Starting off as a new landlord has a steep learning curve. The number of situations you will have to face in dealing with your tenants and managing your property represent an unlimited number of possibilities, many of them unpredictable.
However, with the help of a few tips from those in the landlording business who have experienced it all, you will be better prepared to make the best decisions for your rental property.
Here’s what you should know if you’re a newer landlord.
Set Clear Expectations
At the start of any landlord/tenant relationship, the priority should be clarity of expectations. Problems will arise if tenants have the wrong idea about the charges they will owe, the maintenance they are responsible for, and what your role is as a landlord.
Start every lease agreement by sitting down with your new tenants, going over every detail, and ensuring that you create a transparent environment in which all parties feel free to ask questions.
One of the most common causes of lawsuits for landlords is security deposit dispositions. This is one component of being a landlord in which you need to be especially clear to your tenant on what the security deposit is and what it is for. This clarity is necessary for you as well, as some landlords incorrectly handle security deposits.
This money belongs to your tenant and should be held by you in a separate account. Only spend the security deposit if damages caused by the tenant—per the lease agreement—require it. Otherwise, that money is owed back to the tenant upon their exit from the property.
Ensure that this—and all other expectations—are clear between you and the tenant to avoid problems.
Maintain the highest standards of communication
In this same vein, all forms of communication between you and the tenant should retain the highest standards of clarity, transparency, and professionalism. Your tenants should know how they can reach you, be able to contact you in the event of any question or concern, and make timely maintenance requests.
This means utilizing digital technology for ease of use. Often, a tenant portal that they can access anytime and from their mobile devices is useful in this regard. Accessibility is key in helping maintain your property and your relationship with the tenant, so offer various platforms on which to access you.
If you are out of town or unable to deal with a solution, provide a voicemail or email inbox that can be reached by you or a coworker in a timely manner. Allow tenants to contact you over social media, even, if you are able to set up a business profile.
Being a landlord can be a 24/7 job, so create methods of communicating with tenants that won’t be too invasive in your personal life.
The Lease is Law
In setting clear expectations and maintaining quality communication, your lease agreement is a vital component. This legally binding document is a contract between you and your tenant. They will be required to follow the provisions they agree to with the same authority that you will be required to follow yours.
This means that you have to create a lease agreement that is fair, clear, and enforceable. You want your tenants to know exactly what their responsibilities are in caring for your property, just as you want them to know exactly what yours are. A clear lease means stated penalties for misconduct—such as a fee for late rent—that is enforced every time without fail.
When you don’t act upon the provisions in your lease, you are communicating to your tenants that the rules do not matter. This can open you up to situations in which tenants seek to take advantage of you, playing on your emotions rather than your stipulated agreements.
Avoid uncomfortable situations by following your lease to the letter, all the time.
Make property care your primary responsibility
Maintenance of your property should be your highest priority. After all, the property is your business, and you as the owner of that business need to treat your assets according to their worth. That means conducting regular inspections, taking on maintenance responsibilities, and enforcing penalties for damages.
You should not allow your property to go to long without an inspection. Every six months to a year is usually sufficient in ensuring that your tenants are taking good care of your property. Give them the proper notice before conducting an inspection and be sure to check for preventative maintenance items that can stop a problem before it occurs.
You also don’t want to trade out rental income for your tenants conducting maintenance for you. Many landlords fall into the trap of offering discounted rent in exchange for a tenant making minor repairs themselves. This can lead to a poorly cared for property as well as lost income for you.
Handle your maintenance tasks yourself or hire professional assistance. Then, if damages have occurred because of the tenant, be ready to charge it to the tenant as per the lease agreement.
Maintain Professional Relationships
Another easy trap to fall into as a landlord is to get involved in a tenant’s personal life and fail to maintain the necessary distance that your business relationship requires. Your tenants are not occupying your property as your friends, and if you plan to let a friend rent from you, think again.
A landlord/tenant relationship is a business relationship. As difficult as it can be to hear the troubles of a tenant’s life and not allow them some leeway, you are legally obligated to follow your lease. Anything less can lead to troubles of various kinds.
The potential for tenants to take advantage of your empathy can lead to lost rental income, damaged property, and a host of other costly issues. No matter a tenant’s situation, you need to treat them with the fairness you would show to any other tenant. You are operating a business and have no obligation to run a charity.
Be fair, open, and willing to admit mistakes
At the same time, you also need to maintain a respectful attitude towards your tenant. The landlord/tenant relationship can be tricky because, while you are offering a service, that service becomes an intimate part of other people’s lives. A home should be a place of privacy and security, and as a landlord, you need to respect that.
This means acting with fairness and empathy, with regards to your agreements. Be open to hearing from and helping your tenants in a professional capacity, recognizing how issues with the property may be affecting their lives.
You are running a business, and customer service is a large part of that business. Sometimes, the customer is right, and you will need to acknowledge where you might have made mistakes. Be willing to learn and improve as you grow as a landlord.
Final Thoughts
At the end of the day, your property is your business. This means maintaining professional standards at all times, keeping the highest standards of communication, and enforcing your lease agreements.
A landlord has to fulfill a variety of functions. From handyman to customer service specialist, you need to be ready to take on a variety of roles in the course of managing your rental property.
For more information on property management and real estate investment, contact 208.properites.