Dupe P:<\/strong><\/em> \u201cTreat good tenant with respect. People don’t like the hassle of moving unless it is necessary. Good experience, longer stay.\u201d<\/p>\n Amy K:<\/strong><\/em> \u201cI like to get to know my tenants. We self-manage one home and it\u2019s not really a business for us but more of a \u2018I want to hang on to this place\u2019 type of thing. I always try to visit the home and have real-life conversations with my tenant after they\u2019ve moved in. I feel like it\u2019s much easier for people to disregard landlords if they view them as an entity rather than a person.\u201d<\/p>\n Huy N:<\/strong><\/em> \u201cI literally offer my tenants candies on Christmas so that they will stay longer.\u201d<\/p>\n Theresa N:<\/strong><\/em> \u201cThe biggest expense in landlording besides capital expenses is tenant turnover. The best way to minimize tenant turnover is to give the best product at a good price point and treat tenants that have been properly screened with respect and reward programs.\u201d<\/p><\/blockquote>\n Further reading:<\/strong><\/em> 11 Ways to Boost Tenant Retention for Higher ROI<\/a>.<\/p>\n Just as you want to retain good tenants, you also need to avoid bad tenants if you want lower turnovers.<\/p>\n Joseph L:<\/strong><\/em>\u00a0The worst rookie mistake made by landlords is\u00a0“not properly screening tenants.\u201d<\/p>\n Elizabeth Colegrove<\/a> (of<\/em> Reluctant Landlord<\/a> fame):<\/strong>\u00a0A key to my success as a landlord is \u201cbackground\/credit check to make sure that I have tenants who care about their financial pictures.\u201d<\/p>\n Brett B:<\/strong><\/em> \u201cShow the unit prior to it being available. Get money lost to vacancy rate to $0.\u201d<\/p>\n Steven R:<\/strong><\/em> \u201cScreen your tenants by looking them up on the county clerk of courts database for civil lawsuits.\u201d<\/p><\/blockquote>\n Further reading:<\/strong> <\/em>7 Advanced Tenant Screening Tips<\/a>.<\/p>\n There\u2019s a niche of landlords who have success with very low-end properties. But they\u2019re exactly that: a niche.<\/p>\n The average landlord should reconsider before investing in rough neighborhoods.<\/p>\n Cary P:<\/strong><\/em> \u201cDon’t buy anything you wouldn’t want to live in. If you don’t want to live there, why would anyone else?\u201d<\/p>\n Trevor A:<\/strong><\/em> \u201cMy two long-term rentals are homes I originally bought to live in, which means they are as nice as I could afford at the time. I generally get very good tenants. There’s more profit\/higher ROI in the lower end of the spectrum, but a lot less hassle for me to be high end. It’s mostly been mailbox money and I can sit back and watch my leveraged investments make me wealthy.\u201d<\/p>\n Elizabeth Colegrove:<\/strong> <\/em>A key to my success as a landlord is \u201cGREAT Property that attracts tenants that have something to lose.\u201d<\/p><\/blockquote>\n Further reading:<\/strong><\/em> How Investors Get Burned Following the 2% Rule in Low-Income Neighborhoods<\/a>.<\/p>\n I believe there\u2019s a sweet spot for rental properties. Too low-end, and you face endless battles with renters and enforcing your lease. Too high-end, and the margins are too thin.<\/p>\n One of the things I like about Theresa\u2019s quote below is that she acknowledges that as you descend further down the income ladder, you need to make your properties sturdier to withstand more abuse, but that\u2019s not necessarily a deal-breaker.<\/p>\n Theresa N:<\/strong><\/em> \u201cAll of our property is in lower middle-class areas. If there is a recession, people from higher-end houses have someplace to fall. We make our properties aesthetically beautiful, with everything squared away. Everything works, looks fresh, and is easy to maintain. We bulletproof our houses by putting products that are at good price points but will last and stand up to tenant wear and tear. For example, we never use carpet but use a ceramic wood look tile which we get at huge discounts because of our volume. All of the products we use in our houses are exactly the same, and have been tested and refined over time. My contractors know my expectations and what a bathroom and kitchen should look like without having to ask because they’ve done it hundreds of times. Pets are never a problem, because of this. Speaking of contractors, we pay them promptly so when I call them, they come running! We screen our tenants really well and fix things within 24 hours if possible.\u201d<\/p><\/blockquote>\n Further reading:<\/strong><\/em> Tenant-Proof: How to Make Your Rentals Indestructible<\/a>.<\/p>\n We stress this over and over with our students: Your lease is not just another formality to sign and have done with. It should be thoughtfully designed to protect both your property from physical damage and you from legal liability.<\/p>\n And, of course, just having a thorough, protective lease agreement isn\u2019t enough. You need to actually enforce it, both firmly and professionally.<\/p>\n Amy K:<\/strong><\/em> \u201cWe have a tight lease and I stick to it. Much as I expect them to abide by it, I do as well.\u201d<\/p>\n Elizabeth Colegrove:<\/strong><\/em>\u00a0A key to my success as a landlord is a \u201ckick A$$ lease that sets the standards, expectations, and fines if they break it. And holding their tush to it all!\u201d<\/p><\/blockquote>\n Further reading:<\/strong><\/em> 17 Vital Rules Your Rental Lease Should Cover<\/a>.<\/p>\n Another way you can design your lease to your advantage is to build in incentives for good behavior and penalties for bad behavior.<\/p>\n Wallace G:<\/strong> <\/em>I charge a \u201c20% service charge on cleaning and damage costs taken from the security deposit.\u201d<\/p>\n Matt R:<\/strong> \u201cI add $100 to monthly lease… and give $100 discount for early rent payment (by the 3rd<\/sup>). Been doing this for 15 years, and it works!\u201d<\/p><\/blockquote>\n![\"\"](\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2013\/09\/landlord-lessons.jpg\" "\\"\\"")
<\/p>\n2. Screen tenants aggressively & minimize vacancies.<\/h3>\n
3. Don\u2019t invest too low-end.<\/h3>\n
4. But don\u2019t invest too high-end, either.<\/h3>\n
5. Enforce your (protective!) lease.<\/h3>\n
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<\/p>\n6. Incentivize good behavior.<\/h3>\n
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