Being a landlord is a great investment strategy and source of passive income. However, things don’t often go smoothly and landlords may find themselves with a bag of problems ranging from rising costs of maintenance, uncooperative tenants, changing regulations (especially in the current COVID-10 pandemic) and more. We’ve consulted with several landlords to come up with this helpful list of tips that can ease your landlord struggles.
Screen Your Tenants
As they often say, first impressions counts. This applies even more to tenants that you have to work with for a significant period of time. Don’t go with the first one that presents his deposit cheque. Rather, create a thorough vetting procedure that may include credit checks and even references from previous landlords. List your tolerances (e.g. pets, smoking, parties) and expectations and express them in writing to your prospective tenant. The clearer it is from the beginning, the better.
Make an Airtight Lease Agreement
Although this may seem tedious, a detailed lease agreement that leaves no room for ambiguity might be your saving grace should situations go awry. It should contain information such as what is and isn’t allowed, consequences for violation of the rules, procedure for expressing issues with the home, modes of communication and expected response time. Set some time to go through the agreement, point by point, with the tenant and clarify any misunderstandings from the get-go.
Set a Rate Comparable to the Market
Rent rate is one of the most important consideration to the tenant and should be set with due consideration. Too high and you might turn potential tenants away; too low and you may raise suspicions about problems with your property. It is always safe to go with market rate – find comparable rentals in your area offering the same amenities as you do. Make sure that you can still spin a profit out of the rent you charge but don’t get too greedy. At the end of the day, this is a long-term investment and relationship with your tenant. Aim for building trust and stability by charging a fair rate.
Stay In Contact
As a rule of thumb, don’t stay out of contact with your tenant for more than 3 months. Check in to see how things are going or if there have been any issues they haven’t told you about. Establish a preferred mode of communication (e.g. email, phone, text, call) and convey about the procedure for raising issues with the rent.
Follow-Up
If and when an issue does arise, follow-up with the tenant until the issue is resolved. Don’t leave it to them to DIY a solution to a major problem (e.g. electrical, structural) that could cause other issues in the future. By exhibiting good customer service and resolving issues in a timely manner, you build good rapport as a landlord which could lead to tenant referrals.
Always be Professional
No matter the situation, always be professional in your communication. Do not ever resort to rude behavior, threats or unlawful actions. These can and will backfire against you. If the situation has escalated beyond your control, involve another professional to work toward resolution. No one wants a horrid tenant-landlord relationship so it’s best work out disagreements early on before they build up into something unmanageable.
Similarly, maintain a professional relationship even in good times. While some tenants can be extremely easy to get along with, crossing into the friendship zone with them may lead to tensions and problems with business transactions (i.e. rent collection) in the future.
Consider a Property Management Company
Property management companies (PMCs) are good for landlords that do not desire a direct relationship or communication with their tenants. They also work well if you live far from your rental property. Some PMCs offer rent collection, emergency maintenance and other services for your convenience. Select a PMC based on the areas they service, the fee, services offered and reviews by other landlords.
Know the Changing Regulations
Keep updated with latest governmental regulations with regards to landlords and tenants in your province (for Alberta, you can refer to this page: https://www.alberta.ca/landlords-tenants.aspx). Existing global and national conditions (e.g. COVID-10 pandemic) can change these regulations and grants may be available for you or your tenants. Know your rights as a landlord and but also be familiar with the rights of tenants as well. The more knowledge you have, the better your position for handling issues that occur.
Show Appreciation
Kindness goes a long way. Show kindness to your tenants and express appreciation for even a stable business relationship (i.e. “Thank you for being timely with your rent for the past 6 months”). At the end of the day, they are people like you who just need a clean and safe home to live in. If you know they have been through a major event in their life (e.g. new baby, wedding, funeral), maybe send a small token or even a simple card. These small acts will undoubtedly be appreciated.
Let It Go
Finally, when you find yourself ready to move on from being a landlord, private buyers like Bow River Properties can help you cash out. Whether you have tenants that you do not wish to disturb or your rental unit is vacant, contact us for a free cash offer and we can get you started on a stress-free process to sell your property. With a closing duration in as short as 2 weeks, who knows what your next investment/adventure would be!