Benjamin Franklin had it right when he said, “An ounce of prevention is worth a pound of cure.” Getting ahead of problems is one of the best choices you can make as a landlord.
Being proactive when it comes to dealing with tenants is a powerful way to help maintain the value of your property investment portfolio! Here are some tips and tricks to include in your “ounce of prevention.”
1. Don’t Be Your Tenant’s Friend
A good friendship is a union of two forgivers, according to Ruth Bell Graham. In a business transaction, there are certain actions that need to be “unforgivable.” When you cultivate a friendship with a tenant in Midlothian, they may expect you to let some things go that you simply can’t afford to overlook.
You need to stay professional and impartial. Despite the personal nature of providing a home for a tenant, in the end, it is a business relationship. Here are some tips to make sure things stay cordial but professional:
- Only answer texts and calls during certain hours: Be available, but don’t let tenants feel they have the right to invade your private time.
- Don’t "hang out" with tenants: It’s fine to bring by a welcome pie or have discussions while doing yard work, but there’s no need to bond with your tenants.
- Don’t share personal information with tenants: Discussing news events and local goings-on is cool, but your marital problems, money issues, or family drama should be off-limits.
2. Don’t Use a Pre-Written Lease Agreement
The internet is a powerful tool when used properly. But using it to write your lease agreements can be a costly mistake. The wisest move would be to have a professional property management company in Midlothian draft your lease for you, then sit down with them to discuss its details. If you don’t want to go that route, you should hire a lawyer to write the lease.
If you choose to grab something online, you may be leaving yourself dangerously exposed. The author of a lease you download may have had the tenant’s best interest in mind, and could have included language that subtly hurts the landlord.
Some lease agreements are designed to look as if they are written for the landlord at first glance, but they have clauses that put the tenant in the driver’s seat. To play it safe, consult a Midlothian property management company before you present a lease agreement to a tenant.
3. Price Your Rental Rate Correctly
Pricing your rental rate necessitates a Goldilocks approach: you want to get it just right. If you price it too high, your target market may be forced to consider other options. If you price it too low, potential revenue will be slipping through your fingers. Here are some tips to get the porridge just right:
- Have a property management firm do a rental analysis: They will examine the going rates in your area and tell you where the sweet spot is.
- Justify your price with a powerful listing: Emphasize the elements of the listing that will attract your target tenants.
- Use images to draw tenants in: Quality pictures taken with the right lighting can help tenants imagine themselves living in the space. Once their life in your property starts to feel “real,” they are more likely to sign on the dotted line. Otherwise, the price may seem too high.
Some landlords are under the impression that a high price helps sell the property. While a low price may make people question the quality of what you’re offering, a price that’s too high doesn’t have the opposite effect.
The best way to convince a prospective tenant that your rental is worth what you’re charging is to help them experience it. Pictures, videos, tours or video tours will go a long way to providing a compelling experience worth paying for.
4. Thoroughly Screen Your Tenants
While it’s impossible to know your tenants inside and out, a good screening system will help eliminate some of the risks for your Midlothian investment portfolio. No process is perfect, but doing a good job here will save you a lot of time and stress down the road. It’s up to you to decide how much info you need to feel comfortable, but here are some everyday things landlords screen for:
- Credit check: A tenant’s payment history tells you a lot about how they handle debt.
- Criminal background check: Similar to the credit check, this is an essential window into tenant behavior.
- Relationship with current or past employers: A couple of quick calls can reveal a lot about their dependability, character, and professionalism.
- How they performed with previous landlords: People are creatures of habit. If they have developed bad renter habits in the past, you may have to suffer through the same tendencies.
On the surface, being a landlord seems like a simple case of providing a home and having someone pay to live there. A closer look reveals a myriad of potential issues.
Managing them can be a challenge, especially if you’re trying to do it on your own. Your most effective ounce of prevention could be to hire a property management company in Midlothian to help manage your real estate portfolio. This way, you don’t have to worry about day-to-day concerns and can focus on growing your rental business.
One of those very concerns that landlords and investors often overlook is the importance of seasonal maintenance with respect to your investment properties. Whether it's winter snow or a spring storm, failing to address the upkeep of your properties across the seasons is a surefire way to lose valuable income. Keep on top of your investment with our free seasonal maintenance checklist!