Landlording & Rental Properties

5 Habits You Didn’t Know Were Essential for Landlording

Expertise: Landlording & Rental Properties, Real Estate News & Commentary, Personal Finance, Real Estate Investing Basics
120 Articles Written

There’s no such thing as landlord school.

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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.

Far too many landlords fail to bring a level of professionalism to their landlording side gigs. Sure, this can lead to some irked tenants, but the person who suffers the most is the landlord — in the form of shoddy returns.

My partner and I teach a property management course to mom-and-pop landlords. Here, we again and again return to a few simple themes. Most of these themes revolve around prevention, discipline, and staying several steps ahead of the irregular-but-expensive events that ruin returns.

Here are five habits that landlords need to develop if they want maximum profits and minimum headaches!

Related: How to Be a Landlord: Top 12 Tips for Success

1. The Unflinching Enforcer Mindset

A few months back I analyzed whether you should keep your home as a rental or sell it when you move. The first thing I talked about? Whether you have the disposition and discipline needed to be a landlord.

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.

Rent doesn’t come in on the first? Send an unofficial late-rent reminder. Rent doesn’t come in before the legally-mandated grace period ends? Send an official eviction-warning notice.

They still don’t pay after the required waiting period? File in court for eviction.

You’ll get sob stories, often with literal sobbing. Many people bend and give their tenants leeway — and then they give some more leeway.

If you do this, you train your tenants to believe that the rent is not their most urgent bill. So why would they ever pay it on time when they have other bills they need to pay in which excuses are not an option?

Enforce your lease agreement and your tenants will know that they can’t get away with whatever they want. They’ll know the rent is their highest priority because you will enforce the late fee and evictions.

If you can’t do that, you will lose all credibility with your tenants. You’re better off investing your money in a REIT.

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.

As we discussed above, every month you need to stay on top of your tenants about rent. Set reminders on your calendar if need be. Every six months, you need to inspect your rental units. Semi-annual inspections should be written right into your lease agreement.

It doesn’t feel urgent. It’s not a frantic midnight phone call about a burst pipe. So, most landlords don’t do it.

But again, it comes down to setting expectations with your tenants. Send a loud, clear message that you care about the property, you care about the lease terms, and (if you do it right) you care about the tenants.

Check that they don’t have unauthorized people or pets living there. Make sure they’re keeping the property clean. Confirm that they’ve changed the air filters.

And use that face time to build more of a relationship with your tenants: Ask about their jobs, their kids, their lives.

Then, every year, you need to raise the rent. Many landlords wring their hands and fret about it, but the alternative is allowing rents to fall below market value — then hitting your tenants with a too-drastic rent hike all at once.

Related: I Asked Landlords for Their Best Tips: Here Are 6 Recurring Secrets to Success

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.

Here’s what rental property cash flow looks like visually – smooth periods, interrupted by huge spikes in expenses.

What does that all mean for you as a landlord? It means you don’t want to be that chump standing there with his jaw hanging open asking: “How am I supposed to pay for this $5,000 roof bill?!”

Here’s how: by setting aside money every month for these potential expenses. In a word, by budgeting.

And while we’re at it,if you ever want to retire with your rental income, budget your personal finances too. What’s the point of all the hard work building (and managing) your rental portfolio if you’re just going to turn around and spend it all on new shoes and dinners out?

If you want to get ahead, both as a landlord and as a person, get comfortable (and disciplined!) with your budgeting.

4. Think Long-Term to Vanquish Vacancies

Turnovers are where most of the work and costs involved in being a landlord lie.

You’ll have to repaint the unit. Maybe re-carpet it. 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.

Then there’s the stress and headaches and work of advertising for new tenants, coordinating with contractors, screening tenants, signing a lease agreement, doing move-in and move-out inspections, etc. It’s labor. If you have a property manager, they’ll charge you dearly for that labor.

Speaking of tenant screening, your goal is not fill the unit as quickly as possible with an acceptable tenant. Shift your thinking to the long term, and instead make it a priority to fill the unit with a high-ROI, low-maintenance, long-term tenant.

You want someone who will be low-impact and treat your property with kid gloves. Someone who will pay the rent on time every month so you don’t have to chase them. Someone who will stick around for the long haul so you don’t have to worry about all the costs and headaches involved in a turnover.

5. The Meticulous Mindset: Records, Documentation & Attention to Detail

I’m just going to say it: If you’re not the anal-retentive 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? Did you both sign the condition statement? Did you take photos with timestamps of every room from every angle?

Then what did you do with the photos and documentation? Is it stored securely on your computer or in your file folder where you can access it at a moment’s notice?

I’ll stop beating this horse; you get the idea. Active landlording is not a good fit for the laid-back and leisurely. There’s nothing wrong with hiring a property manager if you don’t have this meticulous personality type – the important thing is the self-awareness to acknowledge the bad fit and outsource your property management.

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 actually execute them!

Catching a theme here? The landlords who succeed are the ones who bring professionalism to their rental management.

And if you can’t be professional, hire a professional.

What habits have you found to be useful as a landlord?

Share your experiences below!

G. Brian Davis is a landlord, personal finance expert, and financial independence/retire early (FIRE) enthusiast whose mission is to help everyday people create enough rental income to cover their ...
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    Glenn Schworm
    Replied almost 7 years ago
    OMG, I watched that video and saw you with the shotgun and the water I was drinking shot right out of my mouth!! Too funny!! We make a lot of video’s brother and I have to tell you I thoroughly enjoyed yours, very nicely done. It was informational and hilarious. Loved the outtakes at the end…very impressed. You got mad skillz brother! 🙂 Keep up the good work. Shotgun!! I am still LMAO!!
    Brandon Turner
    Replied almost 7 years ago
    Haha thanks Glenn! Glad you liked the Shotgun scene in that video 🙂 I thought it was pretty funny!
    John Thedford
    Replied almost 7 years ago
    Thanks Brandon! I am suffering from information overload on BP! Enjoyed the video as well. I have a nice lil toy myself….about 14″ long, holds 3 rounds, and looks like something from the terminator movie LOL! It has never been used to negotiate a RE transaction:)
    Brandon Turner
    Replied almost 7 years ago
    Lol hey John, it’s easy to get overwhelmed here 🙂 I generally recommend people just start by reading through the Ultimate Beginner’s Guide to Real Estate Investing. It gives a nice overview and a sort of starting point. And nice on the “Terminator toy” 😉
    Ivan
    Replied almost 7 years ago
    Thanks for pointing me in the direction with the hard money lender directory info and the rehab cost. I can’t wait to purchase and becoming more educated on the subjects! Love the video and keep them coming.
    Brandon Turner
    Replied almost 7 years ago
    No problem, Ivan! Glad I could help. I’ll keep makin’ em if you keep watchin’ em!
    Aly W. Investor from Middletown, New Jersey
    Replied over 1 year ago
    All excellent points! Great article.
    G. Brian Davis from Baltimore, MD
    Replied over 1 year ago
    Thanks for reading and for the comment Ali!
    Christopher Smith Investor from brentwood, california
    Replied over 1 year ago
    I would agree, all very good pointsto follow. I have managers so I’m not the one doing the heavy lifting, but there is actually an aspect of each of these habits that can be applied to the managing of the managers.
    G. Brian Davis from Baltimore, MD
    Replied over 1 year ago
    Very true Christopher – even if you have a property manager, you still need to manage them effectively if you want them to perform well!
    Nathan G. Real Estate Broker from Cody, WY
    Replied over 1 year ago
    This is a great list of some key components of a successful Landlord. I’ll share it with my investor group.
    G. Brian Davis from Baltimore, MD
    Replied over 1 year ago
    Thanks for the kind words Nathan, and for passing it along!
    John Murray from Portland, Oregon
    Replied over 1 year ago
    Great article Brian! Constant learning is essential for successful landlord-tenant relationship. Tenants are not equal but can be treated fairly. I have a philosophy of staying ahead physiologically, this means zero emotion and maximum profit. When to hold and property and when to sell, always keeping the end game in mind. Always be nice to a tenant and it will pay off in the long run. The main goal is maximum profit, dealing with people is not just about numbers it about effectiveness.
    G. Brian Davis from Baltimore, MD
    Replied over 1 year ago
    Absolutely true John, it’s not all numbers, much of it is mindset and how you approach the responsibilities of being a landlord and investor!
    Frank Jones Real Estate Investor from Cullman, Alabama
    Replied over 1 year ago
    Excellent, common sense article. Owning rental properties is kinda like raising kids. Kids will push the envelope as far as they can. Tenants will too. You raise good kids and maintain good tenants by being the “adult” and enforcing the pre-determined rules in a caring but serious way. Stay ahead of the headaches or they become migraines.
    G. Brian Davis from Baltimore, MD
    Replied over 1 year ago
    You know, my partner Deni (who’s both a landlord and property manager) uses the exact same analogy!
    Andres Osorno
    Replied over 1 year ago
    Good article and insight.
    G. Brian Davis from Baltimore, MD
    Replied over 1 year ago
    Thanks Andres, much appreciated!
    Thesha Sims from Petaluma, California
    Replied over 1 year ago
    Great article – and excellent habits to cultivate! Follow a process driven approach to drive repeatable results and if you show up and follow the process, you’ll achieve what you want to achieve.
    G. Brian Davis from Baltimore, MD
    Replied over 1 year ago
    Amen Thesha!
    Ally Kumar Investor from Lutz, FL
    Replied over 1 year ago
    Great article Brian. Very useful advice. Thanks. You mentioned raising rents consistently but what if your market rents haven’t changed? I monitor the rents in the area and keep rents slightly below market when its time to renew leases to keep good tenants for long term. That works for me.
    G. Brian Davis from Baltimore, MD
    Replied over 1 year ago
    Thanks Ally, and you raise a good point that you have to stay in tune with your market rents, so you can price accordingly!
    G. Brian Davis from Baltimore, MD
    Replied over 1 year ago
    Thanks Ally, and you raise a good point that you have to stay in tune with your market rents, so you can price accordingly!
    Dave Rav from Summerville, SC
    Replied over 1 year ago
    Great post! Direct and to the point. Excellent summaries. Our hope is that all “green” landlords read your article 🙂
    G. Brian Davis from Baltimore, MD
    Replied over 1 year ago
    Thanks for reading and for the positive feedback Dave! Always nice to hear!
    Lorraine Aslan
    Replied over 1 year ago
    A fantastic read! A real eye opener! Very useful advice, thank you 😉
    G. Brian Davis from Baltimore, MD
    Replied over 1 year ago
    Thanks Lorraine, much appreciated!
    G. Brian Davis from Baltimore, MD
    Replied over 1 year ago
    Thanks Dor!
    Andrew Syrios Residential Real Estate Investor from Kansas City, MO
    Replied over 1 year ago
    Very good list Brian!
    G. Brian Davis from Baltimore, MD
    Replied over 1 year ago
    Thanks Andrew!
    Andrew Syrios Residential Real Estate Investor from Kansas City, MO
    Replied about 1 year ago
    Number 1 is key. Tenants can smell fear a mile away.
    G. Brian Davis from Baltimore, MD
    Replied about 1 year ago
    So true Andrew!
    Jennifer Hallock
    Replied about 1 year ago
    Thank you for republishing this article. There are some great points here. I am a new landlord and its makes me reconsider some of my own actions, for the future.
    G. Brian Davis from Baltimore, MD
    Replied about 1 year ago
    Glad you got something out of it Jennifer! Please don’t hesitate to reach out by direct message if there’s anything I can help with!
    Nathan R. Williams from Norfolk
    Replied about 1 year ago
    Thank you Brian!! This was immensely helpful for me as I am always spreading myself a bit too thin between the properties and not exacting any real particular habits. Great read!!
    G. Brian Davis from Baltimore, MD
    Replied about 1 year ago
    Thanks Nathan, glad it was helpful!