A lot of things about rental properties make simple and obvious sense. The real estate market tends to go up over time, so of course it makes sense to invest in the right real estate property if you can afford to do so. Owning a property enables you to charge rent and generate passive income, so of course it’s a good way to generate wealth over time. It all makes perfect sense!
But many parts of owning a rental property can seem confusing and stressful, especially to first-time landlords. One of those things is the landlord-tenant relationship. There have been landlords and tenants for as long as private real estate property ownership has existed, but many of us have never been on the landlord side of the equation. It can be tough to know how to handle the relationship personally and professionally. Here are a few tips for making sure that you end up with a healthy, profitable, and sustainable relationship with your tenant.
Be careful whom you rent to
You will need to do certain things and master certain skills to create the proper landlord-tenant relationship. But don’t assume that this is all on you — your tenant will also have some responsibilities.
But you can’t control what other people do. What you can control is whom you choose to be your partner in this unique sort of relationship. When it comes to selecting the proper tenant to occupy your space, you need to be very careful.
You should choose a qualified tenant who can afford the rent and who has a clean background, free of any past problems with landlords or with law enforcement. Fortunately, it’s not too hard to find such tenants and screen out the bad fits. Use free landlord software to set up an online rental listing and a rental application, and then perform background and credit checks on your would-be tenants. Look carefully for red flags and don’t rent to anyone who isn’t qualified. It’s no fun to have your property stand empty and not bring in rental income, but you’ll be even worse off if you allow the wrong tenant to move in. Bad tenants can cause your property to deteriorate quickly, and nonpaying tenants will devastate your income.
By the way, don’t assume that you can skip this step by renting to a trusted friend or family member. Renting to people with whom you have personal relationships is a risky move. Money and friendships rarely mix, so proceed at your own risk if you’re looking to go this route.
Hold up your end of the bargain
As a landlord, you have certain responsibilities. You are expected to maintain the apartment or home that you have rented out. You should make necessary repairs and handle occasional maintenance (and perhaps even upgrades) to keep pace with reasonable expectations, local ordinances, and any disruptions that trigger the need for fixes.
It may feel a bit weird for you to have tenants depend on you for a place to live, but imagine how the tenants feel. In their own home, they have to count on someone else to make sure that leaks are fixed or walls are repainted. It’s no wonder that the relationship between a tenant and a landlord can become personal and emotionally charged.
The best way to keep things professional is to simply be a responsible landlord. Respond quickly to tenant requests and maintenance or repair needs.
Be respectful — but don’t be a pushover
Your tenants have a life outside of the relationship with you. They may be busy at times that would be most convenient with maintenance. They may be late with a rent check. As a landlord, you need to know how to strike a balance between being tyrannical and being a pushover.
By and large, you should be respectful of your tenants’ need for space. Give plenty of warning when you or a maintenance professional plan to stop by, and work with tenants on scheduling maintenance and repairs.
When rent checks run late or when the apartment has been damaged, however, you need to be careful. It’s OK, and even a good idea, to forgive small transgressions on the part of tenants who have proven themselves reliable. But don’t let an irresponsible tenants think that they can get away with poor behavior or late rent. Be firm and professional, and always make your decisions final.