8 Tips for Being an Effective Landlord
Acting as a landlord seems easy in theory, but the reality is often much different. Success in operating a rental property takes careful effort, deep knowledge, and commitment to providing a positive experience for tenants. Despite the perception of real estate as a passive income activity, managing property often crosses over the line into an active job.
This isn’t to say, of course, that it’s impossible for a property investor to excel as a landlord. These eight tips can help you make the process of serving as a landlord as simple and successful as possible.
When you’re seeking tenants, particularly at the start of your tenure as a landlord, it’s compelling to take the first people who apply for residence, but this can be a dangerous strategy. Even friendly, enthusiastic applicants aren’t necessarily a good fit for your property, and plenty of potential renters will have skeletons in the closet that could impact the timeliness of rent payments and the level of care given to your property.
While it’s not necessary to take extreme measures, verification of income, credit checks and a high-level background check can provide a little extra peace of mind. Additional knowledge about your prospective tenants can help ensure that you’re only partnering with people who will pay you on time and respect the rules of your property. Further, working with those with adequate income and a clean history can reduce the risk of crimes occurring on your property. If you’re renting out single family homes or condominiums, it you will want to be as vigilant in finding the right tenants for your property.
Know the Laws
Tenancy laws can vary greatly from one city to the next, even within the same state or region. If you’re going to serve as a landlord, it is to your benefit to understand your rights – and the rights of your tenants – inside and out.
The laws governing landlord-tenant relations can affect many elements in how you run your business. Depending on the location, these kinds of laws can dictate when you’re allowed to enter a rental unit, your responsibilities toward maintenance and a standard of living, and even how much and when you can increase rent. If you head into property management without a solid understanding of your local requirements, you may find yourself in hot water.
Even if you know the laws currently, you may not always – laws and policies do change, so be sure you stay up to date on new legislation on both a state and local level.
Use a Lawyer
A lawyer may seem unnecessarily cautious – and for those with a solid understanding of the law, it may be – but when drafting documents like leasing contracts, a professional can be a benefit.
By renting property, you’re creating a legal transaction with a tenant, and your leasing contract needs to ensure that you and your tenants are protected from both illegal actions and liability. When an experienced lawyer drafts your contracts, you can be positive you’re not leaving any stone unturned.
If you plan to make changes to an existing leasing document, a cursory glance by a lawyer can make sure your adjustments are above board.
Set Hours for Contact
As a landlord, it’s your responsibility to be available for your tenants, whether to report maintenance issues or to discuss concerns with the property, the neighborhood, or anything else that may arise. However, finding an opportunity to do this can be frustrating for tenants, particularly if you do not live onsite or do not partner with a management company.
Instead of letting your residents’ irritation fester – something that could affect turnover of units – make yourself available. Provide carefully set hours when you will be available to take calls.
Be aware that you need to be consistently on call for emergencies. Things like burst pipes can come up at all hours of the night, so you’ll need to be within reach around the clock for issues that can’t wait. If you cannot personally attend to emergencies, be sure you have a third-party resource who can.
Fix Issues Quickly
You may think that your tenants can live with a toilet that won’t stop running for a few days or that they’ll be fine for a while with a broken doorknob, but the residents of your property likely won’t feel the same way. To them, their issues matter deeply, so it’s vital that you take the same perspective.
When your tenants contact you with repair requests, don’t wait until it’s convenient. Instead, take action as soon as possible. If you perform repairs yourself, make time within 24 hours to provide assistance. This doesn’t mean showing up to see what the problem is and coming back a few days later to fix it; this means coming prepared with the most likely supplies for the reported issue. If you use a third-party repair team, contact them as soon as possible to schedule same-day service.
All emergency problems, like flooding from a burst pipe or a heater outage in the winter, should be attended to immediately, regardless of the time of day.
Put Things in Writing
A lot goes into dealing with tenants in a property management situation, and in some cases, that means negotiations, arguments, or unreasonable requests as well as fair, valid criticisms of your property.
When managing tenants or even third-party professionals working in or around your property, it’s easy to say things in the heat of the moment or to assume an issue is over after a discussion, but this isn’t always the case. As such, it’s very important to make sure all major conversations are documented in writing. This can include rent negotiations, contract updates, unreasonable tenant requests, service agreements with repair people, or anything else that could potentially become contentious. This is both for your protection and to keep you organized and honest – with written records, you’ll always have proof of the outcome of situations. It is important to get everything in writing to prevent disputes from arising in the future.
Make Payment and Service Requests Simple
Are you considering asking tenants to pay in paper checks each month? Do standard maintenance requests need to be called in to your personal phone?
If you’re still requiring these slower techniques for property management, it’s going to hurt your competitive edge and tenant satisfaction rates. Instead, make it as easy as possible for tenants to submit work orders and make rent payments. In most cases, automated or manual ACH payments are preferred, or even direct online transfers, but make other options available as well for those who cannot make direct withdrawals from bank accounts.
An automated portal for work orders is often considered best, providing a cohesive way for tenants to get in touch with you.
Refresh Property Between Tenants
When a property empties property, and it’s time to move on to the next tenant, it’s highly tempting to move as quickly as possible. After all, every day without a tenant is a day without rental income. However, try to resist this urge in favor of a refresh.
The vacancy between tenants is the perfect time to inspect your property or units for things like mold, potential plumbing issues, missing tiles, broken cabinets, insect infestations, or anything else that may go wrong during the course of a tenant’s residency. You can also look for warning signs of problems that may develop in the future and address them before festering challenges turn into bigger, more costly issues.
When preparing for a new tenant, also consider things like kitchen and bathroom upgrades, carpet replacements, and fresh paint. When your property looks its best, you’re more likely to find a new tenant quickly – and keep them.
Make Renting a Success
Holding rental property can be a wonderful investment for real estate investors but acting as a successful landlord isn’t a set-it-and-forget-it kind of task. To best provide for your tenants, you need to be consistently available, prepared to act, and able to ensure a comfortable, legal living situation. While doing this will require effort, these eight tips can make sure you’re positioned as best as possible for the road to come.
Scott Clift is a licensed real estate broker with Westpark Loans. He has been in the real estate industry since 1994. His team of seasoned professionals specialize in providing real estate loans for investors and other self-employed individuals. When you are ready to invest in real estate, call Westpark Loans to secure your financing at (844) 574-LOAN or by visiting westparkloans.com.