Being a landlord can be challenging, but it can also be very rewarding. Landlords can earn a lot of money, or they can spend a ton of money on legal fees and lose more than they make. You can self-manage your rentals or outsource it and be hands-off. Either way, doing it right and doing it well can save you money, heartache, and probably legal fees. It will also attract quality tenants, who will take care of your asset.
No matter what strategy you pursue as a landlord, here are a few things you should do no matter what.
How to Be a Good Landlord
1. Treat your business like a business—always.
Open business bank accounts, keep track of your receipts, cut unnecessary expenses. Legitimize and protect your asset with appropriate entities and insurance.
2. Build quality, lasting systems.
This is the next step to treating your business like a business. Build systems to do recurring things routinely. That way, you’ll be able to respond to issues that come up with your tenants or issues that come up with the property.
3. Know the laws.
Make sure that you’re using all the right leases and documentation based on the requirements of your state. Hold deposits in the right type of bank account. Check out American Apartments Owner’s Association’s website for a breakdown of requirements by state.
4. Take care of your tenants.
Your tenants may come into hard times or may experience financial or personal difficulties. After all, they are human, and they deserve empathy and to be heard. Ensure that they know the lines of communications are open and you’re going to take care of them.
I do not suggest posting an eviction notice on the door of a great tenant who always pays on time if they are one day late. If they’re communicating with you and telling you that they are going to bring you the rent payment, hold them to that and come up with a payment plan.
Build trust with them and let them perform. If they don’t, defer to what the lease says and take further action. But a good tenant deserves the benefit of the doubt (at least once).
5. Do exactly what the lease says.
Stick to your word, and stick to the lease agreement between you and your tenant(s). If you break the lease—even one time—you’re telling your tenant the lease is not important and giving them the freedom and flexibility to do the same. If you uphold the lease, your tenant will respect you and will understand that the boundaries are written in black and white and violations will not be tolerated.
6. Treat your venders well.
Pay vendors on time, pay them appropriately, and treat them fairly. But also hold them accountable. If you asked them to do a job, make sure that they do it well and then compensate them in a timely manner.
These are just a few of the things good landlords do. It is by no means an exhaustive list, and there are plenty of additional things you can do as a landlord.
Being an awesome landlord is not only fulfilling, but it can also be very lucrative. You need the right tenants to preserve your asset and build your wealth, so it is imperative that you do your best to be the best landlord that you can be. This will allow you to find and keep great tenants!