Owning rental property is not always an easy way to make money. But it doesn’t have to be drudgery, either. Enjoying your role as a landlord is completely possible, when you follow these simple tips for success.
- Practice patience. It takes a great deal of patience to be in this business. Tenants are people, with problems and struggles. Not all tenants will treat your property exactly as you would. Not all tenants are great at following through, paying rent on time or parking in the right spot. They might drive you nuts, but they are your customers, who make it possible for you to have a rental business. Be patient when they’re upset, and be patient when you’re upset. Breathe and count to ten.
- Remember, this is a business. It’s important to take a “strictly business” approach with tenants. Owning and leasing rental property is a business. You’re not a non-profit organization with a mission to house people for free or less than market rent, are you? Remind yourself of that whenever necessary.
- Enforce the rules. If you don’t take a strong stand with your tenants, you will lose control quickly. Sometimes (well, often) you have to say, “no.” You have a legally binding agreement with your tenants, and when you don’t require them to uphold their end of the lease, the relationship becomes something less than business. It could have ramifications down the road, especially in evictions and other court actions.
- Enforce the rules equally. Making exceptions to a rule, such as offering an extra day on paying rent to Tenant A and allowing Tenant B to grill on the patio—when your lease clearly forbids each of these activities—is asking for trouble. Not only is this type of action a slippery slope (before you know it, everyone is grilling on their patios), but even more important, it could be interpreted as a form of discrimination. Here’s why: what if Tenant C needs to pay her rent a day late, too, but you refuse to allow it? What if she thinks it’s because you are showing preference to Tenant A based on race, creed, color, religion or marital status? Whether you intend it or not, perceptions can often lead to charges of discrimination and even lawsuits.
- Listen. Landlords need to be good listeners. When tenants feel heard, they feel respected. A little respect goes a long way toward establishing good landlord-tenant relationships.
- Screen every tenant applicant. Conduct tenant background checks, credit checks and reference checks on each person over 18 will be living in the rental unit. Landlords who make exceptions to this rule can be seen as discriminating against certain applicants (see #4). Plus, they usually live to regret it. “I’ll never do that again,” is a frequent lament from landlords who fail to conduct tenant background checks. Your business and the safety of your tenants are too important to ever skip this step.