Tips for being a good landlord
At times, you won't have control over whether you have a good tenant or bad tenant in your property, but what you do have control over is whether or not you're being a good landlord. The key difference is the amount of preparation you put into addressing the array of issues that can arise. Below are some handy tips to help you stand out as the best landlord in your area.
Establish a Reserve Fund
The no. 1 reason why landlords fail is because they don't have the funds to deal with everyday problems. Dishwashers break, windows crack and roofs leak — oftentimes at no fault of the tenant. Instead of pocketing all of your rental income, most seasoned landlords would recommend that you put a percentage of your rent checks into a reserve or “rainy day” fund to help cover unexpected, and often expensive, issues. Inexperienced landlords will be tempted to fix issues with a mere band-aid to save money. However, this can lead to even worse damage to your property in the long run. Do the right thing and establish a reserve fund so that you can take care of these issues in totality and keep your tenants satisfied. Read this guide on rental property cash flow basics to help you set up your strategy.
Have Multiple Ways to Reach Tenants
You never expect your tenants to be a problem. In most cases they aren’t, but there are some instances in which you need to reach them immediately. It's important that when they sign the lease, you get as much information as possible about them. Having just a lone email or cellphone number is not enough. They can easily change or ignore them if they decide to walk away from your property. In addition to a phone number, get an email address, emergency contact number, work information and even a Social Security number. The more information you obtain before a tenant moves, the less likely they will run out on you unexpectedly. If they do, you have numerous ways to reach them. It’s also smart to have multiple ways to get ahold of your tenants in the event of an emergency.
Be Quick to Resolve Problems
Do you know who to call if the toilet is clogged? How about if you need to change a lock? Many issues associated with being a landlord are minor in nature, but that doesn’t mean they aren’t important. If you make your tenants wait a day or two, you run the risk of angering tenants. It also can end up costing you money. Instead of using someone you have an established relationship with, you use someone who is available. This will usually be at a higher price with no guarantee of the quality. Before you need to have work done, you should reach out to local tradespeople and develop relationships. You can always use a painter, handyman, contractor, snow removal company and landscaper. Establishing these relationships in advance will ensure that you have reliable services at a moment’s notice.
Lease & Insurance
You never know when the unexpected will happen during a lease. Between weather issues, tenant problems and property damage, there are potential concerns always right around the corner. The two items that offer you the most protection are your lease and insurance. New landlords get in trouble by using a basic lease template they can easily find online. You don’t necessarily need a long complex lease, but it has to provide you the protection you need. It's important to spend the time – and in some cases, the money – to get the right lease for you and your property. The same is the case with your insurance. You should review your policy every year and make sure you're comfortable with it. You can save a couple of dollars by making changes in the policy, but it may come back to haunt you. All it takes is one slip and fall or one incident on your property to wipe away years of hard work.
Don’t Bend Your Policies
The best landlords are ones that stick firmly to their rules and policies without breaking them. Before you know it, you could have no structure at all and your tenants will walk all over you. If you don’t want smoking in the property, you need to have a strict no smoking rule. The same is the case with pets, parking and anything that matters to you. It's easy to let the threat of a vacancy influence your decision making. You have to fight the urge to do this. You put rules in place for a reason, and by breaking them, you start to lose control.
Perform Seasonal Maintenance
In addition to responding to requests when you are needed, you should also take a proactive step and perform seasonal maintenance every year. If you treat your rental house the same way you would treat your own, it will run much more efficiently and will have happier tenants. Instead of calling you in the middle of summer to let you know the central air stopped working, they will be happy, cool and more likely to not want to leave when the lease is up.
Even a Good Landlord can have Bad Tenants
So far, we’ve discussed how you can brush up your skills and preparation to help you be the best landlord possible. Unfortunately, however, even the best of landlords are bound to have bad tenants from time to time. Although there is no absolute science in picking out tenants that turn out to be great, there are some stopgaps you can put into place to improve your chances of finding good tenants. First, never skimp on the process of thoroughly vetting your tenants. For example, never skip the steps of running tenant background checks, including calling previous landlords. Second, prepare yourself for the worst-case scenario of running an eviction process so that you know exactly what needs to be done if the need arises.