Successful Landlord: 7 Tips to Help Be the Best

So, you want to be a successful landlord. The good news is that this is a fantastic way to invest your funds and increase your monthly income. It’s also a passive source of income, meaning that you don’t have to work very hard for your money. While you are providing a service, most of that service comes down to providing a roof over someone’s head.

Does this mean that being a landlord is easy? Well, there are certain things you have to bear in mind when considering buying a property to rent it out. Even if you just want to rent out a room in your house, you still have to make sure that you’re on the right side of the law, and then you have to deal with a tenant or housemate.

With this in mind, here are a few tips to help you make sure you earn money as a landlord, without any major headaches.

Is Real Estate Right for You?

Investing in real estate is a good way to make money, but it might not be the best option for everyone. Just like any other significant investment, you will need to start with some capital for a deposit. You’re also taking on a measure of risk, even with a relatively stable investment like real estate.

However, being a successful landlord has more costs than you might think. You have to pay to maintain the property, and you might have other costs like taxes to pay. Your income might also not be as stable as you might think, especially if rent fluctuates or there’s a lot of properties in your area.

This isn’t to say that it’s not worth it. Rather, investing in real estate is something that you should only go into if you’re sure you’re prepared for it. It’s a commitment to own a home, and while the income is passive, you still have to spend time managing your property and your tenants.

Buying the Right Properties

If you decide real estate is a goal for you, then you need to first consider which property to buy. While buying a property is exciting, knowing when to leave a potential bad deal is a vital skill for a successful landlord to have. Always check every property before purchasing so you don’t end up with some nasty surprises that you have to fix before you can earn money.

As well as the property itself, you should also look into the other rental properties in the area and work out what the average rent is as well as the supply and demand. What type of tenants are you likely to attract? How much rent can you reasonably expect to charge? Are there rent control measures in place?

Sometimes a deal is too good to be true. And, sometimes, you can find a rare good deal in an area with a lot of potential. You might even be able to renovate a property with minor issues and get a discount on the price, but always check for more serious structural issues.

Residential or Commercial Real Estate?

Another thing to consider is whether to invest in residential properties or commercial real estate. These are both great ways to earn a profit, but they’re very different animals. It’s best to become familiar with the differences between these types of real estate and how they might affect you as an owner and a landlord.

Residential real estate is more popular among beginners because you can find cheaper properties and it’s a lot more straightforward. With commercial real estate, you might need to invest more money and you may have to put up with higher risks, but this can result in a much more profitable relationship. 

Always do your research, especially when looking into commercial properties, because you may have additional responsibilities as a successful landlord. 

Short and Long Term Rent

While most people buy properties to rent them to long-term tenants looking for a place to live, another option is the short-term rental market. Short-term tenants might stay for a weekend or over a month, but rarely for longer as the rental rates are much higher. They might include people on vacation or work trips.

One of the benefits of short-term rentals is that the property doesn’t have to be rented the whole year. So if you buy a vacation home or a property where you and your family spend a lot of time, renting it to short-term letters is a great way to earn some extra income.

However, short-term rentals do have some extra costs. As a successful landlord, you will need to furnish the property and it has to be comfortable enough for people to settle down immediately. You might also need to sign up with a rental company to get more clients.

Long-term rentals are often more stable, as you know you’ll be getting paid each month and you can build a relationship with your tenants.

Understanding Rental Agreements

Before you enter a residential lease agreement, you need to make sure the agreement is legally binding, follows the local laws, and that both parties understand the agreement. This will help you if any disputes arise during the lease time and, if you do need to evict a tenant for breaking the lease, you can refer back to the lease agreement.

Finding Good Tenants

Good tenants are absolute gold. The ideal tenant is someone who is financially stable enough to pay the agreed-upon rent on time, while also taking care of the property. Unfortunately, it can be as hard to find a good tenant as it is to find gold.

If possible, meet potential tenants in advance to get a feel for who they are. You can also let them know of your expectations beforehand and work through minor issues sooner rather than later. 

Managing Your Properties and Tenants

So, you have your property (or more) and people have moved in. What now? Ideally, everything will be paid in full and on time and you can arrange regular maintenance checkups of the property to ensure it’s in good working order. 

If your tenants tell you that they have issues paying rent, you have options. If it’s just a case of getting money together a couple of days late, it might not be worth making a big deal out of it, especially if you have an otherwise good relationship. If they regularly don’t pay on time or even fail to pay, it can be worth checking your lease agreement and considering getting a new tenant.

Property management companies can be a great resource for successful landlords who have multiple properties, as they can help you keep on top of your landlord duties without making it feel like a fulltime job. This can allow you to continue to grow your real estate assets.