Owning and maintaining a rental property as an investment can be both lucrative and rewarding. However, it can be a difficult transition for many people to make, particularly during their first time as a landlord. Most of us have only known the business from the tenant side, a much different position than that of owner and manager. You will need to determine your own landlord-ing rules, methods, and identity to suit your goals and your personality.
You will also need to work to develop some practical knowledge. Unfortunately, no one gives you a guide to owning a rental property when you sign the mortgage. Frankly, even if they did, such a guide would likely be of little use. Many of the decisions you will make as you get your stripes as a landlord come down to your personal choice. Keep in mind that forearmed is forewarned. You will continue to learn how to be a landlord while you are busy being a landlord. Your goal in the beginning months and years should be to avoid learning by mistake wherever possible.Ask Around
You've probably already done this, to some degree. Odds are you have a friend or two that owns a rental property. Perhaps the tales of their experiences are what convinced you to take a shot at rental ownership in the first place. Continue to pick their brains. They will have faced many situations that you may not have even considered, and know a proven way to deal with them. Importantly, they have already made a number of their own mistakes which they can help you avoid.
Reach out to new sources, as well. You will come in contact with loan officers, contractors, and other property owners in your day-to-day business as a landlord. Don't be afraid to ask them for advice, but be sure that the recommendations are right for you (contractors, for example, may be angling for an up-sell), but never be afraid to ask questions and listen.
Don't stop with professionals, either. Virtually everyone you know has probably rented their lodging at some point in their lives. Talk to them about their experiences. "Who was your favorite landlord?" "Tell me about your worst rental experience." These sorts of things are important to consider as you develop your style, and valuable ideas and information can be found in unlikely places.
Build Your Network
If you followed the pointers in the above section, you should be well on your way to building your network. As a landlord, you are going to have to call A LOT of people, particularly if you are going it alone rather than hiring a property manager. Bankers. Accountants. Attorneys. Painters. Plumbers. Refrigerator salespeople. Refrigerator repair people. Landscaping professionals, you get the idea. It helps to know whom you can rely on before you need them. If a furnace goes out in the middle of the night during a hard freeze, you may not be legally allowed much time to get it resolved. It certainly saves time to already have a few choices in your contact list when the disaster occurs.
Ask for referrals early and often. It can never hurt to have multiple contacts for certain situations. This will help when you need a second opinion, or when your first choice is unable to address your issue in as timely a fashion as you might need. Or your second choice. Or
Maintain Rather Than Repair
As long as we are discussing disasters, let's discuss avoiding them. It is almost always more expensive to repair or replace than it is to maintain. Stay on top of routine maintenance of your structure, appliances, and the like. A few months before summer and winter begin, have your heating or cooling services inspected, ducts cleaned, etc. There's something that goes here about an ounce of prevention, but let's keep it at this: Repairs are expensive and often take a long time. Avoid them as much as possible.
Develop Your Personality
The landlord/tenant relationship is certainly a business relationship, but it's trickier than just that. Yes, this property represents at least a portion of your livelihood, but it's also wise to keep in mind that your property also represents your tenants' homes. While many may tell you that it isn't wise to be friends with your renters, the best landlords carefully navigate both the professional and personal levels of their relationships with their tenants.
It's important to know what kind of landlord you will be prior to selecting renters for your property, as your needs and wishes will advise the search for your tenants. That will be the next big hurdle to jump for a new landlord, and it's a doozy.
Get the Right Renters
You need to determine your target demographic for your property. If you are still looking for the right property to purchase, this can be informed by the sort of renters you would like to attract. For example, many studies have been done regarding the areas and amenities that millennials most frequently desire when searching for their next home. If you would like a property to attract millennials, you might tailor your search for properties in a particular neighborhood, or near desired amenities.
If you already own your property, determining the kind of client you want will help you tailor the marketing for your property. If we again use millennials as an example, you will probably want to utilize social media and renting apps more heavily than you might otherwise.
You also want to screen your applicants well. Remember that the information on their application may look incredible but it might also be built on lies. They may have omitted details to cover up evictions or crimes in their past that could entirely change the way you fell about them as potential tenants. We highly recommend enlisting the services of a professional background screener to verify your future tenants. They will be able to tailor your service to your needs and help you get the information that you most want to be verified.
Keep Good Records
You never know what details might become important down the line. Prepare to keep records of virtually everything from receipts to the reason you may have passed on an applicant. The laws and regulations for landlords frequently change, and having the proper documentation available to you could someday make all the difference.
Learn the Rules
Speaking of laws and regulations, you will need to know them. Bone up on all of the laws, rules, and requirements relating to tenants and landlords in your country, state, and municipality. Remember that they can change often, so you will also need a suitable method to keep track of changes. Consider joining a professional organization that may discuss these sort of issues in their meetings. Perhaps you can find continuing education curriculum for rental owners in your area. In any event, a firm knowledge of the law can help you avoid costly lawsuits down the line
Ask for Help...If You Want
I'm adding this last, because I don't want it to sound like a commercial, but I sincerely hope you will consider hiring a property management company to help take some of the work off of your plate. If you've read this blog post so far, you've gone through more than 1,200 words of just the basics. A property management company has already been through the basics and has resources and relationships at their disposal to make your landlord experience a breeze.
We aren't necessarily saying that hiring a property management company is for everyone, and we certainly don't mean to imply that we would be your ideal choice of property management firm, should you decide to hire one. However, the benefits of retaining a reputable property management company should absolutely be considered by any rental owner in the business.
If you're looking to do it yourself, we've created a Make-Ready Checklist to make sure your proeprty is ready for your next tenant. Click the link below to get started with our free download.