The transition from homeowner to landlord can be an arduous one. Renting a home you purchased for yourself and your family to strangers often becomes an emotional roller coaster. To compound matters, the process is frequently coupled with the need to secure replacement housing, as in the case of a military move. Handing off the rental process to a professional to lessen the stress is one reason people hire a property manager. Whether you do the same or go it alone, there are some fundamental things to understand when you become a landlord which may require a change in mindset.
- Do it right - Make sure your property is in good condition. Perform any needed maintenance and ensure you’re putting your best foot forward with prospective tenants. Why? Because well qualified tenants have options and they know it. If your position is that the property is “just a rental” to avoid doing minor maintenance items, you’ll attract tenants with a more carefree lifestyle who don’t mind if things are broken, dirty, or just don’t work. That also means they’re less likely to report problems when they occur, ignoring minor issues that could be addressed with relatively little expense until they become major problems and cost far more to correct.
- Divorce yourself emotionally – When you become a landlord, you’re running a business. It’s no longer your personal home and you cannot impose your personal standards or will on the occupants. Lifestyles vary widely, from the extreme OCD “everything in its place” tenant to the person who has no problem looking at two weeks of laundry piled on the floor. If your tenants are paying their rent as promised and not doing any physical damage to the property, ignore the other stuff for your own peace of mind.
- People are unpredictable – Jobs are lost, divorces happen, people get sick… there are always bumps in the road that will have to be dealt with when they come along. You have to take a reasonable approach to problem solving and work through issues with the least damage to yourself and the tenant. Digging in your heels and demanding rent from a tenant who lost their job is far less productive than working with them to market to replacement tenants and letting them know they’ll be off the hook as soon as new tenants take over.
- Plan for the worst – If you’re sitting by the mailbox waiting for the rent check to arrive each month so you’ll be able to pay the mortgage on your rental property, you’ve put your financial well-being in the hands of a total stranger. Most tenants pay rent like clockwork, but over time you’ll almost certainly have at least one who doesn’t make it a priority. If you can’t absorb the occasional erratic payment or a major repair expense without going into a financial tailspin, it’s time to reconsider whether being a landlord is the right choice for you.
- When in doubt, hire a professional manager – Renting property is a complex process with sections of law specific to rental business including handling of security deposits. Fair housing law plays a huge role in the rental world and the majority of fair housing actions involve rental transactions. Then there’s lead paint, mold, assistance and service animals, etc… If you’re a seasoned investor who has resources for tenant screening and a good working knowledge of landlord/tenant law, handling your own rental business might not intimidate you. In reality however, most investors hire property managers. They don’t want to deal with the 3am emergencies and the “people problems” that inevitably happen, preferring instead to let someone else deal with the headaches while they enjoy the financial and tax benefits of owning rental property.
This list is certainly not exhaustive, but should provide some food for thought to anyone considering renting property they own. If you own a rental property or are contemplating the purchase of one, out team at The Real Estate Group will be happy to show you what we have to offer for property management services. Call today! 757-512-7225 / www.TREG-PM.com