By Dixie Somers
When you become a landlord, stress levels can get very high. There are tenants who vandalize property, are habitually late with the rent, or just disappear without notice. In general, the good tenants outnumber the bad ones and you're able to manage your property profitably. You can cut your stress by finding ways to reduce or eliminate the many problems that go with renting. Here are some tips for making your property management experiences go smoothly.
1. Use the Internet to Collect Rent
Collecting rent from difficult tenants is one of the must stressful aspects of the business. Automating the process can make this much easier. Whether you buy an online solution pre-made or hire a developer to create it, set up a payment system that accepts credit or debit cards, or even automatic bank transfers. You can use any one of the digital payment processing services online.
This is more convenient for both you and your tenants, and provides a transaction history for bookkeeping purposes. Your solution should also have reporting features so you can see at a glance what's happening.
2. Outsource Maintenance
Anything beyond a few units can be a headache in maintenance, including painting and cleaning up after sloppy tenants. Hiring a crew to take care of this involves all the problems of recruiting and training employees, managing payroll and benefits, and other concerns. Hiring even a minimum-wage employee can cost you over $9,000 before they're up to speed.
If you don't want those additional stresses and don't really need full time help, outsource these routine maintenance tasks to another company. It may cost a little more than doing it yourself, but you'll have more free time and less anxiety.
3. Keep an Emergency Fund
Whether you opt for employees, contractors or want to do it all yourself, you're still going to pay for repairs and upkeep. Some routine maintenance you can budget for, but events such as careless tenants, storms, litigation, or burst pipes are something else. If your insurance policy won't cover it, or units are not inhabitable, you're losing money. It's best to set aside what you can from the very beginning so that one major setback doesn't cripple your cash flow.
4. Find a Property Manager
You could also pass on your landlord troubles to someone else by hiring a reputable property management company or professional. Those with special training and significant experience may be more suited to handling maintenance, budgets, and bad tenants than you are. They will definitely cost you some money, but they'll eliminate all the difficulties of being a landlord while you sit back and take the profits.
5. Tenant Screening
Better tenants means fewer missed rent payments, less property damage, and longer tenant retention.Getting good tenants requires screening each applicant to weed out those who may represent a high risk. Screening requires verifying employment, conducting background checks, checking credit scores, calling references, and anything else you consider a good indicator.
You have to careful in how you turn prospective renters down to avoid discrimination charges. Make it clear to them why they were rejected. You also don't want to be too fussy. If you reject one applicant after another you'll wind up missing out on rent. No tenant at all for months on end is going to cost you more than a bad tenant. Tenant screening is another time-consuming task that you could delegate to a professional service to manage for you.
Being a landlord has been a great source of income throughout human history. It may be a little more complicated today with all the legalities and paperwork, but it can still be profitable and rewarding if you are thoughtful in spending your time and money.