For some reason, just the term “landlord” has negative connotations (“slumlord” comes to mind!). Many people assume these people are always trying to price gouge and get away with not fixing things that are broken, but that’s an unfortunate stereotype. If you’re considering becoming a landlord, you can get more than just financial compensation. If you do a good job and work hard at it, you can reap a lot of rewards. Wondering how to be a successful landlord? Read on for some practical tips.
First and foremost, you need to screen, screen, and, oh, screen again! Nothing is worse than a bad tenant or bad tenants. They might seem super nice or remind you of your favorite cousin back home but this is a business, and you need to treat it as such. This means you have to know how to run a credit check on a tenant. The credit check will tell you whether this person is good at paying his or her bills on time. It will also give you an idea of the amount of debt he or she currently has. If the potential tenant has maxed out a bunch of credit cards, he or she could very well have trouble paying the rent.
Provide a Thorough Application
Your application should be thorough as well, asking them for things like employers—past and present, references, pets, income level, and contact information for previous landlords. Most importantly, you want to get an overall picture of their finances so you know how they will pay their rent each month. If it’s a young person or someone in between jobs, be wary, but you also don’t have to exclude him or her out of hand. You might consider allowing this person to have a financially secure person co-sign on the lease. That way, you know you’ll be able to recoup any fees that you can’t get from them should that be the case.
Run a Background Check
You might think this is overkill in addition to the credit check and application, but a successful landlord will also run a background check. This is typically fairly easily done using the potential tenant’s social security number, and will uncover things like prior evictions, criminal records, and other matters of public record, such as whether he or she owes child support. This is just another way of seeing if this person is overextended financially and, quite frankly, whether he or she is not the type of person you trust being on your property.
Once all this screening is done, you need to actually spend the time doing the legwork on what has been reported. Make it a priority to really study the application and follow up on things like calling the references, employers, and prior landlords. A lot can be gleaned during these phone calls and/or email exchanges. As for what to ask a past landlord, you might want to cover topics like late payment history, outstanding debt, noise complaints, damage to the rental unit, and whether this person would consider renting to him or her again.
Always treat your tenants well (no matter how you feel about them!). They might already have the aforementioned “slumlord” notion in their heads, so assure them right away that you’re going to treat them with respect and, in turn, they will hopefully do the same. This doesn’t mean you have to be a pushover—in fact, just the opposite. If you set firm boundaries about late fees and when the rent is due, etc., they are more likely to respect you. But you need to take their concerns seriously as well and show them that you are going to do your best to make their stay on your rental property as comfortable as possible. In the unfortunate circumstance that your tenant stops paying rent or does something else worthy of being evicted, consult an attorney, as there are very specific procedures you need to follow in order to get this person out of your rental property.
Don’t Be Afraid to Ask for Help
Lastly, get help, especially if you are new to being a landlord! Ask others who are current landlords or who have done so in the past what advice they can give you. Consult landlord blogs, forums, and podcasts on the topic—there are plenty of resources for landlords available. There is always room to learn more, and this will only help to navigate the real estate world even more efficiently.