You’re ready to begin your journey as an investor and your goal is to own a property that can be rented out. Being a landlord isn’t always an easy task but there are plenty of tips that will help you become a good and successful landlord.
Remember you are running a business.
Being a landlord isn’t a hobby, it’s a business. You will need to have a system in place to help keep your business organized. A good landlord always needs to be ready for any problems that may arise and you can stay prepared with an organized plan of action. You aren’t just a landlord, you’re the boss. For example, if you’re out of town and the air conditioning breaks, do you have a planned course of action? Preparation, respect, communication, and organization are some of the key qualities you must have to be a successful landlord.
2. Find good tenants.
Finding a respectful tenant can be difficult but there are a few ways to discern who to let in and who to keep out. A good tenant should make 3x the monthly rent in stable income, have no recent evictions, no recent felonies, and good references from previous landlords.
According to The Huffington Post, “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. Be respectful but firm.
This is a business. It is important to be fair and respectful but you must also be strict. You have rules in place and if they aren’t obeyed, there are consequences. If rent must be due on the first of the month then there should be no exceptions to the rule. If you are lenient with your rules, you will invite your tenants to take advantage of you.
According to The Huffington Post,
“Humans have a tendency to keep taking more and more when given slack, something I often call the ‘if-you-give-a-mouse-a-cookie’ syndrome, based on the children’s book where a small annoying mouse continues to push the envelope, asking for more and more things after it’s been offered a cookie.”
If you have terms that you and the tenant have agreed upon, you are not obligated to make an exception. Create a policy and stick to it.
4. Document everything.
In order for you to reinforce rules, you will need to have everything in writing. If you only allow calls from your tenants at certain times of the day, make sure you put it in writing. The key is communication and documenting everything will help you communicate clearly to your tenants.
According to Landlordology, “When it comes to being a successful landlord there is no such thing as a verbal agreement, only a signed contract. In order to protect your interests and the interests of your tenants, get everything in writing.”