To run an efficient rental property you need to be a good landlord. There are many rental property owners who do not have the residual cash flow to hire a dedicated property manager. This puts them in the front lines with all of their tenants. Instead of treating it as a job you should think about all of the positives the property is affording you. In addition to any cash flow received there are tax breaks and equity created. All you need to do is keep the cycle of tenants coming and going. Being a good landlord means thinking of the little things that are important with tenants. Here are four hidden actions that will make you a better landlord.
- Take Care Of The Property. You can be the nicest person in the world but if the refrigerator doesn’t work it won’t make a difference. The single most important thing you can do for your rental property is take care of it. It may sound like a cliché but the best landlords treat rental properties like their own. When something needs to be repaired or replaced they do it as quickly as possible. They wouldn’t want to be without heat in the winter or without a working refrigerator in their primary residence so they don’t stand for it with their rental property. Not only do they fix things in a timely fashion but they take care of the property year round. They perform seasonal maintenance on the furnace in the winter and the HVAC in the summer. They are always one step ahead of any potential problems and don’t ask questions or point fingers when they occur. If you want a better property and better tenants you can start by taking care of it.
- Know Your Tenant. There are many landlords who will tell you to run your property like a business. While this is certainly true you also need to factor in human feelings and emotions. You are renting to real people and not just a name and data on an application. Take the time to get to know your tenants. You don’t have to be best friends but there is nothing wrong with asking questions and building a relationship. To take this a step further every time you see your tenants you can ask them how work or school is going. If you know their favorite sports team mention last weeks game or something relevant that is going on. What the by the book landlord doesn’t know is that little acts like this that have a big impact. If your tenant personally likes you they will be more inclined to insist to their guests to take care of the property. They will call you when minor issues pop up that could save you thousands. They will be more likely to pay their rent on time, every month, regardless of what else is going on. All you need to do is spend just as few minutes getting to know your tenants.
- Referral Discounts. Most landlords will tell you that the most difficult task they have is finding new tenants. Even if hot markets the odds are you will have to screen a handful of tenants before you find one you are comfortable with. Additionally this means you have to drive to and from the property for showings and spend time reviewing applications. In a perfect world you would be able to find a referral source to eliminate all this work. There is often no greater referral source than your existing tenants. Start by asking your tenant what their intentions are for after the lease. Assuming they are not leaving the area they very well may want to stay but aren’t sure how to go about asking you. When you are within a few months of lease end come out and ask them if they want to renew their lease. If their answer is no you should ask them if they know anyone that may be interested. Furthermore, you should offer an incentive if they find someone. A $100 gift card is a small price to pay to avoid having to screen and find a new tenant. If your tenant is on the fence and you are happy with them why not offer a slight rent reduction to get them to stay. A $25 reduction in rent won’t have much of an impact either way to your bottom line but may make all the difference to your tenant.
- Firm But Fair. Being a good landlord is a lot like being a good parent-you need to know where to pick and choose your battles. The common thought amount landlords is that you have to rule your property with an iron fist. Well, sometimes this can have a negative impact. If your tenant is a few days late you shouldn’t badger them with phone calls. Yes, according to your lease you have every right to collect a late fee and demand your money but you need to be smart about it. From time to time a tenant may have a temporary problem. Instead of getting your rent on the first you don’t receive it until the 8th. Is this ideal? No. Is it the end of the world? No for that as well. Instead of freaking out and threatening eviction you should get to the root of the problem and find out if it will happen again. If you are comfortable that the issue is short term your tenant will appreciate you not going over the top. If the issue is a sign of trouble you have every right to take further action. But, before you do you should ask yourself if you really want to deal with an eviction. Sometimes it makes more sense to look at the big picture.
Sometimes the simplest approach with your rental property is the best. Think about your tenants and treat them, and the property, how you want to be treated.