Investing in real estate is one of the most efficient ways to exponentially grow your finances. In fact, people often purchase property solely to take advantage of this opportunity.
A great way to generate passive income is to rent your property out to tenants. However, self management as a landlord isn’t always straightforward.
Let’s explore the strategies you can use to make handling your rental properties easier in the future.
1. Familiarize Yourself With the Role
As you might expect, it’s in your best interest to research this role as much as you can. Interestingly, many people choose to invest in rental properties without fully understanding what a landlord is responsible for.
The good news is that it won’t take long for you to get up to speed. If you happen to know anyone in the industry, it’s recommended that you reach out to them for landlord advice. Even a simple conversation can go a long way when you are first getting started as your own property manager.
2. Establish Clear Channels For Communication
One of the most important landlord tips to keep in mind is the fact that you need to be able to clearly communicate with your tenants. However, they should also feel like they are able to easily communicate with you.
For example, let’s assume that a landlord is not very personable and doesn’t go out of the way to provide their tenants with contact information. If an issue arises within the home, the tenant may not know how to get in touch with their landlord. Similarly, they may feel compelled to resolve it on their own even though it’s an obligation that the landlord should handle.
In general, it’s best to provide multiple ways for your tenants to contact you in order to instill a positive and lasting landlord-tenant relationship.
3. Don't Neglect Tenant Needs
There will inevitably be times where your tenant needs your help. One of the most common scenarios involves home maintenance, such as if an HVAC system begins to exhibit issues.
One of the worst things that you can do as a landlord is put these issues on the back burner. Although you have other obligations in your life and may even own multiple properties, there is no excuse for not being proactive. Failure to do so could earn you a poor reputation as a landlord and make it harder to find tenants in the future.
Additionally, you may encounter legal issues if you do not take the appropriate action within a reasonable amount of time.
4. Always Perform Background Checks
It is your duty to keep the community around your home safe.
If you rent to someone who is liable to cause property damage, assault/intimidate others, etc., you could be setting yourself up for consequences in the future.
Instead, it’s essential that you run a company that has a background check on every potential tenant that you encounter. This includes checking criteria like credit history, criminal history, and past rental history. All of these factors are important to consider.
Although a tenant may have stellar credit and have no criminal record, you could be at risk if they have had multiple evictions in the past.
5. Avoid Vacancies at All Costs
When a home is vacant, you are responsible for paying all of the ongoing costs.
Between your mortgage and utilities, extended vacancies can quickly add up to be thousand dollars. So, you’ll want to have a plan to minimize the number of vacancies that you experience.
In the event that your tenant has chosen not to renew their lease, you should begin taking action to advertise the property. For this reason, it’s common for landlords to require written notice ahead of time from a tenant that they are planning to leave. This will allow you to make the necessary arrangements.
6. Increase Your Rent Annually
Some landlords are very accommodating, which is not a negative attribute. However, this sometimes means that they do not wish to increase rental rates each year.
Unfortunately, forgoing this opportunity will actually cause you to lose money due to inflation. Marginally increasing your rental rates each year will ensure that you protect yourself financially. Of course, you should not be predatory when you choose to increase rent for your tenants.
Additionally, you should let them know ahead of time that you plan to do so rather than surprise them with a new bill.
7. Enforce the Rules That You Set
When you lay down rules as a landlord, it’s imperative that you enforce them. It’s not uncommon for landlords to accommodate tenants that do not have the best interests in mind.
To clarify, let’s assume that a tenant is consistently late with their rental payments. A landlord who does not hold the tenant accountable will likely experience financial hardship. Allowing this behavior to continue will only convey that it is acceptable.
Enforcing rules does not mean that you have to be unreasonable, though. Use your best judgment when deciding whether or not to take action against your tenant in a specific scenario.
Self Management as a Landlord Can Seem Difficult
Under many circumstances, though, it will be much easier than you expect. Be sure that you keep this in mind when moving forward so that you can take advantage of all the opportunities that self management brings.
Want to learn more about what we have to offer? Contact RentSafe today to see how we can help make your role easier.