How to Be a Landlord: Top 12 Tips for Success
[Note from the editor: Dealing with tenants is kind of like knitting (stay with me here): It requires a lot of learning, some people will have no idea why you’re spending your time doing it, and it’s a lot easier if you have an expert around to help you avoid a big, tangled mess. This article was published a few years ago, and since then, we’ve grown significantly. We’re republishing these tips (plus two new ones!) today in hopes of helping out a few more landlords learning the ropes. Please leave your comments below!]
Sometimes I don’t like tenants.
OK, that’s a lie. A lot of times I don’t like tenants. I’m sure individually those tenants are decent people. However, as a whole, I don’t always like tenants.
When I first wanted to enter real estate investing, I heard time and time again all the reasons why landlording is a terrible idea. I’m sure you’ve heard them, too:
- The tenant won’t pay rent
- The tenant will trash your house
- The tenant will make you go bankrupt
- The tenant will make you clean toilets at 2 am
- The tenant will drive you crazy
These generalizations are not unfounded. Many investors become landlords and quickly find they are overwhelmed by the amount of work it takes to manage tenants — especially in low-income areas or in multifamily properties (both which I own.) These landlords often find themselves burned out because they never learned how to be a landlord.
Over the past five years I’ve made a lot of mistakes, learned a lot of lessons, talked with a lot of other investors (both successful and not), spent a lot of time on the BiggerPockets Forums, and read an absurd amount of books. During this time I’ve learned a lot of “hacks” from these sources that have made landlording much easier to handle. I finally feel Like I know how to be a landlord – and can help others feel the same. Some of these might work wonders for you – others may not work at all. However, these are all tricks that have helped me manage dozens and dozens of properties and still love investing in real estate.
Like a new puppy or a new employee, tenants need to be trained to act the way that fits your business model. Many of your tenants are coming from a background with terrible landlords who let them do whatever they want. Unless you want the same problem – you need to train your tenant to perform the way you want.
How to Be a Landlord: Top
10 12 Tips for Success
12.) Be Smart About Rent Collection
Are you still trekking around the city collecting rents from your tenants physically? Stop! Not only is showing up at your (potentially financially strapped and therefore stressed/angry) tenants’ doors possibly dangerous, but it’s incredibly tedious, time-consuming, and inefficient!
Instead, check out alternative options, from electronic pay systems to an ACH (automated clearing house) to withdraw money from the tenant’s bank account. Get more insight from this article.
11.) Start Adding Systems NOW
You’re just a “mom and pop” landlord looking to make a little side income, right? No need to hone your methods or organize paperwork.
WRONG. If your ultimate goal is to achieve more free time and not be tied to your day job (and yes, landlording can definitely be a demanding day job), you’ll do yourself a HUGE favor to start building systems now. That way, when you’re the proud owner of 10, 20, maybe even 50 rentals down the road, you’ll be able to step away seamlessly for that early retirement — and your business will still run like a well-oiled machine.
P.S. looking for hard money loans in California? Be sure to check out my friends over at northcoastfinancialinc.com. They have very competitive rates, can fund within a week and specialize in fix and flip loans and other hard money loans.
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