I didn’t set out to be a landlord, but many years ago I inherited a small, 4 unit apartment building. Some people—who’ve never been landlords—believe it’s an easy way to make money. Trust me, it isn’t. Since I had no formal training in property management, the advice I’m offering is based what I’ve learned over the years. If you’re thinking of becoming a landlord, here are 6 tips for newbie landlords.
1 .Never rent to a tenant who can’t pass a credit check, or a background check done by an apartment owners association. Usually, this information will cost you about $25, but that is covered by the application fee. I am amazed at landlords who will rent to the first person who shows up. It’s tempting during a bad rental season to take on someone you know nothing about. Don’t do it. You will end up with damaged property, court costs, lost rents, etc.
2. Always have the tenant sign a lease. Lease forms are readily available on the internet and cover many important issues like renter’s insurance. You must make it clear you are not responsible for their personal property in the event of fire or other disaster. Also, a signed lease is critical if you have to evict a tenant for non-compliance with the lease agreement. The judge will want to see your lease before ordering the tenant to vacate the property.
If you are ever tempted to rent to someone without screening them, repeat this mantra over and over in your head: A bad tenant is worse than no tenant.
3. If you rent to students, avoid dealing with parents. If a student is old enough to live alone, they’re mature enough to handle their own affairs. Parents—especially mothers—will pick your property to death and have unrealistic expectations as to what you should provide for a modestly priced rental unit. To parents who complain about what I’m offering, I simply say, “this is rental property; it’s not the Hilton Garden Inn.” That usually settles the issue one way or another. And once the student has moved in, I refuse to talk to the parent about their child, citing privacy laws.
4. Make repairs promptly. If something is broken, fix it immediately. Don’t let a leaky pipe ruin the ceiling downstairs. If someone’s stove or frig stops working, get them a new one right away. Ignoring the problem will cost you much more in the long run. .
5. . Do not tolerate rudeness. Many tenants who move to town from big cities, especially, are demanding and confrontational. They’re convinced you’re trying to cheat them. If they have a complaint and get nasty , remain calm. Develop a thick skin, and ignore their insulting remarks. Do your best to resolve the issue at the time, but don’t renew their lease. And before you return their deposit, make sure they haven’t tried to camouflage damages.
6. Don’t advertise a rental unit in the newspaper. Use a free online website such as Craigslist to show pictures, contact information, and monthly rent cost.
Property management is not for the faint of heart. Many people have tried it and given up because they can’t take the hassles, and end up losing money.
If you decide you’re up for rental property, you should have a financial cushion to get through bad rental seasons, winter vacancies broken furnaces and leaky roofs.
On the plus side, I’ve had many delightful young tenants, some of whom rented for a few years before buying a house or finishing their college degrees. I’ve tried to be a caring, honest landlord with reasonable rents. and have seen many tenants through bad times.