A lot of real estate investors veer away from property management. Instead of dealing with the hassles of finding and managing renters, they simply unload the property in its entirety. While this may be the easy way out, renting out a property is often the better way to capitalize on your investment, especially in certain markets.
Managing tenants can be a costly, time consuming, and tiring endeavor if you don’t take the necessary precautions. But when you find and are able keep the right tenants, your investment pays big-time. Here are five steps you can take to ensure that the process goes smoothly, and that business keeps booming.
1. Screen your tenants. Nothing is more important in renting than to find good, quality tenants. To do this, be sure to screen possible candidates as thoroughly as possible. Background criminal checks, followups with all previous landlords, and credit checks are your best bet.
2. Educate your tenants. It’s up to you to make sure that your tenants know the rules inside and out before moving in. Spend a little extra time in the beginning to go over expectations, and it will save you a lot of time and energy down the road.
3. Offer a quality rental. You want to give tenants a home that they can be proud of and will want to maintain. Make sure that the home shows nicely and little things, like overgrown grass or unpolished fixtures have been addressed. This sets the standard for tenants and will encourage them to keep the home in good condition.
4. Offer incentives. Successful landlords are able to make tenants want to stay. Do this by offering reliable services (such as timely repairs), and periodic extra incentives. For example, you can send tenants a $25 Home Depot gift card as a holiday gift, which makes them feel appreciated and encourages them to spend money on your home. Similarly, a simple welcome letter or first-month phone call to check in can help build rapport between landlords and tenants.
5. Always check in. Be proactive about the property and treat renting with a business mindset. When speaking with tenants, be sure to ask if everything is OK, and stop by the property regularly (with advanced notice) to keep up the home and monitor it’s condition. In addition, it’s important to be consistent and reliable in order to stay on top of things. Always return calls, and be upfront with problems. For example, if the tenant is late sending rent, they will get the idea that it’s serious if they immediately receive a 7 day letter.
As a landlord, keeping up with your responsibilities in a timely way will benefit everyone, and make tenants more likely to stay. So be reliable, be effective, and be available to tenants as much as possible. And remember to keep a strong business mindset!