Six Steps To Becoming a Successful Landlord

6 Steps to becoming a successful landlord - Dealing with renters can be difficult. These 6 landlord survival tips will make your job easierSix Steps To Becoming a Successful Landlord:

Today was not my favorite Saturday. My husband and I spent the day cleaning our rental property.

Our last renters moved out a few weeks ago and we decided to gut the interior and sell the home. We are painting, putting in new cabinets, tile, carpet, granite, light fixtures, and baseboards.

It is a major project.

If you are contemplating a home remodel check out my post on How to Manage a Home Remodeling Project.

We’ve discovered that owning rental property just isn’t for us.

Yes, I know it is an awesome investment. I’ve read extensively about the subject and understand the financial benefits. I purchased the property with the intent of living there for a few years and then turning it into a rental home.

It is literally the perfect rental property.  It is a 3 bedroom/3 bathroom townhouse in a great area of town.

It doesn’t matter though because I’m a lousy landlord.

I hate screening tenants, I hate dealing with tenants, I hate dealing with home repairs and I hate cleaning up after tenants. I literally hate the whole process.

For me, rental properties are a lose-lose situation.

I believe it takes a unique person to be a landlord. And more importantly, it takes a really unique person to be a successful landlord.

So in no particular order, here are six steps to becoming a successful landlord, all based on mistakes we’ve made:

1.  Do a full background check on prospective tenants.

And when I say a full check, I really mean a full check.

You should run a credit report, check employment history, contact past landlords and conduct an Internet search

You may still get a dud, but at least you will be able to screen most of them out.

Typically people can fake a few parts of their background, but if you are diligent and take the time to personally follow-up on their background you are more liable to catch the lies

If you are lucky your tenants will leave you a beauty like this. I will admit to being surprised they left their stripper pole behind.

If you are lucky landlord your tenants will leave you a beauty like this. I will admit to being surprised they left their stripper pole behind.

When you speak with employers and past landlords ask difficult questions, don’t settle for surface answers. If possible meet them in person.

Prior to renting to some college students Aaron visited their work and meet personally with their boss. Ironically enough, besides the stripper pole they left in the house, they were great tenants.

2.  Have a professionally written contract, that is tailored to regulations in your state.

Don’t pull a free one off the Internet, make sure it is a contract that is designed for your property and needs.

If you are including a washer and dryer make sure it is clearly written into the contract that the appliances are yours and came with the property.

Write specific verbiage detailing who is responsible for household repairs based on state laws. If you provide extras like remotes for the garage and ceiling fans, state a replacement cost.

Don’t assume that the obvious is obvious to a tenant.

Everything should be written down and each page needs to be signed or initialed. Make sure they actually read the contract and understand what they are signing.

3.  GET A SECURITY DEPOSIT

I don’t care if it is your best friend renting your house, get a security deposit.

The security deposit should be large enough to pay for more than just basic wear and tear on your home. It doesn’t matter how great the renters are accidents happen.

Red Wine doesn’t come out of carpet, garage doors get rammed into and occasionally people forgot to turn off the water in the bathtub. This is just a short list of stuff we’ve had to deal with.

The random accidents that happen with renters will boggle your mind.

Your contact should clearly state what the security deposit will be used for and how quickly it will be returned. If anyone balks at the security deposit you don’t want them as a tenant.

4.  When Tenants are late (not if), immediately charge a late fee and send an eviction notice.

You aren’t running a charitable organization and you can’t afford to “be nice”.  Know your state laws and take the steps to follow them.

This is the real reason I’m not cut out to be a landlord.

I really struggle with sob stories. I can’t stand the thought of kicking someone out of his or her home (even if it is my house) and am way to understanding and forgiving to be a good landlord.

Don’t fall into the “nice” trap. You are running a business and need to treat each situation as a business arrangement, not a friendship.

5.  You must respond to repair requests in a timely manner.

First it is the ethical thing to do.

More importantly, I’ve discovered that when I respond to issues quickly and efficiently my tenants are more likely to tell me about potential problems. They know I care about the property and want the home kept in good shape.

There is nothing worse than entering your home to find a minor water leak that has caused extensive damage because your tenant “forgot” to tell you about the leak.

Depending on your situation, this is one of the rare times when you may want to consider a home warranty.  I don’t use one on my personal home, but having one on my rental property was invaluable.

6.  Check in frequently.

Take the time to know your tenants and let them know you are actively involved in checking up on the home. Obviously you can’t do illegal searches, but don’t be afraid to swing by and pick up the rent. Don’t be a stalker, but let them know you are paying attention to the home and its condition.

Don’t be a stalker, but let them know you are paying attention to the home and its condition.

It is your right as a landlord to see the interior or your home on a prearranged schedule.  Again check your state laws for specifics, but let your tenants know you will be visiting the home.

What I’ve Learned from Being a Landlord

I’ve broken every single one of the rules above.

Somehow I managed to get lucky and for the most part had pretty reasonable tenants. However, by following these very simple, landlord rules I would have saved myself some serious money, time and frustration.

Don’t skip any of these steps and if there are any steps I’m missing let me know.

Being a landlord isn’t easy.

I think for many people it is worth the hassle. Maybe in a few years when our schedules are a bit less crazy, we’ll become landlords again, but for now, I’m counting down the days until the house is gone.

For additional information check out this Infographic from Robbie Grant with Jacob Grant Property Management.

How-to-be-a-successful-landlord_2015

 

Save

Save

Save

Save

Receive Our Newsletter

Subscribe To Get Bi-Monthly Content On Personal Finance, Parenting and Successful Living

Powered by ConvertKit