13 Rules Great Landlords (Almost) Never Break
by Brandon Turner
1.) Always Screen
Being a landlord is like gambling. At any moment, there is a chance that your tenants are going to destroy their property … and your financial future. However, you can increase your odds by simply screening out the bad apples.
2.) Require a Security Deposit
If you are having trouble filling a unit, don’t waive the security deposit – lower the rent. The security deposit is designed to give the tenant incentive to clean up after themselves and without it… they won’t.
3.) Enforce the Due Date
A tenant will walk all over you if you don’t enforce a late fee when they pay late. You might feel like “the bad guy” but at least you won’t be the “broke guy.” Do yourself, and your tenant, a favor: charge a late fee and train the tenant to pay on time.
4.) Never Rent Out a Dirty Unit
Don’t be a slumlord. Come on, people.
5.) Turnover Units Quickly
Vacancy sucks – because you are not getting any rent. A broken toilet or water heater may cost you a few hundred bucks… but an empty unit can cost you thousands. Get your maintenance people in and out quick to minimize turnover costs.
6.) Treat Tenants with Dignity
There is a difference between authority and value. As a landlord and the owner of a property, you have the authority to make the rules. However, your value is no different than theirs. Keep this in mind and treat your tenants with the same dignity you treat everyone else.
7.) Stay Current with the Accounting
Oh, how easy it is to get behind on the paperwork. However, as most business owners know … this can be a death sentence if you let it get behind. Set aside a few hours every month to carefully document your spending, income, and other aspects of your business. Your future self will thank you (and be wealthier because of it.)
8.) Plan Ahead for Expensive Fixes
You are crazy if you don’t plan ahead for expensive repairs and problems. They are going to happen. The water heater will go out. The carpet will need to be replaced. The parking lot will need to be re-paved. Be sure to set aside money each month for this!
9.) Keep Your Business and Home Life Separate
If you allow your business life to bleed too much into your personal life, you are always going to be stressed. Don’t let your tenants come to your house to pay rent. Don’t leave your family dinner to take care of a tenant who got locked out. Keep it separate, and treasure your home life.
10.) Document Everything
As you grow wealthier through real estate investing, you become a target for law suits. Often times – the winner of a law suit simply comes down to “who was the most organized.” So document everything you can, especially problems, to make sure you are covered in case anything happens.
11.) Hire a Professional
There are a lot of people who claim to know how to fix things. However, don’t just hire your friend’s neighbor’s cousin because it’s convenient. It may be easy, but it won’t be easy to clean up their mistakes and failures later on. Hire the right person for the right job.
12.) Plan for Property Management
Whether or not you plan to manage yourself is irrelevant. When you invest in real estate, always calculate your numbers as if you were going to use property management. After all, when you grow … you will no longer be able to manage yourself, and if you don’t have property management factored into your numbers, you won’t be able to afford them when you need it. If you do plan to manage yourself – great… but pay yourself what you would pay someone else. I’ll say it again: always calculate your numbers as if you were going to use property management.
13.) Create Systems
Finally, always think of ways you can streamline your business to run smoother. By creating systems, you allow yourself to grow and prosper without getting bogged down in the day-to-day stuff. It’s not bad to be a part of that system, but make sure you are a “replaceable” part for optimum flexibility in the future.
Conclusion
As I said before, following the rules is important.
These rules have been tested and proven to work by millions of landlords who have come before, so don’t fall victim to the easily-avoidable problems.
Stick to the rules, and you’ll become the great landlord you want to be.
Did I miss any? Let me know below in the comments!
13 Rules Great Landlords (Almost) Never Break by Brandon Turner
