8 Tips for Being a Successful Landlord
/Whether you’re a seasoned landlord looking to polish your process or brand new trying to get into the game, here are a handful of tips to help you become a successful landlord.
Keep in mind that if you decide to hire a Property Management Company, you won’t have to personally worry about some of these (as long as you do your due diligence and find a reputable management company to represent you), but if you’re the direct contact for your tenants, from pre-screening to move-out, keep reading.
1. Treat Your Rental Property Like a Business
Create a business plan. It’s imperative to have a road map for your success, which may include profit margins, budgeting for repairs, marketing/advertising, applicant qualifying process, tax write-offs etc. You’ll want to get clear about every stage of each process.
Know the law. Certain laws are dependent on the area that your home is in, so make sure you do your research. If your home is in an HOA, also make sure you’re allowed to rent out your property beforehand! Doing the necessary preparation can save you a lot of headache on the back end. It may sound like a lot of work, but this isn’t a fly by the seat of your pants kind of endeavor.
2. Plan Your Lease Renewal Times
If the dates line up, the optimal time of year for a landlord to lease a rental property is between May and October. You’ll not only likely have an easier time finding a new (or replacement) tenant if you’re on a one-year lease cycle, but markets often see an influx in rental property pricing during the summer months due to the demand. This isn’t always going to work though, as a variety of things can factor in your timeline such as the month you purchase your new property, or an eviction mid-year.
3. Qualify Your Applicants
This may seem like an obvious one, but the more you can qualify your applicants, the better your chances of a successful lease with a good tenant. But however you screen your applicants, make sure you do it the exact same for every applicant. That is important. Qualifying factors could include things like credit and background checks, checking references or income.
One very important thing to remember as a landlord is, no matter what your qualification process is, you MUST adhere to Fair Housing Laws. In the state of Colorado it is illegal to deny somebody for things like race, color, religion, sex. national origin, marital status, or disability.
Make sure you do your research and know and obey the laws on a federal, state, and local level.
4. Your Lease Matters
Sure, there are hundreds of leases available online that you could replicate, but don’t be tempted if you want to be covered. You not only want to make sure you have your local laws correct, but to make sure you are protected should you need to seek legal action at any point. Your lease should set clear expectations for both the landlord and the tenant, and it will be worth it to have an attorney draft up or review your lease.
5. Avoid Tenant Turnover
Frequent tenant turnover can get pretty costly. And that isn’t including if your home sits vacant for any period of time with you covering carrying costs. If you have a good renter, it is important to keep them happy! This could include things like being quick to respond to repairs & maintenance issues, giving your tenants privacy, accepting credit card payments, or not jacking up the rent each year just because you can. Think about it - would you rather be collecting a good rent with an awesome renter or getting maybe a bit more and having a nightmare? I’d choose predictability and longevity any day.
6. Move-in & Move-out Inspections
When a tenant moves in, it is not a bad idea to have them do a move-in inspection. Kind of like when you rent a car - the person renting it walks around the vehicle marking down any marks or imperfections. Then upon their return, any new damages are their responsibility. Same goes for your property. Provide the new tenant with a checklist of areas throughout the home for them to note any items of concern at the time of move-in.
Upon move-out you’ll want to do the same thing in reverse. Performing a move-out inspection will be beneficial to you and your business as you will have proper documentation should you need to utilize their security deposit or seek payment for additional repairs.
7. Be Prompt With Repairs & Maintenance
Some areas may have different rules and regulations when it comes to health and safety items, but regardless of the time you have to fix something, the sooner the better, no matter what it is! Sure, addressing a water leak early on would be beneficial to protecting your property, but your tenant would appreciate it too. Being prompt with repairs and maintenance can help with tenant retention.
8. Polish Your Move-out Process
The reality is, tenants come and go. Having a streamlined move-out process can make less stress for everyone. If you have a good lease, your move-out guidelines should be outlined in here for your tenant ahead of time. Once your tenant has notified you of their upcoming departure, you will want to provide them with any move-out paperwork, such as instruction sheet for cleaning or procedures for damages or repairs. If you did a move-in inspection, you’ll want to give them a copy along with a new one for the final walk-through as you go room by room looking for things beyond normal wear and tear.
Rentals properties can be a fantastic way of bringing in more income and generating wealth.
If you’d like me to help you find your first (or next) rental property, I love working with investors, reach out here!
