Being a landlord doesn’t have to be a drag. In fact, when you manage your rental properties effectively and efficiently, landlording can actually be a great source of income while your wealth grows inside your rental units. Follow these thirteen tips to make your landlording headaches disappear!
1. Commit to taking your landlording seriously.
Landlording is the business of protecting and growing a real estate investment through the careful placement and oversight of tenants. All the work to acquire rental properties means nothing if you don’t manage correctly because great landlording is how you protect that investment from failure and how you help it grow to become more valuable each passing year.
Landlording is not for everyone; it’s for the special few who are willing to take up the mantle of responsibility in an effort to make a brighter financial future for themselves and their family. It’s for those willing to work hard, think creatively, and accomplish dozens of different, changing tasks. Does that describe you? Are you willing to do the work needed to preserve and grow your investments? Have you fully committed to the success of your landlording business?
2. Run your business like a business.
Landlording success is not a mystery. Those who succeed at landlording do so because they treat their business like a business, not a hobby. But it’s not enough to simply run a business; after all, most businesses fail. Successful business owners set themselves apart with their commitment to eight specific principles:
Business owners create systems and repeatable processes that help them build a “machine” that runs smoothly.
They continuously improve their business, looking for small and large ways to tweak their operation to make more profit while simplifying the tasks that need to be accomplished.
They are firm but fair when dealing with their customers and clients.
Business owners outsource and delegate tasks in their business that others can do with better results, focusing on the tasks that only they can do to grow their business.
They maintain strict financial control over their company, knowing at all times how much money is going in and how much is going out, and they are able to document every penny.
They focus on customer service, knowing that their business relies heavily on their reputation.
Successful business owners maintain a solid understanding of the rules and laws that govern their industry, always seeking to work within the law to create the best business possible.
And finally, successful business owners ask for help when needed, knowing that they don’t have every answer in the book but are willing to seek knowledge from other business owners and through books, podcasts, and other educational sources.
As you read that above list, ask yourself this question: Does your landlording business look like this? Do you follow those eight principles? Are you prepared to treat your landlording business like a world-class business?
3. Prepare your business before signing your first lease.
Before you sign your first lease, you must build a solid foundation for your landlording business. By using asset protection, buying proper insurance, and setting up a bank account, you are able to keep your investment secure no matter what life (or a tenant) throws at you. By preparing documents and creating a policy binder, you’ll “get your house in order” before accepting rent and dealing with questions from tenants, leading to a more simplified landlording business.
Getting to know the neighbors can help you keep a physical eye on your investments, while great bookkeeping will help you keep a financial eye on the same. Additionally, making sure your property is in the right condition to rent will be key to attracting the best tenants, so don’t skimp on the condition. Finally, before renting out a property, you must determine the best rent to charge to maximize your profit but minimize your vacancy. All of these steps can be done before you open the doors for business and will help ensure a positive experience right from the start.