What Was the Biggest Lesson You Learned As a First Time Landlord?

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What Was the Biggest Lesson You Learned As a First Time Landlord?

James Carr

Columbia, MO · Member since 2016 · 14 posts · 13 votes

Title says it all. Curious to hear what the lessons you all learned after your first year of landlording.

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Greg M.

Rental Property Investor · Los Angeles, CA · Member since 2017 · 2k+ posts · 5k+ votes

1) Better to have a vacant unit than a bad tenant. A vacant unit will rent soon enough. A bad tenant will not leave soon enough.

2) Enforce your lease. Be fair, caring, and understanding, but be firm.

3) Everyone has a pet. Accept pets and price it into the lease and security deposit. Otherwise the pet magically appears as an ESA.

4) The answer is 'no' and it is not debatable. My place, my rules, and you are free to leave at any time if you don't like that.

5) Put EVERYTHING in the lease. No matter how dumb you think it is, there is someone that dumb out there.

6) Children are demons that will destroy the place. Similar to sex offender registries, we need child registries that details their bad behavior.

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Theresa HarrisPro Member
Member since 2019 · 15k+ posts · 11k+ votes
3y
Biggest thing is to treat it like a business. This doesn't mean you can't give a tenant a day or two grace on paying rent in emergencies, but you need to learn that 'no' is an appropriate answer sometimes.
13 Reply
Stephanie Gledhill
Huntington Beach, CA · Member since 2019 · 49 posts · 21 votes
3y
I marketed my property before it was vacant and the tenant complained about many “issues” on my 1 year old property. For example, a stain on the shower pan. Next time, I would either 1) market it after vacancy, however, vacancy will be longer or 2) accept the deposit prior to vacancy but make sure expectations are reasonable. Any recommendations are welcome.
1 Reply
Alonzo Moreland
Parkville, MD · Member since 2017 · 22 posts · 19 votes
3y
The biggest thing I learned as a first-time landlord is that I have to be willing to say, "no" and conduct thorough background checks before renting to anyone. No visible means of adequate income, bad credit, evictions in their background should mean no renting from you.
8 Reply
James Carr
OP
Columbia, MO · Member since 2016 · 14 posts · 13 votes
3y
Quote from @Alonzo Moreland:

The biggest thing I learned as a first-time landlord is that I have to be willing to say, "no" and conduct thorough background checks before renting to anyone. No visible means of adequate income, bad credit, evictions in their background should mean no renting from you.

Yep this was a lesson we learned as well. Our first tenants were recommendations from a niece attending college in the area, we rented to them direct with no background check or anything and they did quite well.
Next tenant was also a referral and we sidestepped doing a background check, getting one of them to pay has been a real pain and they are consistently a month behind on rent.
0 Reply
Eliott Elias
Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
3y
Do not give tenants your personal number.
14 Reply
James Carr
OP
Columbia, MO · Member since 2016 · 14 posts · 13 votes
3y
One lesson we learned is when relying on a handyman to perform repairs and work on units as needed to have the process for work requests outlines crystal clear and outline what work would be covered by the landlord or tenant.
We had a guy we used that did a great job for the most part, out of the blue got a bill from him because a tenant called and asked if he could install a light fixture for them and replace the battery in a fire alarm. Was a bit of a nuisance because it wasn't exactly work that we requested or approved. After that, we updated our tenant agreements and policies for work requests on units.
5 Reply
James Carr
OP
Columbia, MO · Member since 2016 · 14 posts · 13 votes
3y
Quote from @Eliott Elias:

Do not give tenants your personal number.

Got any advice on how to handle? Thought about setting up twilio for that to relay messages.
0 Reply
Eliott Elias
Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
3y
Quote from @James Carr:

Quote from @Eliott Elias:

Do not give tenants your personal number.

Got any advice on how to handle? Thought about setting up twilio for that to relay messages.
Email
0 Reply
Mark F.
Rental Property Investor · Northern NJ · Member since 2019 · 672 posts · 677 votes
3y
Acknowledging and fixing legitimate issues quickly, even by just communicating with the tenant, goes a long way. My tenants appreciate it and pay it back in kind. The bar is very low for landlords. Ive rented before where property managers can take weeks just to respond back to an issue. Differentiating yourself from a slumlord helps. I know not every tenant cares but most are normal people who want a clean place to stay. We come here to complain about the other 5%.

Increasing rents small amounts (1% to 5%) is not that big of a deal. Even larger amounts on below market rents hasnt been an issue, yet. Years ago when I did it for the first time, I was so nervous. The tenants seem to expect them due to rising property taxes and insurance.
6 Reply
Nathan GesnerBusiness Member
Moderator
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
3y
Do regular inspections, at least once a year and more often for Tenants that are higher risk.
The DIY Landlord Book4.7248 Reviews
Website View Page
7 Reply
Jay ThomasPro Member
Real Estate Agent · Houston, TX · Member since 2021 · 1k+ posts · 715 votes
3y
As a landlord, you should set clear expectations and maintain firm boundaries. Although it is important to be understanding of tenants' needs during difficult times, it is also necessary to ensure that your rules are respected in order for the tenancy to run smoothly. Setting boundaries will help create a healthy dynamic between both parties and make sure that responsibilities are met on either side. Ultimately, the key is to treat renting like a business – with fairness for all involved. That way, everyone will benefit from the agreement!
[email protected]832-889-5607
3 Reply
Rick BassettBusiness Member
Property Manager · Greater New Haven, CT · Member since 2010 · 377 posts · 434 votes
3y
Quote from @Eliott Elias:

Do not give tenants your personal number.
Agree, now we have a main company number that tenants & prospective tenants get, and my direct number doesn't go to anyone that I don't want to have it. Our system defaults to the company number for all outbound calls and texts so my direct # doesn't get exposed.
475-900-3100
Bassett Property Management5108 Reviews
Website View Page
1 Reply
Jeff S.
Specialist · Portland, OR · Member since 2010 · 3k+ posts · 1k+ votes
3y
@James Carr Good credit counts if you don't want drama. When starting out be frugal and let your tenants know you are that way.
0 Reply
Crystal S.
Rental Property Investor · Pompano Beach · Member since 2022 · 8 posts · 15 votes
3y
Maybe put each property in a separate LLC ?
I know of a Billionaire that does this for all his developments. I thought it was mega smart. I’m not a landlord YET but I will be. I plan on putting my properties in separate LLCs in case of any legal issues.
1 Reply
Account Closed
Member since 2021 · 240 posts · 300 votes
3y
$400 over PITI is not $400 cash flow
10 Reply
Rick BassettBusiness Member
Property Manager · Greater New Haven, CT · Member since 2010 · 377 posts · 434 votes
3y
Biggest lesson...never rent to family members -and- never take real estate advice from family members who don't invest in real estate
475-900-3100
Bassett Property Management5108 Reviews
Website View Page
15 Reply
Ned J.Pro Member
Investor · Manteca, CA · Member since 2017 · 1k+ posts · 2k+ votes
3y
Run it like a business, not a hobby.... be respectful of tenants but take the emotion out of any decisions
The $$ above the PITI is not really your "cash flow"......calculate your cash flow after you factor in the expenses that WILL happen.... not IF.... but when.
3 Reply
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
3y
Quote from @Crystal S.:

Maybe put each property in a separate LLC ?
I know of a Billionaire that does this for all his developments. I thought it was mega smart. I’m not a landlord YET but I will be. I plan on putting my properties in separate LLCs in case of any legal issues.

they put it under LLC because yes, they're billionaires :)
1 Reply
Greg M.
Rental Property Investor · Los Angeles, CA · Member since 2017 · 2k+ posts · 5k+ votes
3y
1) Better to have a vacant unit than a bad tenant. A vacant unit will rent soon enough. A bad tenant will not leave soon enough.
2) Enforce your lease. Be fair, caring, and understanding, but be firm.
3) Everyone has a pet. Accept pets and price it into the lease and security deposit. Otherwise the pet magically appears as an ESA.
4) The answer is 'no' and it is not debatable. My place, my rules, and you are free to leave at any time if you don't like that.
5) Put EVERYTHING in the lease. No matter how dumb you think it is, there is someone that dumb out there.
6) Children are demons that will destroy the place. Similar to sex offender registries, we need child registries that details their bad behavior.
19 Reply
Allan Smith
Contractor · Nashville, TN · Member since 2014 · 1k+ posts · 1k+ votes
3y
Biggest Thing for me was following my set procedures every time you have to stick to them and be firm with tenants. Late fee on the 6th. Eviction notice by the 10th. Detainer warrant by the 20th every time. Never has bending the rules benefitted me.
also, screw long tenant stories about why they cant pay rent and whatever else. Gah. Such a waste of time.
6 Reply
Bud Gaffney
Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes
3y
@James Carr to take emotion out of it! Always business.
1 Reply
Linda S.
Investor · Richmond, VA · Member since 2016 · 1k+ posts · 2k+ votes
3y
@James Carr,
Expect the worse in people, every now and then someone will surprise you for the good--- but as a new landlord--your rose colored glasses will get really foggy really, really quickly when reality hits. Being a landlord makes you jaded, and if you don't feel that way, you haven't been a landlord long enough.
1 Reply
Chris Stonestreet
Member since 2019 · 42 posts · 26 votes
3y
Quote from @Theresa Harris:

Biggest thing is to treat it like a business. This doesn't mean you can't give a tenant a day or two grace on paying rent in emergencies, but you need to learn that 'no' is an appropriate answer sometimes.

I want to emphasize this!!! Treat it like a business!!! I learned the hard way very early on with my first tenant. I truly think he's a nice person so I have a hard time not showing grace. However, my grace has definitely been taken advantage of. Needing to pay a day late turned into needing to pay a week late, which turned in to needing to pay two weeks late. I finally got firm and said the due date is the due date and anything after will be assessed a late fee. The bank will not accept your payment late without a fee so you should not accept anything less from your tenant.
2 Reply
Polo VazquezPro Member
Real Estate Agent · McAllen, TX · Member since 2017 · 382 posts · 281 votes
3y
Quote from @James Carr:

Quote from @Eliott Elias:

Do not give tenants your personal number.

Got any advice on how to handle? Thought about setting up twilio for that to relay messages.

Get a phone number from google voice.

My biggest learning expercience was that raising rents every year is an absolute must! Even if it not much, you have to do it. If you don't, property taxes, insurance, and rising maintenance cost will catch up to you and leave you losing money every year. Rising costs is so subtle that you won't even notice until it's too late. Also, when it comes time to do a cash out refinance, if you haven't been raising rents you won't be able to pull much cash out without leaving you with negative rents.
3 Reply
Paul Z.
Member since 2020 · 65 posts · 13 votes
3y
Quote from @Polo Vazquez:

Quote from @James Carr:

Quote from @Eliott Elias:

Do not give tenants your personal number.

Got any advice on how to handle? Thought about setting up twilio for that to relay messages.

Get a phone number from google voice.

My biggest learning expercience was that raising rents every year is an absolute must! Even if it not much, you have to do it. If you don't, property taxes, insurance, and rising maintenance cost will catch up to you and leave you losing money every year. Rising costs is so subtle that you won't even notice until it's too late. Also, when it comes time to do a cash out refinance, if you haven't been raising rents you won't be able to pull much cash out without leaving you with negative rents.

Not raising rents will also make the property less attractive when you want to sell it to an investor.
2 Reply

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