Being a landlord is a lot of work. On maintenance and repairs alone, the average landlord spends 4 hours per month on every building they own.
That may not sound like a lot, but that is just repairs, and only for one building. Anyone in the real estate business can tell you there's a lot more to it than that, especially with older buildings.
If you're a first-time property manager, let's talk about some simple tips to be a good landlord and get the biggest return on your investment.
Tips For Property Managers: It's A Business, Not A Hobby
Running a commercial property is, in every sense of the word, a business. You are essentially buying a job when you purchase a rental property unless you outsource your property management.
However, if you're running the show, you need to treat it like it's your business. This means keeping expense reports, closing vacancy gaps as soon as possible, maintaining the property, and communicating with tenants whenever possible, like they were any other kind of customer at any other business.
This is also important to keep in mind when it comes to advertising. Filling those vacant units is essentially making a sale, and there's a lot of groundwork to it. Again, it's not a hobby.
Screen Your Tenants
This does not mean you should be engaging in discrimination, but you should absolutely be meticulous when choosing your tenants. Look at credit scores and rental history, and call their references to ask questions that you should have prepared.
Make sure they have a stable income, especially. This is the most important. They may make 3 times the rent, but if their job is seasonal, that won't help in a few months.
The biggest mistake a landlord can make is picking someone who can't pay the rent and/or trashes their unit. This can lead to eviction and massive repair bills, so take this seriously.
With just about all of the tips on this list, it will have a mutual benefit for you, your business, and your tenants. Tenant retention, and especially good tenant retention, will be your number one money-maker.
Respect Goes Both Ways
Just because you own the property doesn't make you morally superior to your tenants, so treat them with respect. They need a place to live and you have one to offer, and that is just the way business works. You have a product you are renting to them, and they are your customer.
Tenants want their concerns to be heard, and they typically want to have a decent relationship with their landlords. You don't have to like them, but be respectful of their wishes and courteous when possible.
If you're rude to your tenants all the time, they won't be rushing to renew their lease when the time comes, which can hurt your income.
Don't Be A "Yes Man"
While mutual respect is important, and you are responsible for the tenants' needs at the property, don't let them take advantage. Learning to say no to requests that are too much for your business is a good part of achieving success in the industry.
Don't Mess Up The Lease
The lease is the foundation of the tenant-landlord agreement, and there's no room for error. When writing a lease agreement, spend the extra few dollars in legal fees and speak to a lawyer. This is crucial to protecting yourself and your investment.
Make sure the rules about the security deposits, late fees, timely rent payments, and all the maintenance rules of the unit and common areas are explicit and unmistakable. This will likely save you a fortune, down the line.
This is also important when it comes to "right of entry", in the event that you need to get into the unit. Having this established is important as this causes legal headaches for property managers all the time.
Having a full understanding of how late payments are managed, how your inspections will work, and timelines for eviction will empower you to act on less desirable occupants if required while resting assured that the law is on your side.
Ask For Feedback
There's nothing wrong with knocking on the door or calling up your tenants to ask if there's anything you can do to help. Tenants will certainly appreciate the individual attention and responsiveness to their needs.
Oftentimes, there won't be anything off the tops of their heads, but it's still nice to ask. Just keep your phone line open to answer any calls and take feedback as it comes!
If a tenant calls you and tells you the sink is flooding the bathroom, it's time to drop what you're doing. If it's a broken doorknob then of course that can wait a couple of days. However, put yourself in the shoes of the tenant and understand how important it can be to them for a repair to be done on time.
It can also save you money. If something is wrong with the pipes or the heat, it can cause a lot more damage if you don't attend to it in a timely manner.
If this is all too much for you, it's okay to ask for help. Contact an experienced property management company to get you the best bang for your buck.
Good Landlords Go Far
Good property managers are worth their weight in gold, and as we mentioned, it really pays off to be one. If you're interested in being a landlord but haven't made the initial investment yet, find out what kind of rent prices you could be getting in Charlotte, North Carolina!