Are you a new landlord feeling overwhelmed by your duties? Are you getting confused or frustrated trying to figure out landlord-tenant law? Do you wonder if you chose the right tenant? Is your property secure?
No matter how easy some people make it look, being a landlord is hard work that taxes your mind, body, and spirit. However, it’s possible to thrive as a new landlord even without experience. Before you take on another task, here’s what you need to know about being a landlord.
1. Property investors have a secret weapon
Investors talk about what’s involved with owning rental property, but that doesn’t mean they do the work alone – or at all. Professional investors have a secret weapon: a property management company.
A property management company is an organization that takes on landlord duties for property owners in exchange for a small fee. Services provided by property management companies vary, but some fill a wide range of needs. For example, Green Residential, a full-service property management company in Katy, Texas, provides extra services like professional photography, marketing, and financial oversight.
When you hire a property management company, you’re delegating some of the most tedious, time-consuming, and frustrating landlord duties. For instance, tasks like evicting a tenant and collecting rent don’t always go smoothly. Tenants have excuses for late rent, and evictions often require court intervention. Not to mention, if you don’t perform an eviction correctly you could end up in trouble.
2. Don’t be a pushover – inform tenants of your expectations early
Some tenants will try to get away with paying rent late, escaping late fees, or not paying at all. Other tenants will knowingly violate the lease agreement and expect to be let off the hook. If you set the tone of your relationship early as one of business, this is less likely to happen.
From the moment you begin interacting with a potential tenant, you need to set your expectations, both verbally and in writing. Everything you expect from your tenants should be included in the lease to a degree. Verbally let your tenants know that lease violations won’t be given a free pass and that you expect them to pay any late fees they incur for paying rent late.
Depending on individual circumstances, you can choose to waive a late fee if you see fit. However, be cautious of creating the expectation that all late fees will be waived.
3. Consult with a landlord-tenant law attorney
You can’t trust what you read on the internet regarding landlord-tenant law. There will always be nuances and exceptions that may not be discussed and only an attorney can clarify the details. For example, the federal Fair Housing Act doesn’t apply to every dwelling, but state laws might dictate the same regulations.
If your tenant rents a room in a house you occupy, or if you occupy a unit in a building with four or fewer units, you’re exempt from the Fair Housing Act with one exception: your advertising must follow Fair Housing Act guidelines. However, if you aren’t up to speed with your state and local housing laws, you may be required to follow the same regulations as per the state.
You can’t afford to be a landlord unless you consult an attorney on a regular basis to make sure your lease agreements and tenant interactions adhere to current laws. One mistake can cost you tens of thousands of dollars.
4. Learn from professional landlords
Even if you only rent out one unit, never stop learning about how to be a successful landlord. No matter who you listen to, you’ll pick up tips and tricks for managing just about every situation you can imagine. You’ll probably learn some tricks for handling situations you never hope to experience.
5. Get familiar with the tenant turnover process
Turning over a tenant is similar to renting a hotel room to a new guest. Expect to do plenty of cleaning and possibly some repairs. The difference, however, is that tenant turnover can be expensive.
The estimated cost to turn over a unit is $2,500. The high cost is largely attributed to periods of vacancy and necessary repairs. You may even decide to perform minor renovations to add elements tenants want like a washer and dryer or a walk-in closet.
Experience will come
Landlording is something everyone has to learn through experience. If you get overwhelmed, remember that you can hire a property management company. Otherwise, keep learning and don’t give up when things get tough.