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How would you like to work 168 hours a week, never travel anywhere, and spend your days dealing with the ungrateful, entitled, lowest common denominator of public society?
OK good, me neither. So, today I want to share with you my top tips for AVOIDING that lifestyle while still owning rental properties.
That’s right. You can be a rockstar landlord without being a slumlord — and today, I want to offer six tips for doing just that.
Let’s get to it.
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1. Treat Landlording as a Business
Look, you don’t see Howard Shultz making lattes, Mark Cuban playing one-on-one with Shaq, or Donald Trump swinging a hammer.
Because these people run businesses. And if you own rental properties, you run a business too.
So start acting like it!
Take it seriously.
Build processes and systems that you can follow. Be consistent. Hire stuff out. Be organized. Know your numbers. Stop getting so emotional about everything.
It’s a business — and it’s time you started acting like it.
2. Provide a Great Home
If you want to attract weird tenants, provide a weird home.
But if you want great tenants, provide a great home. Fix the property up right before a tenant moves in. In the words of my friend and fellow landlord Darren Sager, make your home “tenant-proof” by using materials that won’t break down quickly.
Your property doesn’t need to look like Buckingham palace, but it should be clean, durable, and better than average — because that’s exactly the kind of tenant you want to attract.
3. Get to Know Your Fair Housing Laws
If you really enjoy lawsuits and paying big bucks to bad tenants, ignore this tip.
But if you want to remain legal and avoid being called a lot of terrible names in the paper, listen up.
You need to learn what your Fair Housing Laws are.
Fair Housing Laws exist on federal, state, and local levels and are designed to make sure discrimination doesn’t take place against a “protected class.”
Protected classes include race, color, religion, sex, familial status, handicap, national origin, and potentially more depending on your local laws.
While it seems pretty obvious on the surface, sometimes it can be easy to discriminate and not even notice. For example,
“Yeah, this property is on the second floor, so probably not ideal since you have a wheelchair.”
“You know, I have another property that might suit you a little better since this is a high-crime area and you are a single woman.”
“It’s a small studio apartment, so we can’t allow seven kids.”
Each of these could get you in hot water, so be sure to review your local, state, and federal Fair Housing Laws.
4. Wait — and Don’t Wait — for a Great Tenant
I know, that’s kind of a weird tip, but hear me out.
One of the best tips I ever received when I bought my first rental property was this: Wait for a great tenant. It’s better to have a property vacant longer than rent to someone who will drive you crazy or who you might have to evict.
While this is fantastic advice, I want to amend it.
Don’t just wait for a great tenant to find you. You have to go out and find them!
In other words, take your marketing efforts seriously so you have an endless supply of tenants calling to rent your property. Then pick a great tenant and move them in.
Now, speaking of finding a great tenant…
5. Take Your Tenant Screening Seriously
Tenant screening is one of the most important jobs of a landlord.
Screening is the process you go through to make sure the tenant who has applied is going to be that ideal tenant you want.
Because let’s be honest: People lie. Screening is how you verify they are telling the truth.
When screening tenants, be sure to:
- Run a background check to make sure they aren’t evil minions.
- Check their employment status and verify their income.
- Talk with their previous landlords — because how they’ve been in the past is how they’ll be in the future.
6. Train Your Tenant from Day One
No child is born knowing how to drive a car. You have to train them to be great drivers!
In the same way, you must train your tenant to be great tenants. It doesn’t come naturally to most.
Training involves two aspects:
- First, you must establish rules and guidelines up front. How do they know that blasting punk rock music at 2:00 a.m. is bad if you don’t tell them? This is why a solid lease agreement is so important.
- And second, you must enact punishment if they break the rules.
No, I’m not talking about beating your tenant with a leather whip.
I’m talking about penalties when they break the rules. If they are late on the rent, charge a late fee. If they move a pit bull into your “no pet” rental, make them give it away or face eviction.
Yes, I know it feels weird being the enforcer, but rules benefit everyone, and by being a fair but firm landlord, you’ll gain their respect and have a long-term business relationship with them.
Of course, being firm doesn’t mean you can’t be a good person. Your tenant will respect you and stay for years if you treat them with the respect they deserve. Address maintenance concerns quickly, send a card at the holidays, and follow the Golden Rule — treat tenants the way you would want to be treated.
By following these six tips, you’ll find that landlording doesn’t have to be a drag. In fact, being a landlord can be one of the most rewarding and profitable roles you can play — if you are willing to do it right.
Landlords: Any tips you’d add to this list?
Leave a comment, and let’s talk!