Whether you have been a landlord for a while or are just getting started, it can be stressful to figure out how to become the most successful landlord possible. If you’re not sure how to reach your fullest potential in this field, we’re here to help. Our founder, Jimmy, has been a landlord for two decades. We asked him for his top 5 tips for success, which we arranged into this short-and-sweet guide to becoming the most successful landlord that you can be.
What are the qualities of a successful landlord?
According to Jimmy, successful landlords always have the following qualities, which all ensure that both the landlord and the renter get the most out of their shared experience. This, in turn, leads to a better investment and fuller career for the landlord.
1 – Be accessible
The successful landlord is always accessible for their tenants. If you are managing the property yourself, it is incredibly important that you can respond quickly to the tenant’s needs. Some issues are not urgent, like a broken ceiling fan or a cabinet door that needs to be adjusted, but other issues may need to be handled immediately, such as a running toilet or an HVAC going out on the hottest day of the year. Regardless of the urgency, problems with the property are your responsibility to handle as quickly as you can.
Most tenants understand that things break, and they also understand that it may take time to get repairs done. However, if you always take a day or two to even respond to their requests, tenants will probably get irritated because they rely on you to handle property-related issues. This leads to number 2.
2 – Always communicate
Communication is key for a successful landlord. You tenants should always feel like they are being heard, and they need to know that they can reach you if they ever need to. If a tenant contacts you about an issue, make sure to acknowledge their request and keep the tenant in the loop about the progress you are making towards resolving their problem. Even a quick text message makes everything easier on both parties. This way, the tenant knows that they haven’t been left in the lurch, and they know how to prepare if there are workers or technicians coming to the property to make repairs. You’ll find that tenants are always more understanding when they know that you are actively working to resolve their problem.
3 – Handle preventative maintenance
Successful landlords always keep their properties in good shape. Repairs are inevitable for any property, but preventative maintenance helps ensure that tenants don’t find themselves in a run-down place in constant need of work. For example, if you know the property’s roof is at the end of its life, replace it before it leaks and causes more issues. Staying on top of these details will keep your property value up, save you money in the long run, and attract the best tenants, which leads us to number 4.
4 – Find good tenants
A hard fact to swallow as a landlord is that some tenants are much easier to work with than others. Good tenants are always responsible: they take care of your properties and pay their rent on time. Bad tenants, on the other hand, might not be respectful towards your property or the neighbors of that property. The best rental can become the worst rental if you have bad tenants.
Because of this, successful landlords do their due diligence and screen their tenants. Be careful during this process: it is extremely important that you review potential tenants objectively and respectfully, and that you always remain within your legal rights. There are a lot of questions that would be both illegal and unethical for a landlord to ask potential tenants, such as inquiries about race, ethnicity, religion, or marital status, among other things; it is never acceptable for a landlord to discriminate against potential tenants based on these criteria.
5 – Be fair but firm
A successful landlord is always fair, but never a pushover. The lease agreement is a contract between the landlord and the tenant, and the terms of the contact should be followed by both parties. It is your responsibility as the landlord to not only look after the state of the property, but also to ensure that your tenant is holding up their end of the agreement. You especially need to make sure that you are getting paid rent when you are supposed to be. If rent is due on the 1st of the month, then that is when it is due. If the rent payment is late, then you need to enforce the late fee agreed upon in the contract.
Obviously, there are exceptions to this rule. If a tenant has paid on time for 12 months, but something comes up that prevents them from paying the next month, you might consider giving them a one-time pass on the late fee. Sometimes you have to use your judgement to make sure that you are being as fair as possible while still maintaining your own professional boundaries.
Some extra information
If you follow the steps above, you have all of the major stepping stones to becoming a successful landlord in terms of your relationships with your tenants, but you should also be aware of the financial aspects of the job to get the fullest picture possible.
How do landlords make money?
Ideally, landlords make money from both recurring monthly revenue and property appreciation. If you buy your properties right, you can begin to generate monthly cash flow immediately because you will easily find tenants. As the property appreciates, you will then gain the increased equity in the property. Also, as time goes on, your rental rates will naturally increase with current market rates, which will further increase your monthly cash flow.
How much money to do landlords make yearly?
Because of the many variables at play, it’s impossible to say how much the average landlord makes yearly, simply because there is no measurement for an “average landlord.” Landlords can invest in real estate full time, or they can simply use real estate to supplement their income. Either way, a landlord’s income also depends on what kind of properties they rent and what kind of lease agreements they have.
Regardless of these variables, as long as you have a financial plan that accounts for rent, expected vacancies, and possible expenses, and as long as you focus closely on your finances, you can be sure to maximize your returns.
We Buy Houses In West Georgia is a local house-buying company that purchases homes as-is in cash. We have 20 years of experience in the real estate business as buyers, flippers, sellers, and landlords. If you are interested in selling a property in the West Georgia area, we invite you to learn more about how our process works, or to fill out the form below to get your no-obligation cash offer. We would love to work with you!