There’s no such thing as landlord school.
Most landlords just do a little reading online and dive right in. Which is fine – but it also means many new landlords are ill-prepared for the work of being a successful landlord.
Here are five habits that landlords need to develop if they want maximum profits and minimum headaches!
1. The unflinching enforcer mindset
Tenants will push against your boundaries. Your job as a landlord is to firmly and professionally defend those boundaries.
That means enforcing your lease agreement — to the letter.
The lease agreement was willing signed by both sides, so there is no shame in making sure that it is followed. This means that if rent doesn’t come in as scheduled, you need to follow up with an unofficial late-rent reminder to let the tenant know there is no leeway when it comes to rent payments.
If it’s not enforced, you will lose credibility with the tenants and it will likely happen again. This never works out for any party.
It also means that if the tenant tries to exercise a right that has been agreed in the agreement, you have to allow it regardless of how inconvenient it might be.
2. The discipline to do recurring, scheduled work (even when it doesn’t “feel” necessary)
Landlords have monthly, semi-annual, and annual work they should be doing.
It is very easy to fall into procrastination and skimp on performing necessary property management tasks unless it’s very urgent. However, if you don’t perform regular inspections and repairs, you are not only letting your property fall into disrepair but are sending a message to the tenants that you don’t care much about the property.
If you the landlord doesn’t care about it, why should they?
3. Budget like a business (because you are one)
As a landlord, you’re a small business owner, whether you think of yourself that way or not.
The expenses involved in owning a rental property are largely hidden, because they’re irregular (but big when they happen). Expenses like turnovers, repairs, vacancies.
Set aside money every month for these potential expenses. In a word, budget. Don’t go paint the town red whenever the rent comes in each month. Budget it, and make sure that you are making allocations for those big expenses so you are not caught off guard.
4. Think long-term to vanquish vacancies
Turnovers are where most of the work and costs involved in being a landlord are.
Maybe you’ll have to repaint the unit. Do a deep-clean. You’ll have to go through and fix all the little things that the outgoing tenants either messed up or just lived with. Then there’s the lost rent, even as you continue carrying the costs of owning the property.
In other words, you have to spend money that you wouldn’t have had to if the tenants had stayed. It’s better to think long-term and optimise tenant screening for longevity, while conducting regular maintenance on the property as mentioned so they are more likely to stay.
5. The meticulous mindset: records, documentation & attention to detail
I’m just going to say it: If you’re not the attentive type, hire someone to manage your rentals who is.
You need to be exacting in your record keeping, your documentation, and your attention to detail. For example, did you walk through the unit before your renters moved in to document the condition with them? Do you have a detailed inventory? Do you have photos with timestamps of every room from every angle?
You’re in business — be professional
Effective landlords have effective habits, that revolve around thinking long-term and embracing minor headaches today to avoid massive headaches tomorrow.
Keep a friendly but professional distance from your tenants; they’re your clients. Set a budget for expenses like you’re a professional, because you are. Set recurring reminders on your professional calendar, and then follow through to actually execute them!
And if you don’t want to be professional, hire a professional and give us a call.
Sam Lee is a marketing manager and property consultant at JML Property. JML was established in 1994 and offers Investment Property & Homes. It specializes in managing properties for owners and investors, and providing attractive and comfortable homes for tenants.