Many people are getting into the rental housing market as an investment, hoping to make more money in rent than they owe on their properties.
There are nearly 44 million renter-occupied homes throughout the United States, and they account for about 37% of the housing market, according to the U.S. Census Bureau. Yet, while collecting checks and watching your investment grow sounds glamorous, a rental property can be a lot of work.
What does it take to be a successful landlord? Below is some advice for landlords to help forge good relationships with their tenants.
Keep the property in great condition
It’s cheaper to keep tenants than to lose them, so it’s important to maintain a good relationship. Keep the property in good shape with fresh paint and carpeting, stay up-to-date on repairs and lawn maintenance, handle noise complaints and respect your tenants’ privacy. If your property has a feature that requires specialized maintenance, such as a pool, have a trusted company perform it instead of leaving it up to your renters. This keeps your asset in good condition and is easier on both you and your tenants.
Giving tenants options can also help you build a positive relationship with them. For example, you might consider offering a rent discount each month if your tenants agree to maintain the home’s landscaping themselves during rent negotiations.
Maintain appropriate boundaries
Be aware of your state’s landlord-tenant laws, too, to ensure your tenants get the privacy they’re entitled to. In many areas, you’re required to give 24 hours’ or two days’ notice to enter the occupied rental property, except in case of an emergency. Give this type of notice in writing and verify with your tenants verbally to ensure there aren’t any surprises.
Provide thoughtful extras
Keeping tenants happy can involve providing them with some thoughtful extras that make them feel welcome in the home and help convey the idea that you’re a fair person who’s grateful to have them renting your property.
For example, when they first move in, give them a packet of items that make it easier for them to make rent payments. Give them deposit slips, address labels and envelopes that they can use to transfer the funds directly or mail you their checks. Or, set up an online payment portal that lets them pay securely at the click of a button. You might also consider offering an incentive if they decide to renew their lease, such as a free house cleaning from an outside company. This also maintains the home, making it a little easier to clean when the tenants do eventually move out.
Set a fair price
Compare your rental home to others in the area to create a fair price for rent. Set a monthly date for rent payments and include a late payment policy. Many landlords give tenants a five-day grace period to deliver the rent. After that, they may apply penalties for every day the rent is late.
Expect unexpected repairs
As a landlord, you’ll be responsible for repairs that can cut into your profits. Expect to allocate 10% of your rental income for repairs.
Aside from money, repairs may also be required at inconvenient times. Expect to handle your share of 3 a.m. phone calls about issues such as leaking pipes, lack of heat or storm damage. Field these calls patiently and efficiently, and let your tenants know that you’ll be available to help whenever you’re needed.
Encourage tenants to get renters insurance
Some tenants believe their belongings are covered under the landlord’s insurance policy, but that’s not the case. For example, if a fire damages the belongings inside, the tenants aren’t covered unless they have their own renters insurance policy. Many companies offers affordable, comprehensive renters insurance to assist your tenants.
With these landlord tips, you’ll know what to expect, and you’ll be able to form respectful relationships with your tenants for years to come.