You have become a Landlord ….. Now start planning how to become a successful landlord.
For any business to succeed, there ought to be a plan or roadmap for how the business will be carried out. Do you not agree? Theis roadmap is put in place after lots of thinking by the owner.
Let’s start with what you would like to achieve, and then we’ll talk about how to do that.
In simple terms, these are the things you’d like to achieve off your landlord business.
- Keep the landlord operation smooth and under control
- Would keep you out of trouble
- Save you thousands of dollars
- Help you achieve long-term success
And the following is the list of good practises and habits you would like to cultivate along the path of your landlord career to achieve your goals. Please be mindful, this list is not perfect or complete. There can be n number of other practises or habits that can be added to this list depending upon individual experiences and convenience.
These are very important practices and you would like to follow them at any cost.
- Rent payment is what you work for
- Assign regular weekly hours to gain knowledge of landlord related topics
- Keep in touch with the prevailing rental market and current rent
- Always use up-to-date documents
- Don’t be afraid of sending out the eviction notice
- Don’t ignore maintenance and repairs issues
- Learn how to find a better tenant
- Learn from your mistakes
- Be respectful to your tenant
- Pay attention to your bills
- Always use professionals for repairs
- Walk like a landlord
- Keep trying to find a way to improve your profitability
- Don’t forget to get every agreement signed by the tenants
Rent Collection- would make you Successful Landlord
Rent is the most important aspect of your business. There is nothing else more important than the collection of the rent. Pay attention to collect rent in time. Let your tenants know you would not allow any liberty with rent payment in time. It’s sometimes prudent to help out a good tenant in their difficult times. But in general, landlords should be aggressive and disciplined in their rent collection policy.
Assign regular weekly hours to gain knowledge of landlord related topics
Assign regular time to gain knowledge of topics like local and provincial legislation related to landlord and tenant, how to evict a tenant, utility bills, regular upkeep of the property, rent increase rules, tenants responsibility and so on. when it comes to knowledge, more the merrier.
Becoming an expert will help you in 2 ways. It’ll help you in taking firm control of your business. 2nd benefit is that it’ll increase your involvement. Ultimately this process will lead you to become a successful landlord.
Keep in touch with the prevailing rental market and current rent
What is the latest trend in the rental market? Most North American regions have Government or independent agencies who bring out a regular rental market report. Check those reports. Also, keep checking Craigslist or Kijiji Pages to check out prevailing rents in your area. This will help you in your approach when you are negotiating rent with the new tenant.
Always use up-to-date documents!
I can’t stress enough to use up-to-date documents all the time! It can be a costly mistake to use wrong legal forms. New landlord tends to save by using an outdated old copy of a lease, eviction notices etc. In the age of the internet, you’d get these documents online, which may not be correct to use in your jurisdiction.
Let’s see this issue in a different way. It would not cost you a lot to take advise from your realtor who can help you find the correct forms. Many states and provinces have all the forms available on the websites. It may not cost you a fortune to hire a paid service like Lawdepot or Legelcontracts. For just under $100/ year, you can get all the required forms as many time as you want.
Bottomline, you have to understand the importance of using the correct and up-to-date- documents. This step will take you a long way towards becoming a successful landlord.
Don’t be afraid of sending out the eviction notice
When you are new it’s a general tendency to be afraid of giving an eviction notice against the late payment of rent. Most novice landlord allows late payment of rent. The logic behind this tendency is that giving out an eviction notice would permanently harm the relations with the tenant.
Here is the right approach. Let your tenant know you would not allow any late payment without prior written notice. Also, follow the policy which you have put in place. Once you allow late payment, it’ll keep hassling you every now and then.
Don’t ignore maintenance and repairs issues
The big repairs can’t be ignored. Replacing furnace, or install the new singles on the roof are the examples of big repairs. More attention should be given to small issues. I’d give you one example. Let’s say the automatic door closure of the main entrance door of your multi-unit property has stopped working. It would start leaking the hot air out as especially in the winter time. Because it’s common area issue, your tenant may not report it to you immediately. There may not be a significant increase in your bill. This may sound like a small issue, isn’t it?
This is the perfect example of how you can fall prey to casual approach. If you want to really be a successful landlord, you can’t ignore such issues. You should get into the habit of being on top of your landlord business. Most successful Landlords have yearly inspection and checklists to take care of small and petty issues.
Learn how to find a better tenant
Inexperienced and novice landlords tend not to pay for the credit check to save money, while tenant screening. They don’t realize how much that’s going to cost them later on. There are a number of other things which comes in the list of tenant screening. , Previous landlord reference check, Personal reference check, the list of qualifying questions, job check and so on. The process of tenant screening evolves with your experience. And the landlord has to work hard to master that process.
Learn from your mistake
Some example of mistakes and consequences are –
a. To allow a guest without a permission. – This can hassle you with partying and loud music by your tenant and the guest.
b. Not visiting your property for a long time because you are receiving your rent regularly and there are no complaints from the tenants – This can result in no outside maintenance of the property even though its tenant’s responsibility.
c. You have a lease with the tenant which allows utility bills to be paid separately from the rent – This can result in you getting hassled to contact tenants 3-4 times a month for collecting all utility bills and rent separately.
You have to learn from the mistakes and make sure you don’t repeat them. In each of the above case, it’s not difficult to find the remedy for the next time. Try to find a solution that is practical and make your landlord operation more efficient.
Be respectful to your tenant
It pays off to keep good relations with your tenants. Always try to be decent and polite to them. In case of problems, dive deep to find the reason of the issue and communicate professionally, but firmly.
Pay attention to your bills
If you have some or all bills included in the rent, it becomes mandatory to keep an eye on the tenant’s use of the utilities. But even if your tenants pay their own bills, you should keep a track of the bills because that way you would know how energy efficient your property is and potential problem.
Always use professionals for repairs
Refrain yourself from doing shoddy repairs with the cheap handyman. Only use professional services with a licensed person after checking good references. This will be your best bet in the long run. Always remember, this is your rental property. Doing bad repairs will affect your tenant and your impression of them.
I am not suggesting that you should hire professionals to replace light bulbs. My suggestions is to be mindful of hiring the good quality services from licensed contractors wherever it is necessary.
Walk Like a Landlord
After becoming the landlord, Step number One – Walk like a Landlord! Attitude makes a big difference. Think about how to gain respect from your tenant. All the communications, whether over the phone, email or in person, should be polite and professional. If required, get initial help from the realtor, who helped you buy the property, what is expected off of you.
Keep looking out the ways to improve the profitability
How do I do this? Here are some examples –
- An old garage which needs a new roof is an opportunity for some extra monthly rent
- The property with the electrical heating system can be converted into a natural gas heating system to start saving monthly energy cost
- Invest in solar penal which can be installed on top of the roof to start earning by the way of selling electricity
Another very popular way to increase profitability is to increase the rent when you have a new tenant coming in.
Don’t forget to have every agreement signed by the tenant
Very important to have every document signed by the tenant and preserve it properly. More often than not, a landlord gets into a dispute of some kind with tenants. You’d help yourself avoiding a whole lot of hassle if you have everything documented.
Clearly, at the first step of your landlord career, you have to see the bigger picture. Always think about long-term success.
If you don’t take the right steps in this beginning stage, after a few months or after a couple of years, you would find yourself in trouble. And you would go in skepticism whether your decision to go into landlord was right in the first place or no.
As against that, if you start on the right footing, you would have fewer troubles. You would be able to run an efficient and profitable landlord operation. Which, in turn, mean you would be able to become a successful landlord in the long-term.