Good Lord: A beginner’s guide to being a good landlord.
So you’ve decided to rent out one of your properties and you want to make sure you’re doing everything right. That’s great! And the good news is: you’ve already started on the first step.
Do your research
Once you’ve had a little practice, you’ll find that renting out your property is pretty simple. However, if you don’t do your research into things like how to screen potential tenants or how to set a good rental rate, it could end up costing you. For example, did you realise you should be setting aside 10% of each rental payment for repairs.
How to check for make sure your tenant is a good fit
Some people like to say “you never know who’s going to end up being a nightmare tenant”. Sure, sometimes people who look good on paper can surprise you with bad behaviour, but generally you can screen tenants out by doing the following:
1. Make sure their monthly income is three-times the cost of their monthly rent.
2. Perform a credit and background check.
3. Ask for references from previous landlords: and make sure you call them to verify they’re real.
4. Check if a tenant has any past evictions, and investigate into the reason why things went wrong.
5. Check their social media. If they’re hosting wild parties with outdoor wrestling matches, you may want to consider someone different.
How to keep a good tenant:
Seeing as you’ve just started, you’ve never experienced a bad tenant before, so you don’t know the value of a good tenant. A good tenant will keep the stress levels of property management to a minimal amount and will work with you to help make sure the property is well maintained (which will pay off for you in the long run). And seeing as we don’t want you to find out how much money, time and stress a bad tenant will cost you, here’s our advice: if you get a good tenant, treat them well and keep the relationship friendly but professional:
- Show your appreciation by sending a gift hamper during the holiday season or leave some chocolates and bottle of wine after rent inspections. Small gestures can go a long way.
- When a tenant tells you about an emergency issue, get it repaired ASAP. If you’ve ever been in a rental property with a broken hot water system, you’ll know how fast thing can go from “I’ll just call the landlord” to “My landlord is the worst”.
- When there is a general repair that need to be made, have it fixed promptly. This will let the tenant know you are dedicated to keeping the property in good running order and hopefully prevent and larger issues from arising that could cost you money in the future.
- It’s understandable to get a bit anxious when leasing out your home – it’s a big investment and, if you previously lived in it, you may be quite attached. But take a deep breath and a step back to avoid being an overbearing landlord. Just remember: they’re paying for that space, so give them their space.
If your tenant calls, write down the date, time and subject of the call. If your tenant emails you, save it in a folder. If you and your tenant have a conversation and discuss something related to the house, make a note of it. This benefits your tenant because it will keep you from forgetting anything you may need to action; and it benefits you, because if your tenant ever accuses you of doing something (or not doing something, as the case may be), you’ll have a record you can refer to.
Also, you may want to consider copying anything you write into an email and sending it to yourself. This way you’ll always have a digital copy if you lose your notepad. Also, your emails have the date and time on them, should you need to provide a timeline of events.
Consider a property manager.
Sometimes renting out a home can be a difficult experience. If you’re conflict averse and experience anxiety at the thought of asking a person to start paying their rent on time or keeping the yard clean, you should think about getting a property manager to look after your property. This way you can still be earning the extra income from the property while the agency looks after any issues that may arise.