Landlord 101: Get Over It and Raise It!
Buy & Hold property Management (being a Landlord) is not easy, but it can be profitable and a nice source of residual income. You do have to be nice to people-but not a pushover. It's hard to be non-emotional about decisions and numbers, but to be successful, remember this is a business.
I always treat my tenants like clients, not “the tenant”, but I also run my business like a business. Screening your applicants is crucial. Who your tenant is, determines much of how rewarding or dreadful being a landlord can be. I’m talking income, credit history, past landlord testimonials and your gut feeling. Remember though, we can't discriminate based on the Fair Housing Act "you know whats".
Raise The Rent: You can’t be afraid to raise the rent when the market says you can or expenses say you should. If the market values rise, you need to maintain pace with those values in order to remain positive cash flow. But your property also needs to be in the average to above average comparable condition to do so.
I run into so many under-performing properties, either because the owner never updates the property and can’t raise the rent, laziness, or they fear loosing a good tenant over the rent raise.
Property taxes, utilities, maintenance, inflation; it all goes up, so must our rents.
I recently raised rents in 2014, yes; they flinched, but never left. Most tenants will search for other options, but if you are providing fair market rents, above average properties and treat them with respect; they usually cannot do better than right where they are. Plus, moving is a hassle. Vacancy is scary & our biggest cost as investors over maintenance & repairs, but collecting less than you should, is charity not business and this is a business.
You also need to enforce your penalty fees. Bounced checks, late fees, damage, and repairs outside of normal wear n tear. I have had tenants buy me new washing machines, plants and lots of paint & carpet cleaning.
Comments(1)