What Type Of Landlord Are You?
There are several types of landlords.
Some are proactive, taking matters into their own hands, others like to have layers between them and their tenants. Still others can be intrusive, treating their prior home like it is still a homeowner dwelling, not a rental. Check out the types of landlords listed below and determine where you fit. Is this where you want to be?
The Newly Made Investor
This landlord purchases a new home, and decides to make her old home into a rental. Great decision! But stop! Unless you get professional assistance, you can make some costly mistakes!
- Let go of the emotional attachment you have for your home. It is now a rental property. Treat it as such.
- If you must rent to friends, and we discourage this, put distance between you and your renters. Get a management company involved.
- Your money should go towards maintaining the property and keeping the tenant safe and comfortable. Anything else is throwing money away.
- Leave your tenant alone! This is now their home, not yours. Stick to quarterly or bi-yearly inspections to check the status of the property
This landlord hires the cheapest manager he can find, then requests a reduction or concession. He undermines the manager at every turn, introducing himself to the tenant and telling the tenant to call him if there are any problems. He handles his own repairs, but on his schedule.
- Treat your managers with respect and courtesy. Make them happy to answer when you call.
- Leave the tenant relationship to the manager. Don't create a "he said, she said" situation.
- If handling your own repairs, do so respectfully, timely and professionally. Keep to the issue at hand and refuse to discuss rent, or other management issues with the tenant. Refer them back to management. That's what you pay for.
This landlord researches management companies, makes her decision and relinquishes all responsibility for the rental, preferring to pay a management company to take on the headaches of chasing rent, handling repairs, making the tenant feel welcome without approving every requested maintenance, and dealing with the occasional eviction.
- Respond to management. If they have learned you are hands-off, they are only going to bother you about important matters.
- Respond timely. Approve reasonable repair requests quickly.
- Assume that if management refuses a repair, they are looking out for your bottom line.
- Avoid contact with the tenant. If you trust your management company, then trust your management company.
The Overly Cost-Conscious
This owner searches for the most inexpensive management company and then questions everything. He never responds to repair estimates or wants two to three bids for each job in an effort to save a few bucks.
- Treat your management staff how you want to be treated.
- Respond to staff calls and emails promptly. The quicker things get resolved, the happier your tenant will be.
- Approve or deny repairs promptly. Don't leave your tenant hanging.
- Assume your management company has established relationships with vendors and know how to get the best deal. Don't prolong repairs and create more costs by demanding multiple estimates. (However, on higher cost jobs, a 2nd estimate can be helpful).
- If your property is not renting, despite being fully advertised, with good pictures and descriptions, lower the rent. Better to lose $50 in monthly rental income for 12 months ($600), than $1000 in monthly rent while the property sits vacant.
The bottom line in rental property is: "The Bottom Line", aka your income stream and expenses. Do yourself a favor, investigate management companies, find one that you can trust, then let them do their job.