1. The Unflinching Enforcer Mindset<\/h2>\n
A few months back I analyzed\u00a0whether you should keep your home as a rental or sell it<\/a>\u00a0when you move. The first thing I talked about? Whether you have the disposition and discipline needed to be a landlord.<\/p>\n Tenants will push against your boundaries. Your job as a landlord is to firmly and professionally defend those boundaries.<\/p>\n That means enforcing your lease agreement \u2014 to the letter.<\/p>\n Rent doesn\u2019t come in on the first? Send an unofficial late-rent reminder. Rent doesn\u2019t come in before the legally-mandated grace period ends? Send an official eviction-warning notice.<\/p>\n They still don\u2019t pay after the required waiting period? File in court for eviction.<\/p>\n You\u2019ll get sob stories, often with literal sobbing. Many people bend and give their tenants leeway \u2014 and then they give some more leeway.<\/p>\n 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?<\/p>\n Enforce your lease agreement and your tenants will know that they can\u2019t get away with whatever they want. They\u2019ll know the rent is their highest priority because you will enforce the late fee and evictions.<\/p>\n If you can\u2019t do that, you will lose all credibility with your tenants. You\u2019re better off investing your money in a REIT<\/a>.<\/p>\n Landlords have monthly, semi-annual, and annual work they should be doing.<\/p>\n 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.<\/p>\n It doesn\u2019t feel<\/em> urgent. It\u2019s not a frantic midnight phone call about a burst pipe. So, most landlords don\u2019t do it.<\/p>\n 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.<\/p>\n Check that they don\u2019t have unauthorized people or pets living there. Make sure they\u2019re keeping the property clean. Confirm that they\u2019ve changed the air filters.<\/p>\n And use that face time to build more of a relationship with your tenants: Ask about their jobs, their kids, their lives.<\/p>\n Then, every year, you need to raise the rent<\/a>. Many landlords wring their hands and fret about it, but the alternative is allowing rents to fall below market value \u2014 then hitting your tenants with a too-drastic rent hike all at once.<\/p>\n Related:<\/strong>\u00a0I Asked Landlords for Their Best Tips: Here Are 6 Recurring Secrets to Success<\/a><\/em><\/p>\n As a landlord, you\u2019re a small business owner, whether you think of yourself that way or not.<\/p>\n The expenses involved in owning a rental property are largely hidden, because they\u2019re irregular (but big when they happen). Expenses like turnovers, repairs, vacancies.<\/p>\n Here\u2019s what rental property cash flow looks like visually<\/a> \u2013 smooth periods, interrupted by huge spikes in expenses.<\/p>\n What does that all mean for you as a landlord? It means you don\u2019t want to be that chump standing there with his jaw hanging open asking: \u201cHow am I supposed to pay for this $5,000 roof bill?!\u201d<\/p>\n Here\u2019s how: by setting aside money every month for these potential expenses. In a word, by budgeting.<\/p>\n2. The Discipline to do Recurring, Scheduled Work (Even When it Doesn\u2019t \u201cFeel\u201d Necessary)<\/h2>\n
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<\/p>\n3. Budget Like a Business (Because You Are One)<\/h2>\n
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