There are many ways to profit from residential and commercial properties. One of the more popular ways of doing so is by renting out your properties and earning rent. This makes you a landlord to your tenants. While it can be nice to earn and this comes with certain responsibilities and obligations to your tenants. Here’s what you should expect if you plan on becoming a landlord.
Roles of a Landlord
A landlord does more than just collect rent; they have many roles they are responsible for. They’re the ones who advertise the rental property, show potential tenants the area, screen the tenants to make sure they can’t pay and won’t cause trouble with your other tenants or neighbors, negotiate, and then leases the property to them.
Tenants are not responsible for major repairs, so if your tenant reports a problem with the property, it’s your job to either clean or repair it yourself or find someone who can. If you own a property like an apartment complex or an office building, it’s your job to keep the shared spaces clean and well-maintained.
Landlords must also deal with more difficult tasks. If a neighbor or another tenant complains about one of your tenants, it’s your responsibility to approach that tenant and advise them to stop bothering their neighbors. And if the worst comes to head, you’ll be the one responsible evicting a bad tenant, sometimes requiring law enforcement or legal means to remove them from your property.
Traits of a Good Landlord
With 48.5 million rental properties across the United States, would-be tenants often have their pick of which property they want to live in or establish their business. Being an effective landlord means having the right qualities to attract people to rent their property, establish order, and ideally keep all your rental properties occupied to maximize the rent you’re getting every month. A few of these qualities include:
- Assertiveness. You don’t necessarily have to be aggressive, but you need to know how to put your foot down with tenants who are disturbing their neighbors or late with rent. A person who cannot assert themselves and are easily swayed by others will find it difficult to be landlords.
- Understanding. While it’s your tenant’s responsibility to pay rent on time, you also need to recognize that some tenants can have a good reason for being late on the rent once or twice. Don’t let this become a habit for them, but make room for leniency when the situation calls for it.
- Open Communication. A tenant can have an emergency repair any time of the day. They won’t expect you to be awake or on-call in the middle of the night, but during business hours, it’s important to respond to their communication as soon as possible.
- Timely. A good landlord understands that damaged rental property can affect their tenant’s daily living. Leaky plumbing can add to their utility bill, while some may find difficulty living in their property at night while light fixtures are broken.
- Professionalism. Despite tough situations like complaints or evictions, a landlord must stay professional about all situations. A tenant can be emotional because the property is their roof over their head, so they may get aggressive about certain things. However, it’s important to remain professional as being a landlord is simply a business and you have to deal with the problems with a clear and objective mindset.
If All Else Fails, Hire a Property Manager
If renting seems like a lucrative investment for you, but you don’t think you’re fit or just don’t want to do the work of a landlord, the simplest option is to hire a property manager or a property management company to do the work for you.
Property managers are basically the middle-man who, for a fee or a percentage of the rent, will handle all the responsibilities of being the landlord. You still own the property, get most of the income from it, and may still be responsible for certain tasks of owning the property, but you won’t be responsible for the daily operations and handling tenants.
Renting out property seems like a lucrative investment that, when done right, can be a steady source of income. However, getting tenants, maximizing your properties, and collecting rent is easier said than done. There are many landlord responsibilities that can be very difficult to do if you don’t have the right qualities and aren’t willing to work hard.
If the job description seems tiring or you feel like you don’t have the qualities necessary in an effective landlord, consider hiring a person or a company to step in as a property manager. You won’t get the full rent amount from your properties, but at least you get the ease of running rental properties hands-off while still enjoying a steady income flow from your rent.