Many real estate investors take on the role of landlord when they buy rental property. Whether managing a single-family rental or a multi-family unit, the task can be overwhelming. In fact, a simple Google search turns up thousands of landlord horror stories sure to deter even the most determined beginning investor.
It takes a special know-how to be a successful landlord, and with the tips below, you can be one yourself. The trick is to “train” your tenants to do things the way you want them done and be willing to take the tough road, if need be. Without further ado, here are six best tips for new landlords.
1. Make Collecting the Rent a Priority
Since your tenants’ rent money is the whole reason you do what you do, collecting it on time every month should be priority. If the rent is due on the first of every month, each tenant should be paying by the first of each month – no excuses.
You have to be willing to charge a late fee if they don’t pay rent on time, and you have to be willing to go further with eviction proceedings if they fail to pay altogether. Getting lazy or passive on either of these points lets your tenants know they can do what they want without consequences, and some tenants will definitely take advantage. Before ending up in bankruptcy because your tenants don’t pay on time, let them know upfront that timely rent payments are mandatory and expected.
2. Learn Everything You Can and Know the Law
Landlording requires more than just collecting the rent once a month. It requires you have an on-going education, as well as a complete understanding of fair housing laws. The more you know, the better equipped you are to handle situations that arise. Knowing and understanding fair housing laws ensures you never come out on the wrong side of a lawsuit brought on by an angry tenant. It’s in your best interest to read books, take courses and speak with seasoned landlords to gather as much education as possible to make your job easier.
3. Make Appropriate Renovations and Repairs
Many new landlords make the mistake of putting too much money into renovations with the hopes of charging higher rent. Unfortunately, if the rental is located in a low income area, charging higher rent isn’t usually an option. It’s important to make repairs and renovations that don’t cost more than you can recoup with typical rent payments from the tenants. Make sure the end justifies the mean.
4. Set Office Hours and Have a Google Voice Number
Your tenants will “need” your assistance 24 hours a day, seven days a week, if you let them. You’ll never get a moment’s peace. Setting strict office hours with a Google Voice number for emergencies is the best way to get a good night’s sleep and reduce stress on an very stressful job.
5. Hire Outside Help
As an investor and landlord, you probably look for every way possible to save money. This might include making repairs around the rental property yourself. If you’re a handy person, and you like making repairs, then go for it. However, if a repair is too difficult, or you simply don’t like making repairs, hire a professional to handle it. There’s a lot to be said for enjoying what you do, so leave it to someone else when the task isn’t your cup of tea.
6. Keep Organized
One of the keys to any successful business is organization. This holds especially true for landlording. Keep all your forms neat and handy in a file cabinet, have all procedures and policies clearly written out and have all your maintenance contacts organized for quick retrieval. Be up-to-date with your accounting, and keep your desk and office clean. While these things sound trivial, they are actually the exact organizational tools that make landlording an enjoyable and successful venture.