Being a landlord isn’t simple, plain and simple! If it was, then everyone would be doing it. As a landlord, you have to deal with tenant complaints, rent collection issues, and what can seem like endless, high property maintenance costs.
That said, being a landlord doesn’t have to be a drag. In fact, being a landlord can become a highly successful source of income if you manage your properties efficiently and effectively.
But, how exactly do you do that? By learning from those who have succeeded in this tough industry. In most areas of business, successful people have certain habits that have helped them with their productivity.
People only notice the ultimate success story, but what made them who they are? If you ask them, it turns out it’s usually because they have daily habits and mindset for success.
Are they superhuman multi-tasking machines who don’t sleep? Most certainly not. Are they talking, walking charm-bombs? Probably.
Either way, succeeding in the landlord business isn’t by mere luck. You have to have certain rituals and follow them to the letter. Here are 7 habits you should try to follow to make your rental-induced headaches disappear.
Highly effective landlords have an iron-clad lease agreement.
This is a huge one. It’s no wonder it’s the first one on our list.
Congratulations! You have successfully advertised your rental property and landed what you may call a good tenant. So, what next? Well, the next step is to present your new tenant with an iron-clad lease agreement.
Now, a lease agreement is meant to protect you. However, for it to serve you as intended it has to be properly written. For starters, you want to make sure that your lease covers basic things like:
- Names of all tenants. You want to include all the names of all adult tenants living in your rental property. This helps make each tenant legally responsible for the terms of the lease.
- The terms of the tenancy. Every new tenancy must come to an end. As such, you need to specify clearly how long a tenancy will run. Tenancies are usually month to month or fixed.
- Limits on occupancy. You want to determine who lives in your property. Ideally, these are people whom you’ve screened and approved to live there.
- Rent. Rent is often the number one source of issues when it comes to the rental business. To avoid this, make sure your lease specifies details about the rent. For example, the exact amount of rent, when rent is due, acceptable payment methods, and the amount of grace period.
Highly effective landlords respect the privacy of the tenants.
Tenants have a right to the quiet enjoyment of their homes. Essentially, this means that you cannot barge in on your tenants as you like.
Several states require that landlords give their tenants adequate notice before they can enter the rental unit. The reason for the entry and the timing must also be within reason. To learn more about the laws in your state, check out these guides.
Highly effective landlords conduct tenant background checks.
Renting to the wrong tenant can, and often does, result in lost income and time, and damage to your property. Ever heard of those horror landlord stories? I bet you have!
A key to success in the rental business: never allow new tenants in without screening them first. This is the only way you can help minimize renting to the wrong type of tenant.
Now, screening tenants involve a number of steps. First and foremost, you must verify that they are making enough money to afford your rent. Generally, ensure they are making no less than two- and a half times the rent amount.
That is, if the rent is $1,000, then make sure they are making at least $2,500 every month.
Next, you also want to look at your tenant’s rental history. Here, you’ll want to call on the some of the tenant’s previous landlords to learn a thing or two about them.
Another thing you wouldn’t want to forget to check is the tenant’s credit history. Here, you want to check whether the tenant is financially responsible or not.
Highly effective landlords document everything.
From the rental application form to records of every single email or phone call, keeping records is key to running a successful rental business.
This information can prove extremely beneficial especially when things take a legal perspective.
Highly successful landlords hedge their bets with pets.
According to a survey conducted by the American Pet Products Association, about 85 million families in the U.S. own a pet.
By allowing pets, you dramatically broaden your tenant pool. In turn, this minimizes the chances of your rental property being vacant. That said, not every property is suitable or appropriate for pets.
So, if your rental property isn’t, then considering a “no pets” policy may be in your best interest.
Successful landlords that allow pets usually have a solid pet policy. Generally, this guides the number, size and type of pet a tenant can keep. Moreover, some even charge an extra deposit to tenants with pets. This helps cater for any damages the pet may cause during the term of the lease.
Highly effective landlords know the laws.
The rental property business is regulated by a smorgasbord of laws. These laws vary by state. They cover things like rent, security deposits, landlord-tenant responsibilities, rights of tenants, and evictions.
You can get a copy of these laws online from the Department of Housing and Urban Development (HUD) website for your state.
By following these 7 habits of highly effective landlords, you can help ensure your rental business becomes a success. Remember: Consistency is key!