Being a landlord comes with a ton of benefits. Building your wealth via property is always a good way to go, as it allows for practically infinite scalability and the ability to generate income passively. Property also increases in value over time, and with so many different types to choose from, this sort of business offers a varied, always exciting way to make money.
That said, it’s no walk in the park. The notion that being a landlord is somehow a license to print money is a gross overstatement. While it’s true that passive earning is a component, you’re going to have to put in a lot of work to get there.
Many people don’t truly have what it takes, and if you’ve been thinking about doing this, you’re going to need to conduct a deep evaluation of the feasibility. To help you get started with that, here are seven tips for success when it comes to being a landlord.
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1. Operate Like a Proper Business
One of the biggest problems landlords have is that they don’t treat their pursuits as a proper business, instead behaving as if they simply own a couple of properties they casually let on the side. This isn’t good for their tenants, and it isn’t good for them.
Managing your properties properly takes a lot of care and attention, and you’ll need to be highly organized if you hope to succeed. That means tight budgets, strict policies, automated systems, and close collaboration with other professionals.
This level of organization ensures you’re getting the highest return on your investment while also providing your tenants with a space they deserve for the money they’re paying.
2. Screen Your Tenants With Care
Every successful landlord relies on a rigorous tenant screening process, as there’s simply too much at stake to be lax here. The wrong tenant can cause untold destruction, both to your reputation and the property they’re renting, so you’ll need to devise a systematic, repeatable method for whittling down your applicants.
Your first port of call is to use a well-designed rental application. From employment status to rental history, this will provide you with all the information you need to understand whether to take things further with a given potential tenant. From there, you can conduct a full interview to get to know them better and then make your decision.
3. Plan for Emergencies and Extra Costs
No matter how careful you are, emergencies and the need to foot extra costs can arise. You can’t prevent this from happening completely, but you can at least put a few measures in place to make mishaps less likely.
Many of these measures also line up with your legal requirements. Start with ensuring the basic infrastructural elements, such as the plumbing, electrics, roof integrity, fire safety measures, and water heating systems, are checked, and devise a regular servicing schedule for appliances that need it in accordance with the law in your area.
You’ll also want to plan for unexpected vacancies, as this can potentially cost you a lot of money. To mitigate this risk, try to keep at least a couple of months of property expenses available in your savings to tide you over while you work to find a new tenant.
4. Regularly Review Your Legal Responsibilities
Every landlord understands their responsibility to adhere to the relevant legal frameworks that govern rented property, but too few stay up to date with them.
Looking into rules, laws, and regulations isn’t something you do once and then forget about. Things are constantly changing, so you’ll need to keep your finger on the pulse to make sure you’re protecting your tenants and yourself.
Every couple of months, re-familiarize yourself with the law around rent, eviction procedures, property inspections, and tenant rights, and be extremely strict with yourself in how you adhere to what’s outlined.
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5. Take Maintenance Seriously
As a landlord, maintenance is your bread and butter. It’s something you should take very seriously, not only for the protection of your property, but for your tenants’ well-being and safety.
Come up with a clear schedule that you go through with a fine-toothed comb regularly for each property. This should include the checks mentioned in the section above for the basic infrastructure, as well as exterior repairs and decor touch-ups. You should go in with the mindset of never giving your tenants a reason to complain. Think about this: if you were a tenant, what would you expect? Would the property you present be acceptable by your standards, and if not, how should things be changed? Try not to get disconnected from how people live and what’s acceptable.
6. Communicate Clearly and With Compassion
The reality is that landlords get a bad rap. Many people consider them vultures who don’t care about their well-being and just want more money, so you need to do your best to prove that not every landlord is like this.
You should always strive to have a good relationship with your tenants. This doesn’t mean you need to be their best friend, as that would be stepping over a line in the opposite sense. Instead, consider the sort of relationship you’d form with a respected colleague or business associate: clear and concise communication is key, and you should also be compassionate and attentive. If there’s a problem, approach it with empathy and understanding; even if your tenant is upset at first, they’ll appreciate your efforts to understand and correct things.
7. Always Strive to be Better
And finally, a rule that can be attributed to all forms of business: always strive to be better.
You don’t have to make huge improvements every day, but consider small ways to better your business and implement little changes where you can. Over time, these add up to make a big difference – a difference that puts you a cut above the competition.
The best way to go about doing this is with regular periods of reflection. Gather feedback from your tenants, and every month, see how you can improve their standard of living. The more tenants you retain, the more successful you become, and the better your reputation.
Wrapping Up
Hopefully, you’ve found this article useful for investigating the feasibility of becoming a landlord. It won’t be easy, but this can be an extremely rewarding job for the right person. Good luck!
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