not working well, toilets that do not flush, wiring that does not work, bulbs that need to be replaced, and other such crucial details. You can also add furnishings that will make your unit look more put together. If you are targeting an upscale market, then make sure you take the extra mile to make your place look posh. The little details can make all the difference. And the extra efforts you take at the moment can bring you enormous returns for many months, even years, to come.
Know the Laws
Each state has a landlord and tenant act that covers rent, security deposits, landlord and tenant obligations, tenant’s rights, and evictions. Get to know these laws well. Violating a tenant’s rights will, at the very least, lead to an unhappy tenant, and at worst, land you in civil court.
Whenever there is a problem with the tenants, don’t just take matters into your own hands. Always, always, always follow the guidelines outlined in your lease since that’s what everyone signed. If there are issues that come up that weren’t addressed in the lease, you can always refer back to your city’s local ordinances or check on local landlord forums for tips and best practices. This way, should they have any objections, you can make it clear that you are within your rights and are also doing what is consistent amongst other do-it-yourself landlords.
Stock the Bathrooms
When the tenant is first moving in, the last thing on their mind is picking up some toilet paper. If you stock each bathroom in the unit with a roll of toilet paper and a soap dispenser, the tenants will be grateful that you helped them out in a pinch. Also, consider leaving a roll of paper towels and an all-purpose cleaner. This will encourage them to keep the place clean and let them know you also have cleanliness on your mind. However, don’t replace a proper cleaning crew with just a roll of paper towels.
If you commit to running the property yourself, you need to be available when needed. There is nothing that gets tenants angrier than not being able to reach their landlord. Regardless of how great your tenants may be, there will always be issues with the property from time to time. Most of these are small in nature, but that doesn’t mean they should be ignored. If the washing machine breaks, you need to get it fixed as quickly as possible. At a minimum, you need to return calls, texts or emails within 36 hours. Even if you are not able to fix the problem right away, you still need to be able to communicate with your tenants. What may seem like a small issue to you can be of great importance to them. Every time you ignore a tenant, you increase the chance that they will soar on you and the property. This can lead to them treating the property abusively and neglecting to tell you of circumstances that might lead to future problems.
While you do not want your tenant harassing you at home or calling you at all hours of the day, you do not want to cut yourself off from your tenant completely. Tenants feel more at ease when they know how to get in touch with their landlord. When a tenant moves in, give them your business number right away. Better yet, include an email address where the tenant can reach you. This will cut down on the number of after-hours calls you get and help you keep a written record of communication between you and your tenant.
Ultimately, if your tenants need to talk to you, then you need to be there. That means offering multiple phone numbers (if you have them) and an email address at the very least. And although they shouldn’t abuse the privilege, tenants should be able to contact you at night should there ever be an emergency. Tenants should always be provided with multiple means by which to contact you, just in case. Besides, if the toilet was overflowing in your unit, you’d probably want to know about the issue before any major damage was done.
Firm But Fair
As a landlord, you need to strike a balance between firm and fair. There are times when you may need to loosen up from a hard-line stance you have taken. In doing this, however, you cannot compromise your core values. If you don’t allow smoking or pets in the property, and they break the rules, there must be consequences for their transgressions. The minute you allow your tenants to break the rules, you can bet they are going to do it again. Their defence will be that since you allowed it once they thought the policy might have changed. While you may not think that breaking a rule is a big deal, it can have an impact down the road. Smoking and some pets can leave a stench in the property that will reduce the interest as well. Good landlords take time to think about what they want on the lease and what the penalties will be. Once something is on the lease, they will enforce it.
Ready To Act
Having the ability to fix small repairs in the property is a plus. For every landlord that can fix a leaking faucet, there are two that cannot. There are a handful of tasks that need to be updated with a rental property from time to time. Everything from the maintenance of the furnace to removing snow from the driveway needs to be done from time to time. It is often too late to start making calls after there is a problem. Good landlords are always building their contact list and have two or three people they can call at any time. You never want to scramble around looking for people when you need them. Not only will this drive you crazy, but it will also end up costing you more as well.
When a tenant calls with repairs, set up a time to come and inspect the damage if the repair doesn’t fall into the emergency category, set up a time that works best for the tenant, tenants will respect you more if you let them know ahead of time when you plan to stop in, and many states require this notice legally. Once you inspect the damage, schedule the repair immediately.
State laws handle property management maintenance differently. Some states will allow a tenant to deduct the cost of repairs from his rent if you do not make them in a timely manner. Even if your state doesn’t set a cap on repairs, the faster you make them, the better chance you have at retaining the tenant.
Listen to the Tenant’s Concerns
Every property management company deals with the odd nosy neighbour, overly concerned tenant, or cranky complainer, but most tenants won’t contact the landlord until they feel they have to. When you get a call from a tenant, listen to his concerns and do the best you can to make him feel like you addressed them. Granted, you cannot do anything about the neighbour’s lawn gnome collection if that neighbour isn’t your tenant, but you can mediate a dispute between two of your own tenants. If you can do something about the problem, tell the tenant you will address it and then do so.
Set The Right Rent Price
To set the right rent price, we recommend researching your market to learn what the fair market rent price is in your area. Pricing your rental at the rent price that makes sense in your location can mean the difference between vacancies and attracting good tenants so you can rent your property quickly. You can also use online applications such as Rentometer to help guide your rental rates.
As you set your rent price, you should keep in mind how it affects your financials. After all, rent payments are your main source of income on your rental property. To compare your rental income to your rental expenses, you should list your fixed and estimated expenses. Fixed expenses are your mortgage payment, property taxes, insurance fee, and POAA fees. Your variable expenses are utilities, repairs, and property improvements. By comparing income to expenses, it’s easier to see how to rent price affects your monthly revenue.
There’s no point in setting the right rent price if you have tenants who don’t pay on time, which is why the next tip is critical.
You may have to reach out to professionals.
Turning your condo into a rental property is not a simple task. It requires hard work and a lot of complexities you may not understand, such as tax laws, local property laws, and binding clauses in your contract with the developer. If you’d rather not deal with these, you would be better off enlisting the help of professionals instead.
Renting out your condo offers very promising rewards. Take the necessary preparations, and you’ll be reaping the benefits in no time.
Hiring a property manager can be a worthwhile investment if you’re looking to save on the time and hassle involved in owning a rental property, such as marketing your property, collecting rent payments, and dealing with tenant issues. A good property manager can also help manage multiple rental properties if you find yourself overwhelmed with landlord responsibilities.
Hiring a property manager is a great avenue to explore if you don’t live near your property or don’t want to commit to the hands-on role of managing the rental fully. By putting the responsibility of owning a rental home on a third party, you’ll have peace-of-mind that your property is being maintained in a professional and timely matter.
Keep in mind, you’re legally responsible for maintaining a habitable space for your residents, so if you don’t have the time or resources to dedicate to this important task, it may be time to consider hiring help. Whether your property’s roof requires some TLC or the walls need to be repainted, a property manager may have to take on a great deal of responsibility or hire the right person to do so.
If you can afford the expense, a property manager can help to streamline your landlord duties and facilitate a more hassle-free rental process. Similar to the procedure for finding the right tenant, make sure that you properly screen potential property managers. Don’t forget to ask for local references and interview multiple people before settling on any final candidates.
Keep Your Tenants Happy.
It’s a LOT cheaper to retain a tenant than to find a new one. Fix repairs promptly, keep the property in good shape, treat your tenants with respect, and you’ll see less turnover and more cash flow.
Nearly every investor will have their own opinion on the qualities of a great landlord, but some characteristics simply can’t be disputed. Landlords who exhibit the five qualities listed above stand to separate themselves from the competition, and perhaps even increase their cash flow. Again, it’s not merely a good property that will bring in the profits, but also a great manager. The person running the property is directly responsible for the tenants’ experience, and their approach can make or break even the best real estate asset’s performance.