Are you interested in taking on one or multiple investment properties but don’t know how to start? Or are you already managing properties but seem to be making mistakes year in and year out? If you’re looking to become a landlord or you already are one, this article will help you avoid the mistakes that plague landlords and property managers.
Here are six tips and tricks that will keep a roof over your head, and your tenants’
1.) Rent is Priority #1
Obviously, this sounds like a no brainer, but unfortunately, it is not. There is a reason why there’s a stereotype about rent-hungry landlords who won’t get off their tenant’s backs. It is because a landlord needs that money to keep their head above water.
Be persistent with your tenants about getting rent on time and in full. If you have tenants that are paying late, make sure to acquire those late fees as well, and make no exceptions.
If a tenant is generally reliable and extremely communicative and cooperative with you but misses a payment, it is not the end of the world, and you certainly don’t need to begin evicting them for one payment. However, if you have tenants that are late on payments regularly or are dodging your calls or even your home visits, then it is time to begin the eviction process. Evictions can be lengthy and tiresome, so if you have a noncooperative tenant, you must be vigilant about getting them out of your property.
2.) Screen, Screen, and Screen Again
When you consider that 33% of renters move each year, it becomes apparent that screening possible renters is an unavoidable part of being a landlord. Behind rent collection, screening tenants with serious intent is arguably the most important element of being a successful landlord. If a landlord is vigilant about potential tenant screening, they can avoid hassles like late payments, lease breakings, and property damage, to name a few.
When screening potential tenants, it is important to run a criminal background check if you have the means to do so. Above all else, the tenants’ credit score must be adequate, and accepting a tenant with below par credit is just a disaster waiting to happen.
As a general guide to credit scores, anything above 750 is excellent, anything between 650 and 750 is good, and anything below 650 is poor. If a tenant comes to you with a score below 600, that should act as an immediate red flag.
Renter references are a great thing to require from all potential tenants. Yearly damage to your property can be very costly; an estimated 14,000 people experience water damage in their homes each day. If you can avoid careless tenants who leave unexpected damages behind, then you should, by all means, do so.
3.) Be Weary When Allowing Pets
Deciding whether or not to allow your renters to have pets is a decision that will eventually be faced by all landlords. If you have a potential client that has a cat or dog and has provided you with adequate renter references that all say the animals were no issue, then it is relatively safe to continue with that tenant. However, if your potential tenant has no references and cannot provide documentation of their history being a responsible and cleanly pet owner; it would be ill-advised to take that person on as a tenant.
Remember, cat urine has a particular odor that does not go away easily.
4.)Educate Yourself on Fair Housing Laws and Local Renting Laws
To be a successful landlord, educating yourself is the best way to protect yourself and your tenants from potential legal issues. Far too many landlords don’t know many of the laws that could come back and bite them if violated. The last thing that you want is a tenant filing a lawsuit because of something you weren’t even aware of. 1 out of every 7 businesses has an alarm system and so should your building. So make sure you are up to date on security and fire alarms. They should be up to code in accordance to your local laws. A working smoke alarm will increase your chance of surviving a fire by 50% so it makes sense laws are strict on this.
It’s also important to consider that local laws are also placed on landlords and that these laws may vary from city to city or from state to state. A successful landlord must educate themselves on local laws as well.
5.) Take Advantage of Online Rent Collection
There are hundreds of reasons why collecting rent in person or via the mail no longer makes sense. Its more expensive, time-consuming, inconvenient, and more work than collecting rent online. When you decide to collect online, it can save you as a landlord the hassle of keeping track of late fees. Online payment can save tenants some headaches as well by allowing them to pay from the comfort of their home or even set up automatic payments.
6.) Stay Organized
Whether this is your second form of income or your primary job. If you are a landlord, you must stay organized. There is nothing more frustrating for a tenant that a disorganized landlord, thus being disorganized could even cost you potential income. Keeping proper track of your revenue and your expenses will save you time and hassle when it’s tax season.
At the End of the Day…
Being a landlord isn’t easy. But with this list, hopefully, you can go forth and be the best landlord you can be!