I’m perhaps the world’s biggest procrastinator.
I mean… seriously, why do today what you can put off ’til next week?
However, this procrastination habit hurts my business, and I’m intent upon fixing it before something bad happens! Therefore, I wrote this post today for myself, to help me remember that I need to stay on top of these things and hopefully help some of you in the process.
Without further ado, I give you:
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11 Things Landlords Should Be Doing Every Year… But Probably Aren’t
1. Renew the Lease
Unless you purposefully rent month to month, it’s wise to re-up your tenants onto another year long lease. In most states, an annual lease will revert to a month-to-month lease if you don’t renew the lease each year.
One bonus tip: If you are renting a unit during the winter, only sign a 6 or 9 month lease to begin with, so the renewal date will end in the summer, when units are easier to get filled; then renew with a one year lease after that.
2. Verify Market Rent and Be Sure You Are Up to Par
The rental market is fluid and, as such, the market rent is bound to change. Each year, you should verify that all your rents are close to what the market will bear, or you could be throwing your good money out the window.
3. Smoke Alarm/Carbon Monoxide Inspections
As I mentioned on last week’s Podcast (Episode 99), I recently did a smoke alarm check at my apartment complex and found almost 70 defective or missing smoke detectors. SEVENTY! I hadn’t checked in many years, and over time, it appears, it’s easier for a tenant to simply throw away a smoke detector when it starts beeping than put a new battery in it. Crazy.
Do yourself a favor and check for smoke alarms each year. And if you are in a state (like mine, Washington) that requires carbon monoxide detectors in all units, be sure to do that as well.
4. Check for Water Leaks
In the inspection I just had done on my apartment complex, we also discovered numerous water leaks that are probably costing me $500 or more each month! Faucet drips, toilets running, etc. Water is not cheap in my area, and outside of my mortgage, water is my greatest expense. So be sure to check every year (or more often) for any potential water leaks and get them fixed promptly. Remember: tenants don’t always report leaks and other problems because they don’t want to rock the boat.
5. Make Sure Your Keys Work
Tenants change their locks for a number of reasons. However, as a landlord it’s important that you have a working key for all your properties, so you gain access if you need it and the tenant is not home (legally, of course). There is nothing more frustrating than having a maintenance person (who you are paying by the hour) show up to do work, and the key you gave them doesn’t work. So check the keys once a year, and verify you have the correct one.
6. Check Your Insurance Rates
Insurance is a funny industry. They get you to switch with super low rates; then, for no real reason start raising your rates. No wonder every single insurance company claims “users who switch save an average of $hundreds of dollars by switching to us!). For that reason, it’s wise to shop around for better rates at least once a year.
That said, switching insurance companies can be a nightmare sometimes, so only switch if you will be getting significant enough savings or improving your coverage considerably.
7. Get Updated Contact and Emergency Contact Info
I don’t know about your tenants, but mine seem to get new phone numbers every week. This is why it’s important to double check all your contact information annually, so you always have the best contact number for your tenant. While verifying their phone number, also get their email address and emergency contact information as well, just to be safe.
8. Change Furnace Filters (or Verify Your Tenant is)
Furnace filters need to be changed often, and although it’s likely the tenant’s responsibility, they probably aren’t doing it. Therefore, it’s YOUR responsibility as the landlord to verify that this is being done.
9. Clean The Gutters
If there are trees located near your rental property, likely your gutters will need to be cleared at least once per year. If you don’t feel comfortable doing this yourself, hire a professional — it’s not too expensive. Keeping the water flowing the way you want it to flow is fundamental in keeping your property in the best shape for the longest time possible.
10. Renew Your Rental License
Many areas require your rental property to be registered or have a license, and this usually needs to be done every year. In some areas of the country, if you fail to register, your tenant can actually get rewarded monetarily. Yes, that means you’ll end up paying your tenant!
11. Thank Your Tenants
Finally, don’t forget that tenants are the lifeblood to your business. Therefore, be sure to do something nice for your tenants at least once a year to let them know you care about them. This could be as simple as a Christmas card or a phone call thanking them for renting from you and wishing them a great year. Being the holiday season, now is the perfect time to do that, so if you haven’t ordered your Christmas cards yet, do it today.
One of the biggest killers of cash flow is tenant vacancy, so by appreciating your tenants, you’ll find tenants that stay longer and are more pleasant to work with the rest of the year.
I know you are busy — I am as well! However, being a landlord has certain responsibilities if you are going to build a solid, long-lasting business, and this list should help you get you on track.
But now it’s your turn… what am I missing?
Leave your comments below, and let me know what other tasks a landlord should do at least once a year!
(Special thanks to Darren Sager for his help on this post!)