With Baltimore’s booming economy, it opens a lot of opportunities for businesses to expand, creating more employment opportunities for people not only in Baltimore but also for people living in nearby cities. With this sudden increase in demand, it’s a good opportunity to start transforming your home or start a rental property business.
You’ll now become a landlord the moment you’ll start renting space to other people, called tenants. While in an ideal situation you want your tenants to be good payers, it is always not the case. There will always be those tenants that will cause you a headache at the end of the month. You can minimize these stresses and become a successful landlord by following these awesome tips on becoming a successful landlord by Brandon Turner in an article at HuffPost.
5 Easy Tips for Being a Successful Landlord
Image Source: HuffPost
This may come off sounding a little harsh, but I believe the vast majority of landlords out there are absolutely terrible.
I’m not just referring to the way they treat their tenants, though that is a problem as well. I’m talking about the way they run their business. I believe being a landlord gets a bad reputation largely from those who fall into this “terrible landlord” group, but in reality — being a landlord is not an impossible task and success can be found.
The following are five tips for being a successful landlord, most learned through mistakes I’ve made in my own landlording journey. If you have any additional tips, I invite you to share them in the comments below the post!
1.) Treat Your Business Like a Business
As I mentioned earlier, many landlords do a terrible job at running their business and I believe this is largely because they don’t see their business as a business. In other words, they treat their investing like a hobby. However, when you treat your landlording with the respect, systems, and organization that you would treat any other business venture, amazing things can happen.
For example, when is the last time you read a great book on business leadership? Or, what systems do you have in place so maintenance concerns can be fixed without your direct involvement (in case you happen to go on vacation the day a water supply line breaks!?)
When you shift your perspective as a landlord from “hobbyist” to “business owner” — and treat your company as such – you will find far greater success.
2.) Screen Out the Bad Apples
Perhaps the biggest mistake landlords make is letting in the wrong person. This can lead to late rent, trashed homes, and costly evictions.
This ties well with number 1, because people treat their business like a hobby and refuse to follow even simple due diligence on the people who will be living in their properties. What would a bank say if you walked in, completely unqualified with no income and a 450 credit score, and asked for a large loan? A bank doesn’t run on emotion, and you shouldn’t either. So screen like your business depends on it — because it does.
Be careful not to screen out tenants based on any of the
protected classes
, or you could find yourself in a lawsuit or sitting in a jail cell.
For the step by step process I use to screen tenants, check out the most in-depth post I’ve ever written, Tenant Screening: The Ultimate Guide.
3.) Treat Your Tenants with Respect
Look — we don’t have to like our tenants.
In fact, I flat-out despise several of mine.
However, don’t allow personal feelings to get in the way of a business relationship (see #1.) Tenants want to be treated fairly and be seen as an equal human, because they are (no matter your personal feelings toward them.)
Just because you own some rental property doesn’t make you a better person — so don’t act like it.
Treat each tenant with dignity and respect and it will come back to you in success. See full post here…
For landlords, the best way to find good paying tenants is to carefully screen them. Based on experience by several landlords, the biggest mistakes they have made is not thoroughly screening and letting in the wrong person. Evicting tenants can also be costly at times.
Becoming a successful landlord entails a lot of questioning, screenings, and other important characteristics every landlord must have. It must be part of your landlord principles according to Brandon Turner in his article at Forbes.com
13 Principles For Being An Incredible Landlord
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Being a landlord doesn’t have to be a drag. In fact, when you manager your rental properties effectively and efficiently, landlording can actually be a great source of income while your wealth grows inside your rental units. Follow these thirteen tips to make your landlording headaches disappear!
1. Commit to taking your landlording seriously.
Landlording is the business of protecting and growing a real estate investment through the careful placement and oversight of tenants. All the work to acquire rental properties means nothing if you don’t manage correctly—because great landlording is how you protect that investment from failure and how you help it grow to become more valuable each passing year.
Landlording is not for everyone; it’s for the special few who are willing to take up the mantle of responsibility in an effort to make a brighter financial future for themselves and their family. It’s for those willing to work hard, think creatively, and accomplish dozens of different, changing tasks. Does that describe you? Are you willing to do the work needed to preserve and grow your investments? Have you fully committed to the success of your landlording business?
2. Run your business like a business.
Landlording success is not a mystery. Those who succeed at landlording do so because they treat their business like a business, not a hobby. But it’s not enough to simply run a business; after all, most businesses fail. Successful business owners set themselves apart with their commitment to eight specific principles:
Business owners create systems and repeatable processes that help them build a “machine” that runs smoothly.
They continuously improve their business, looking for small and large ways to tweak their operation to make more profit while simplifying the tasks that need to be accomplished.
They are firm but fair when dealing with their customers and clients.
Business owners outsource and delegate tasks in their business that others can do with better results, focusing on the tasks that only they can do to grow their business.
They maintain strict financial control over their company, knowing at all times how much money is going in and how much is going out, and they are able to document every penny.
They focus on customer service, knowing that their business relies heavily on their reputation.
Successful business owners maintain a solid understanding of the rules and laws that govern their industry, always seeking to work within the law to create the best business possible.
And finally, successful business owners ask for help when needed, knowing that they don’t have every answer in the book but are willing to seek knowledge from other business owners and through books, podcasts, and other educational sources.
As you read that above list, ask yourself this question: Does your landlording business look like this? Do you follow those eight principles? Are you prepared to treat your landlording business like a world-class business?
3. Prepare your business before signing your first lease.
Before you sign your first lease, you must build a solid foundation for your landlording business. By using asset protection, buying proper insurance, and setting up a bank account, you are able to keep your investment secure no matter what life (or a tenant) throws at you. By preparing documents and creating a policy binder, you’ll “get your house in order” before accepting rent and dealing with questions from tenants, leading to a more simplified landlording business. Click here to read the rest of this post…
If you want to become a successful landlord, you need to be very firm with your life principles. Renting your property to several tenants is a good source of income, but could also a good source of a headache if not managed properly. Stay on the right track with your principles and follow the tips from the experts.
The ultimate goal is to stay away from stress following the tips by Larry Alton in BiggerPockets on how to keep stress low when landlording.
Low-Stress Landlording—Yes, It’s Possible!
If you’re looking for a job that’s stress-free, your best bet might be to find a gig where you crunch numbers in a cubicle and don’t have to deal with people. But heads up, jobs like that can get old quickly.
Landlording is pretty far on the other end of the spectrum. It’s definitely not a stress-free job, but it doesn’t have to be overwhelming.
If you understand what stresses you out and develop a plan for mitigating those factors, you can carve out a successful career as a real estate investor/landlord—and genuinely love what you do!
Major Causes of Stress
Your personality and other situational factors will dictate the level of stress you experience as a landlord. If you’re anything like most people, you’re likely to be impacted by the following:
Poor cash flow. Nothing is more stressful than dealing with cash flow problems and wondering if you’ll be able to pay the mortgage, taxes, and bills to keep the property above water.
Late payments. One of the biggest frustrations landlords have with tenants is late and/or irregular payments. Not only does it impact cash flow, but it also causes the landlord to waste time and energy tracking the money down.
Legal issues. Real estate can be complicated. If you aren’t careful, you could end up in legal trouble for even the simplest of mistakes or oversights.
Careless tenants. Bad tenants have a tendency to be irresponsible with a property, causing damage or problems that stick around long after they’re gone.
These are the hot button issues for most landlords. Being able to pinpoint them and wrap your mind around why they stress you out is a good starting point toward resolution.
4 Tips for Overcoming Stress
Once you know what stresses you out, you can develop a proactive plan for overcoming these issues and finding peace.
1. Hire a Property Manager
“There are certain relationships in life that function best when there is a third party go-between to separate the emotions and eliminate the pitfalls that can occur when two parties work directly with one another,” explains Green Residential, a Houston-based property management company. “The relationship between a landlord and a tenant is one of these relationships.”
If you want to avoid some of the friction that comes with interacting directly with tenants, hire a property manager. It’s usually worth every penny.
2. Carefully Screen Tenants
Good tenants equal stress-free landlording. If you want the rest of your experience to go well, it all starts with the screening process.
“Screening your tenant means looking into the information they provided, as well as analyzing outside information you can discover, and coming to a reasonable estimate on the kind of tenant they will be,” veteran RE investor Brandon Turner explained in his step-by-step tenant screening guide. “I say ‘reasonable estimate’ because there are no surefire ways to know the future quality of a tenant. As a landlord—it is our job to simply screen effectively and choose the best possible applicant for the property.”
Turner looks for six specific qualities in a tenant: ability to afford the rent payment, willingness to pay on time, job stability, cleanliness and housekeeping skills, aversion to drugs and criminal activity, and a low stress quotient (how much stress they’ll cause you). See full post here…
Becoming a landlord is an exciting and profitable job, but can also be very stressful if not being extra cautious with your tenants. There are tenants that are very difficult to deal with, does not pay monthly dues on time and a whole lot more problems. The bottomline here is you must also do your job. Treat your property as a business. Screen your tenants carefully to avoid problems and become a stress-free landlord.
However, if you don’t have the time to manage a rental property or become a landlord and decided to sell your house to raise capital on your next business venture, we at Dependable Homebuyers can help you sell your house fast. Want to learn more how? Visit our website https://www.dependablehomebuyers.com to get started.
Dependable Homebuyers
1402 Belt St, Baltimore, MD 21230
(443) 266-6247
