By Than Merrill
Today’s rental market is ripe with opportunity, and the best buy-and-hold investors are reaping incredible rewards. It is worth noting, however, that the most prolific rental property investors aren’t merely those with the best physical real estate assets. While a great property in a great location is paramount to the success of a rental property, there’s one more piece to the puzzle that can’t be ignored: being a good landlord. Regardless of how nice a property is, it’s never going to realize its full potential without someone who exhibits the qualities of a great landlord. At the very least, a good landlord will take a great property and make it even better. Therein lies the true potential of a rental property: when a good property is run by a great landlord, the potential is limitless in today’s market.
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The qualities of a great landlord are nothing if not invaluable. After all, it’s the greatest landlords that know how to bring out the best in a property. However, many great qualities are subjective at best. What one landlord deems invaluable to their management skills, another may find useless. Likewise, there are many qualities landlords have that may increase their chances of realizing success, but there are at least five qualities that appear in more landlords than any other.
If you commit to running the property yourself, you need to be available when needed. There is nothing that gets tenants angrier than not being able to reach their landlord. Regardless of how great your tenants may be, there will always be issues with the property from time to time. Most of these are small in nature, but that doesn’t mean they should be ignored. If the washing machine breaks you need to get it fixed as quickly as possible. At minimum, you need to return calls, texts or emails within 36 hours. Even if you are not able to fix the problem right away, you still need to be able to communicate with your tenants. What may seem like a small issue to you can be of great importance to them. Every time you ignore a tenant, you increase the chance that they will sour on you and the property. This can lead to them treating the property abusively and neglecting to tell you of circumstances that might lead to future problems.
Small issues usually lead to big problems. The best landlords have an ability to sense things early on. Tenants that are a few days late on rent could indicate that they might face bigger issues later on that may lead to eviction. As soon as a problem arises, get to the root of it. This is not only the case with tenants, but also with everything else associated with the property. A clogged toilet may just be a clogged toilet but also could be a sign of a sewer backup. Good landlords are willing to pay for preventive maintenance to avoid long term issues. They also never put a band-aid on a property that needs fixing. You may be able to get away with this for a few months but eventually the issue will come up again. The earlier you sense and deal with problems the smaller they become. Good landlords have a way of doing this.
As a landlord you need to strike a balance between firm and fair. There are times when you may need to loosen up from a hard line stance you have taken. In doing this however, you cannot compromise your core values. If you don’t allow smoking or pets in the property, and they break the rules, there must be consequences for their transgressions. The minute you allow your tenants to break the rules, you can bet they are going to do it again. Their defense will be that since you allowed it once they thought the policy may have changed. While you may not think that breaking a rule is a big deal, it can have an impact down the road. Smoking and some pets can leave a stench in the property that will reduce the interest as well. Good landlords take time to think about what they want on the lease and what the penalties will be. Once something is on the lease they will enforce it.
Having the ability to fix small repairs in the property is a plus. For every landlord that can fix a leaking faucet, there are two that cannot. If you are not handy, you need to have a rolodex of people that are. There are a handful of tasks that need to be updated with a rental property from time to time. Everything from maintenance of the furnace to removing snow from the driveway needs to be done from time to time. It is often too late to start making calls after there is a problem. Good landlords are always building their contact list and have two or three people they can call at any time. You never want to scramble around looking for people when you need them. Not only will this drive you crazy, it will end up costing you more as well.
The best landlords understand that everything starts with their tenants. You can have a great rental property but if your tenants are lack quality, it won’t make a difference. Getting good tenants isn’t a matter of luck. Of course there is always a small degree of luck involved, but you can greatly reduce your risk with how well you screen. By taking the extra time before the lease starts, you can give yourself the best chance for success during it. There are many landlords who commit to the first interested party. The current tenant gives them the name of someone and they jump before they even do their homework. Nothing can derail a landlord quicker than a bad tenant. Every interested tenant must be screened in the same manner. Start with an application and follow up with any references listed. As difficult as a bad tenant is, a good tenant will make your life that much easier. Take the time to get to know your tenants before you commit to anyone.
Today’s higher home values have increased the demand for available rental unites across the country. However, many landlords are less concerned with the volume of applicants they are receiving, and more concerned with the quality of tenants they will house. Not surprisingly, landlords want to find tenants that will simultaneously treat their properties with respect and pay rent on time. By complying with Fair Housing laws, taking advantage of online advertising, creating a specific tenant screening criteria, and checking potential tenants’ credit scores, landlords will surely find renters who meet their needs.
Nearly every investor will have their own opinion on the qualities of a great landlord, but there are some characteristics that simply can’t be disputed. Landlords who exhibit the five qualities listed above stand to separate themselves from the competition, and perhaps even increase their cash flow. Again, it’s not merely a good property that will bring in the profits, but also a great manager. The person running the property is directly responsible for the tenants’ experience, and their approach can make or break even the best real estate asset’s performance.