Successful landlords is one who doesn’t feel like pulling their hair out every time the phone rings. It’s someone who actually looks forward to the beginning of the month when the rent checks start coming in. It’s someone who runs a tight ship with systems that can handle the big waves that are bound to come. Success is possible as a landlord, if the right steps are taken.
1) Treat Your Business Like a Business
Many landlords do a terrible job at running their business and this is largely because they don’t see their business as a business. In other words, they treat their investing like a hobby. However, when you treat your landlording with the respect, systems, and organization that you would treat any other business venture, amazing things can happen.
2) Screen Out the Bad Apples
Perhaps the biggest mistake landlords make is letting in the wrong person. This can lead to late rent, trashed homes, and costly evictions. This ties well with number 1, because people treat their business like a hobby and refuse to follow even simple due diligence on the people who will be living in their properties. What would a bank say if you walked in, completely unqualified with no income and a 450 credit score, and asked for a large loan? A bank doesn’t run on emotion, and you shouldn’t either. So screen like your business depends on it… because it does.
3) Treat Your Tenants with Respect
Don’t allow personal feelings to get in the way of a business relationship. Tenants want to be treated fairly and be seen as an equals. Treat each tenant with dignity and respect and it will come back to you in success.
4) Don’t Be Too Nice
Your job as a landlord is to be fair, not to be nice. Being “nice” will give your tenants and others the invitation to walk all over you and take advantage at every turn. By allowing your tenant to break the rules, you open yourself up to years of struggle and compromise that will ultimately lead to huge financial losses. There is a difference between respectful and being nice. Choose wisely.
5) Get Help
With over 28 Million real estate investors in America, there are bound to be countless investors in your town who can help you out during tough times.
Whether it’s the phone number for a plumber, help dealing with a tough eviction, or just reassurance that you are doing the right (or wrong) thing, reach out to other landlords for help. Landlords love to “talk shop” so look for opportunities to open the conversation.
6) Be Knowledgeable
To make landlording an easier task, you need to be well equipped to handle the problems that you will face. The best way to do this is through education. Books, courses, and mentors are all great ways to improve your abilities. Listen to podcasts, talk with other investors, and teach others what you know.
7) Create a Policy & Stick to it
If you are running your rental business off the top of your head, making up the rules as you go, you are opening yourself up for a lot of hassle. Tenants will know if you are making rules up on the spot, so having a written policy (that your tenant has) will make life much easier. Rather than trying to explain why a certain action is not allowed, you simply can refer to the policy.
8) Quality Product = Quality Tenants
While this isn’t a hard and fast perfect rule, in general the quality of your tenant will depend largely on the quality of the home you are providing. By providing a better-than-average home you will set a standard for the kind of tenant you attract and keep.
9) Set Office Hours
Do you want to fix repairs at 10:00 at night? How about receiving phone calls at 6:00 am? As a landlord you get to set your own hours. You should publicly let all your tenants know that you are only available at certain times for examples between 10am- 4pm on weekdays.
10) Get a Google Voice Number
A neat tip you can also try relating to the previous tip is to sign up for a free “Google Voice” account – which supplies you with a phone number that is forwarded to your own cell phone. Give all your tenants this number and set up a business voicemail on that line. All business related calls go to that number but your phone (or multiple different phones) will ring and can be answered.
11) Know When to Outsource
Many repairs can be easily fixed. Many more cannot. If you are extremely handy with construction and tools you may be tempted to do all the repairs yourself. While this might be a good idea, it also may not. Just because you can do something doesn’t mean you should. In order to be a successful landlord, you need to balance cost savings with enjoyment.
12) Be Organized
Have all the forms you need organized neatly in your file cabinet, have your procedure written down for all common problems (vacancies, repairs, etc.) and keep your maintenance contacts organized neatly for easy retrieval. Keep current with your accounting. Have a clean office. These, and many other organization tools, may seem small and trivial but they are one of the most important ways you can keep your business a business that succeeds.
13) Always Charge a Late Fee
It may seem cruel – but you should always charge a late fee, and make it known ahead of time about this policy. Most tenants make a lot more money than just what rent is, but not enough money to live each month. As such, they must constantly prioritize what gets paid and what doesn’t. By being strict with late payments, you place “rent” higher on the priority scale than other obligations. Additionally, the extra income when rent is late is a nice compensation for the stress of not getting rent on time.