Taking Care of Your Investment Property
Landlord. The term brings up associations of greed, callousness and a lack of ethics. The news headlines often paint an ugly picture of property owners turned landlords. It doesn’t have to be that way, though. As a landlord, you can maintain a healthy balance between taking care of your property, keeping your tenants happy and making a profit.
Take Care of your Property
Your property is an investment, and one that won’t continue to appreciate if you don’t take proper care of it. You need to make sure you charge enough rent to keep up the condition of your property – inside and out. Keep an eye on your property and ask yourself if you would want to live there, and if you would pay the amount of rent you are charging. If you wouldn’t want to, perhaps no one else would, either.
Tenants will go out of their way to lessen their wear and tear on your property if you keep it in good condition. If the paint is peeling off your building and you mow the lawn twice per summer, they’re not really going to care if they put a dent in the dishwasher or break the lock on the bathroom door.
Develop a long-term schedule of maintenance and let your tenants know about it. They’ll appreciate knowing you’re taking care of the building and it’s always good for them to know when workmen will be in and around the building.
Take Care of your Tenants
While you can’t be a push-over, you can be kind to your tenants. Stopping by to make sure things are going okay a month after your new tenants move in is a nice touch that won’t cost you anything. You can be warm and personable while maintaining a professional relationship with them.
The two things tenants look for in an ethical landlord are that you don’t raise rents dramatically or without warning, and you keep your property in good working order.
When tenants claim landlords are “making too much” they often don’t take into account all the expenses a landlord has. Planned maintenance, emergency repairs, landscaping, property taxes, appliance replacement and, if necessary, animal control are all expenses that most tenants don’t factor into their calculations. They see how much they pay for rent and compare that to how much the building would sell for and decide whether they are paying too much.
One of the ways to keep your tenants happy with the rent they pay and with any future increases you may make is to talk about where some of the money they pay goes. You certainly don’t want to open your books to them, but discussing the new appliances you just installed in the apartments or the fact that you just brought the building up to a new code can help them realize where your (or, in the minds of a tenant, their) money is going.
Reference our article, “Educating Tenants About Your Rental Property” for more tips on how to develop a healthy relationship with your tenants.
Keep an Eye on your Profits
At the end of the day, you are a landlord to make money. Being a landlord is not as easy as most tenants think. You do much more than sit back and collect rent checks. You work hard for the money you make with your investment property and you should not feel bad about this.
There are many reasons landlords are entitled to profit. First of all, you put your own money down to purchase the property. Most property owners save at a much higher rate than the people they rent to. This discipline comes with the reward of rental income.
You also took the risk to buy and rent the property. There are three risks landlords take: assuming the mortgage, spending too much on the property and renting to poor tenants. Profit compensates the landlord for this risk. Renters assume no risk and correspondingly, make no profit.
When you do need to raise your rents, give your tenants as much notice as possible. They, like you, have a budget and may need a bit of time to juggle their finances in order to meet the higher payment. The rental experience becomes much more enjoyable for everyone when you two work together.
We’ve recently shared 5 exclusive real estate guides that you can download for free on the Badass Real Estate Professionals group on Facebook. Come take a look and grow your business to the next level!