Top Tips For D-I-Y Landlord To Be Successful With Real Estate Investing.
Managing your rental property as a D-I-Y (Do-It-Yourself) landlord is something that hundreds of thousands of folks do on a daily basis. From what we’ve seen, however, a very small portion of them actually do it well. What we want to do in this article is go over the top 6 items you should be doing to ensure your property is running full steam ahead. Let’s jump in!
Tip 1: Keep Lines Of Communication Open 24/7/365
As kids growing up one of the first things we learn is the importance of communicating effectively. This encompasses being an efficient speaker, and an even better listener. The old saying goes that we have 2 ears and 1 mouth so we listen twice as much as we speak! Haha! This holds true to your rental property as well. Issues will arise on a daily basis from your tenants, vendors, suppliers, city officials, insurance agents, lender, and more. So, it’s essential that you stay on top of your game. Your cell phone and email should be checked at least twice a day for correspondences that may have come in. For example, just because it’s Friday night and you’ve had a long week doesn’t mean you can shut down your phone and disappear for the whole weekend. Because, something can happen! A toilet can clog, a payment can be missed, an appointment could be blown off, and so on! Be attentive, be alert, and be available. If you keep the channels of communication flowing you will be successful. Silence is deadly!
Tip 2: Keep The Relationship More Professional Than Personal
Many landlords that we’ve taken over management for have established very personal relationships with tenants in hopes that the ‘good grace’ will carry them to success and make their life easier. In my experience, however, it does quite the opposite. When you have a personal connection to someone they tend to expect a higher level of service, and also, want exceptions/customizations to be made for them. For example, if you are friendly with a tenant they may pressure you to waive a late fee, or give them an extra week on payment because there car broke down, or bank was closed, etc. They will come up with believable stories in hopes that you will take the bait. If the relationship is professional based on the other hand it becomes increasingly difficult for a tenant to lean on the ‘friendship’ if there was never one established. Our saying here at Nexus is to be ‘fair, but firm’. Friendly is good, but not friendship!
Tip 3: Never Accept Cash Payments!
The old saying goes “cash is king”, right? Well, not in this business. Cash is deadly! The reasons are endless. The most notable being the fact that the payments you receive in cash are unable to be effectively/efficiently documented. If a tenant hands you a stack of twenty dollar bills you can potentially miscount it or lose it. Also, a tenant could say “Oh, I gave you $1100, not $1000.”. Then, you are in a he-said-she-said discussion that will likely not end up well. In today’s day and age there are so many online payment sources from PayPal, to Venmo, and even Cozy. Use one, they are typically free and deposit the funds into your bank within a day or so. On top of that you don’t have to drive to meet the tenant at all hours of the day and week!
Tip 4: Handle Maintenance Without Delay
This is one of the biggest areas we see property owners slack on. They look at maintenance as a loss because it costs money. But, the way a champion looks at it is an opportunity to improve the property, help the tenant, and show your dedication/commitment to handling issues promptly. If you delay or neglect maintenance the tenant will be very weary to report future issues, and only lead to a smaller problem perhaps becoming a bigger one. In addition, this is your asset, your retirement, and your children’s college fund. Do you really want to damage that? It’s like not taking care of your own body, why would you abuse something so precious? Take care of issues
quickly and efficiently! You will be the winner in the long run, trust me!
Tip 5: Screen Your Tenants Properly
When you search for a new tenant it’s imperative that you perform some type of background check to ensure that they can qualify for your rental. Some owners still use their ‘gut feeling’ and a one time meeting with the potential tenant to help determine the credibility and reliability. This is an absolute no-no. You want to screen them online with one of the many background screening report tools, and also verify their income with a paystub or W2. From there you will have a clearer picture as to who they are and if they would be a good fit for your property. From there, once you have approved an applicant you MUST get a lease signed by them. Feel free to use our complimentary lease generator by clicking here! Use facts to make your decisions, not emotions!
Tip 6: Don’t Make Enemies
This tip here is one that’s more abstract in nature, but still 100% applicable towards your success or failure. What I mean by this is to ensure you keep all relationships above board as much as humanly possible. This means that you want to keep a good rapport with all tenants (even if you’re evicting them), all inspectors, city officials, vendors, lawyers, neighbors, and beyond. If you create enemies you will be creating problems alongside that. The way we look at it is being friendly costs nothing, but being an enemy costs money. Choose wisely!
We would love to hear your feedback on this topic! Post a comment below so we can start a discussion!
Gregory Rice is the Vice President of franchise sales for Nexus Property Management®.
Nexus Property Management® is a National Property Management Franchise that manages all types of rental property from single family homes or condos to large apartment buildings and complexes.
Your Property, MANAGED®
The Real Estate Investing Authority®
Connecting You To Better Living®
You Could Own A Nexus Property Management® Office For Less Than You Think!