If you own a rental property, you are more than likely aware of the work it entails. Having a tenant pay down your mortgage and provide you with cash flow is very appealing, but it doesn’t come without plenty of effort on your end. Properties that appear to run on autopilot are often the byproduct of great preparation and diligence. Your property won’t run itself, and the type of landlord you are will go a long way in determining the types of tenants you attract. Instead of learning the hard way, there are a few things you can do to become a better landlord.
The most important task you have as a landlord is to find quality tenants. There is nothing you can do to ever guarantee a good tenant, but there are plenty of signs that can point out a bad one. The first, and most basic step, is to run an application and follow up with any references. There are many landlords who will give the keys to their property away without as much as a phone call or a verification of a paystub. You need to run an application, but you also need to follow up on the information provided. This means spending the time to find out who the best person to talk to at their job is, not just the person listed on the application. This could mean enduring a small expense and pulling their credit report to see if there are any past evictions or other stains on the credit. Anything that is pertinent to you could be included on the application, but if you don’t follow up, you have no idea of who your tenants really are.
No landlord ever expects to find themselves involved in a dispute with their tenants, but they happen more than you may think. If you have an issue with property damage or the move out condition of the property, it is often your word against theirs. Instead of wasting time and money on mediation, you can avoid all of this if you have a video recording of the property time and date stamped on the day they moved in. Every interaction you have throughout the lease should be documented, either by email or voicemail. The more avenues of proof you can provide to your tenant will serve to eliminate these petty disputes and bring resolution quickly. Everything from the lease to an email they may have been sent three months ago should be documented and easily retrieved. Hopefully you will never need to revert to this, but you never know what can happen over the course of a lease.
The internet has made the real estate business as easy as it has ever been. You should try to automate as much of the tenant application process as possible. Even if you aren’t tech savvy, setting up a new website can be done quickly and inexpensively. You can include your rental application, a video tour of your property and any questions a prospective tenant may have. This will save you hours going back and forth showing the property and dealing with applications. You can have a section of frequently asked questions and even a few testimonials from past tenants. Instead of going back and forth with prospective tenants, you can use your time much more effectively.
As a landlord, you need to know your strengths and weaknesses. If you are the handy type, you can save some money doing these tasks. If you have limited handyman experience, you need to know your limitations. In most cases, you would be far better served passing on these tasks to people that are much more qualified. Not only will they do job the right way the first time, but you will often save money. There are many projects that you can make much worse if you do them yourselves. It is also a good idea to establish a relationship with different people in different areas of the business, even if you don’t need them right now. You never know when you will have to call an electrician or contractor in a pinch. Saving money on your rental property is always nice, but you need to know where to pick and choose your battles.
If you don’t have the buffer of a property manager to handle the small tasks, you need to clearly define to your tenants as to what is covered by you and what should be handled by them. It sounds crazy, but some tenants will call their landlord to do small tasks such as change a light bulb or replace a shower curtain. If this is your tenants first time renting, they may not know what their responsibilities are. Before they move in, you should go over individual reaponsibilities. You never want to make your tenant afraid to call you with an issue, but you also don’t need to be called at all hours of the night with something that can wait until the morning.