If you have decided to become a landlord, congratulations! However, before you jump in with both feet, you should be aware of some important facts and tips to help you be successful and avoid the pitfalls that plague many landlords.
1. Create a Contact List
Whether you manage two units, twenty, or two hundred, one thing remains the same: you can’t do it all. Even if you consider yourself a jack of all trades and only have a few tenants, you’ll need help at some point. Start accumulating names of people in various industries whom you can call on when you have a problem. If you go to the same people, you will become a preferred client. The next time your tenant calls for a heating problem at 2 a.m., your HVAC guy will be there first thing in the morning.
2. Create a Complete Policy
Set up a list of rules before you start taking in tenants. Stick to the list no matter how much someone begs you to bend the rules. By having the policy in place ahead of time, you won’t be tempted to give in because you feel sorry for someone. This includes your procedures for processing applications and the rules you have in place for the residents.
3. Keep Up with Your Property and the Competition
If you have a well-kept property, it will be easier to find and keep the best tenants. Work to maintain your properties in between tenants and while they are occupied. Find out what your biggest competitors offer to win tenants, and make sure you offer something similar or even better. Think of any expenses you obtain as an investment. If you don’t put money into your property, you won’t get money out of it with quality residents.
4. Figure Out When and How to Outsource
If you want your business to be successful – whether you have five units or fifty, you need to focus on the important things and outsource other tasks. For example, you may hire a company to handle rent payments or a maintenance person to make basic repairs and maintain the property. If you aren’t a people person, you may even want to hire someone to do the leasing for you and show the property. Look at your strengths and hire people to do everything else.
5. Be Strict on Payments
Don’t fall into the trap of being the “nice guy” and letting your tenants get behind on their rent payments. You have to treat this as a business, even if it’s a side job, and set rules about payments. Tenants can tell sad stories, but you can’t give in to every one you hear. Just remember, you aren’t doing them any favors, and you sure aren’t doing any for yourself either.
6. Think Like a Manager
If you treat your rental properties like a business, you must act like a manager. All decisions should be solid business decisions, and you must implement and enforce the rules. This is the only way you can be successful. Don’t act like it’s a side job, a second income and definitely not a hobby. Manage your tenants, your employees, your vendors, your time and your money. If you have this mindset in all situations, you will find that being a landlord is a profitable business.
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