You may find yourself asking the age-old question: How can I be a better landlord? Being a landlord comes with traversing what may feel like a million landmines, which is why Door&Key is here to share our top 9 tips to becoming a better landlord. If, by the end of this article, you feel being a landlord isn’t the life for you, don’t worry…we buy houses! Before we get into the tips, it’s important to establish why following these tips is essential to anyone with tenants. Not only does being a good landlord increase your chances of renewals, high ratings online, and getting new tenants via word-of-mouth, but it also humanizes you to the tenant. This can establish empathy, respect, as well as minimizing damage to the property. Essentially: more money, less headaches.
1. Use Systems and Repeatable Processes
Let’s face it: no one likes bookkeeping or having to do every part of a complex job. Fortunately, there are a lot of really good tools and software out there that can make your life a lot easier. These services take care of a wide variety of jobs like communicating with potentials and screening tenants, taking automatic payments, tracking expenses and service requests, generating profit and loss statements, etc. Stessa is a great place to start, even for those who manage a number of properties. Its user-friendly interface, detailed data tracking & reports, and the price tag (it’s FREE) have made it pretty popular. Some other notable software products include AppFolio, Buildium, and Cozy.
These systems are great to use because they save you a lot of valuable time when it comes to paperwork. There’s also a clear paper trail when it comes to renter disagreements, bank statements, and the like.
For more info on this, check out https://learn.roofstock.com/blog/landlord-software for more detail!
2. Outsource and Delegate When Possible
Your time is valuable and what you spend it on can really add up. When thinking about whether or not to outsource, I always find it helpful to think of it this way: How much would you pay yourself if you could conjure an hourly wage? Now, with that number in mind, could you afford to pay someone else that amount of money (or less, depending) in order to devote your time and effort elsewhere? For many landlords the answer to this question is YES!
For some tasks, such as taking tenants calls, collecting late payments, screening potential tenants or hiring a handyman to fix a broken sink, consider hiring a virtual assistant (VA) to help. It can even be just part time, if needed, and there are many VA services that are very affordable these days. Some of these services include Firvver.com, StartVirtual, and Columbia Source.
3. Have An Attorney Look At Your Contracts
If there’s one thing a business-savvy individual will tell you, it’s to ALWAYS consult an attorney when there’s a contract involved (especially in real estate). With that said, make sure to have all of your contracts created, or at least looked over, by a qualified and licensed attorney in your state. Nothing wastes more money and time, while creating massive stress and headaches in the process, than a contractual loophole or ambiguous language. If your contracts aren’t airtight, you could end up paying for it (and attorney fees) later on down the line. This is an area of your business you should definitely not cheap-out on.
4. Be Firm but Fair
Things happen, rent is late, it’s the inevitability of the tenant/landlord relationship. It’s okay to be frustrated when rent doesn’t show up on time, but you have to remember that tenants are people too. Being able to be empathetic to your tenant will foster a positive relationship with them. If you show them respect and understanding, they’ll return it tenfold. With that being said, make sure to set your boundaries and expectations upfront. Maybe one late payment is alright but three months in a row definitely deserves a resolution. Whether this resolution is late fees, an amicable eviction, or cash-for keys (where you pay the non-paying tenant money after vacating the property quickly) make sure you communicate with your tenant that you respect their situation, but you have boundaries and expectations too. You could even refer them to a house with lower rent if you’re feeling generous (and wouldn’t mind the referral fee to boot)!
5. Strictly Control Your Budget
When it comes to any business it’s integral to understand your finances. This means a budget, profit and loss table, and the dreaded 5-year plan (or at least a general one). Costs can get away from you pretty quickly between landscaping, general repairs, and the cost of finding a new tenant (including holding and operating costs). Without a comprehensive P&L (profit and loss sheet), it’s hard to tell whether you’re striking it rich or hemorrhaging money. That’s why every budget should include P&L as well as a plan of how you’re going to invest, spend, or save your money in the future. If you play it right, you can invest in a whole other property! Remember the old saying: Those who fail to plan, plan to fail.
6. Focus on Customer Service
Good customer service is the key to a good reputation and easily finding/keeping tenants in your property. Tenants are becoming more and more aware that their dollar holds power and they’re not afraid to use it. Keeping yourself available and responsive to them is one of the easiest ways to ensure that your tenants will be happy, respectful, and positive from move-in to move-out. The aforementioned landlord software can really help (especially tenant portals)!
In addition, consider going above and beyond by doing small things that can make the difference. Some examples are things like: sending out Christmas cards, giving small thank you gifts for long term tenants who paid on time, paying for a birthday party, or reducing rent for one month. These kinds of things can go a long way toward your real estate investment goals.
7. Know Your State Rules and Laws Regarding Being a Landlord
Just like tip #3, this tip is crucial in preventing attorney fees or legal problems down the line. Knowing your regulations is important because any slip-up could cause trouble with the tenant and trouble with the law. For instance, knowing how many days you have to return the security deposit or what the minimum temperature the house/building can be are two easily missed regulations that could cost you thousands. Be sure to read and understand the Fair Housing Right & Obligations for your state by visiting HUD.gov.
8. Always Strive to Get Better
Nobody’s perfect, so don’t expect to be! There’s always room to improve and you should try your best to reach your fullest potential! You already know why being a “good” landlord is mutually beneficial for all parties involved, so there’s really no excuse in resting on your laurels.
Checkout resources by BiggerPockets.com (and their publisher) to help. Read books, listen to Podcasts. Listen to Audible books or get involved in online forums for landlords (such as at BiggerPockets.com/forums).
9. Ask for Help
Every budding entrepreneur wants to pave their own way, but what’s the point in that when you could just avoid all of the blunders and unforeseen blowups by asking others around you? Find someone you look up to in your field and ask some questions, or find a personal mentor that can give you shortcuts to success. If you’re lucky, they’ll save you a lot of time, money, and mental breakdowns further down the road.
We hope you learned something from our favorite tips on being a better landlord and would love to hear back from you in the comments. Door&Key is always happy to help out, especially if you’re looking to sell your home for a quick, simple, and fair cash price! For more content just like this, go ahead and subscribe to the blog as well.