When I first started as a landlord, I remember being surprised how empty and dirty and dusty a vacant home is. It highlighted the feeling of risk of not having someone in there, and the worry about paying the mortgage. What if the hot water heater breaks while the house is vacant and I don’t know about it? New floors aren't cheap!
That feeling of anxiety about the unknown was palpable, and I was anxious to get anyone in the property.
When you’re a first-time landlord, there’s a lot of learning through trial and error. But if you can learn from other people’s trials, you’ll make fewer errors! Here are some of the top lessons I had to learn on my own as a new landlord.
1. Be Picky Who You Rent To
For new landlords, it’s very tempting to simply find anyone to fill your vacancy. I was so anxious to get a renter that I would waste my time talking with people who should never have qualified. The longer I talked to them, the more they sucked me into their stories: “This is why I got evicted before, but don’t worry, it won’t happen this time.”
It’s important to qualify prospective tenants early on, without getting personally involved. Instead, determine your qualification criteria up front and stick to it. Know what types of prospective tenants you’re willing to rent to and which ones you aren’t.
And when it comes time to pick your tenant, stick to your criteria. Don’t negotiate with yourself. In the long run — and maybe even in the short run — it’s a mistake to make exceptions. If you rent to the wrong people, you won’t be doing your tenant any favors. You could actually put them in a situation that overextends their finances and puts them at risk of bankruptcy or eviction.
2. Ask the Right Questions
I quickly discovered that asking the right questions makes it much easier to qualify prospective tenants early on and avoid the internal debates about whether to rent to a particular prospect or not. It’s amazing how much clarity the right questions bring.
What are the right questions to ask? Good question! Actually, this is the foundation of Tenant Turner software. Through lots of trial and error, and plenty of research, we came to understand the questions that help you identify the qualities of a good tenant — especially the qualities you won’t find in a credit report.
Tenant Turner’s built-in screening questions ask your tenant leads about:
- Pet situation
- Move-in date
- Active bankruptcies
- Income-to-rent ratio
- Past evictions
You can also add your own custom questions.
You don’t need a Social Security Number, date of birth, or credit card information to pre-screen tenant leads. And you don’t need to pay for any information. You just need to know the right questions to ask.
Dig deeper: 3 Tenant Screening Tips for Property Managers
3. Make the Most of Your Maintenance Calls
Before hiring a professional to fix a maintenance issue, I quickly learned to go over to the property and take a look at it myself. Nine times out of ten, it was an easy problem I could fix right there.
Usually, the tenant just didn’t know how to fix it, or they thought it wasn’t their responsibility because they didn’t own the property. A broken air conditioner would often simply be clogged vents. Going to the property allowed me to see it just needed a filter swapped out, and I was able to avoid calling in an HVAC technician.
Going to the property on the tenant’s request also gives you the chance to check on the overall state of things. Are there other repairs you can take care of for them? Will you need to schedule tree service or clean out the gutters? How is the roof holding up?
4. Be Prepared for Lease Violations
When I first started out as a landlord, I had that nagging concern: will they break the rental agreement behind my back? This concern often turned out to be a reality — most tenants broke the lease in one way or another.
Anytime you’re onsite, keep your eyes open for lease agreement violations. Maybe there’s a dog in the home that isn’t on the lease, or a live-in partner who isn’t on the lease. You don’t have to evict the tenant over it, but at the very least you should update the lease agreement and adjust the rent appropriately.
Then there are the situations that fall outside of your expertise. This never happened to me, but I know of a new landlord who discovered his tenant was growing marijuana in the basement. He was caught completely off-guard and didn’t know how to handle the situation. They said they had a license to grow medical marijuana, but he didn’t know if the license was valid.
It’s important to know how you’ll handle questionable situations when they come up — and they always come up without warning. You can’t be an expert about everything, so how do you prepare for those kinds of encounters?
Each state has landlord-tenant laws that are established to cover these kinds of situations and explains what your rights are. If there’s still ambiguity, reach out to a professional — either a professional property manager, a realtor, or an attorney who specializes in landlord-tenant law.
Finally, make sure your lease agreement is clear about expectations and responsibilities. Be as specific as you can about what is and isn’t allowed. Cover all the bases you can anticipate. Spell out who is responsible for lawn care, snow removal, and various types of maintenance.
5. Charge What the Property Is Worth
When you’re first starting out as a landlord, one of the hardest decisions you have to make is figuring out how much to charge for rent. You don’t want to charge so much that it takes forever to fill a vacancy, but you don’t want to cheat yourself out of income, either.
Here’s what I recommend. First, establish the bottom end that you’ll need to earn in order to cover your expenses. Take into account your mortgage, HOA dues, insurance and taxes, and maintenance costs. That’s the very least that you should charge — otherwise, you’ll always be in the red.
Next, figure out the top end of your range. Do this by checking out the market value of your location and comparable properties online. You could also get the opinion of a professional appraiser or real estate agent.
One rule of thumb is to charge about 1% of the property’s value per month.
Even after doing these exercises, it can be tricky to know what the sweet spot is. One helpful way to know if you’re pricing the property too high is simply to ask your tenant leads for feedback after the walkthrough.
Tenant Turner makes it easy to get specific feedback after a walkthrough. The software automatically sends out a quick and easy survey via text message. Part of the standard survey asks if the property was priced appropriately.
You’ll always have some prospects that say the rent is too high. If everyone can afford your property, you’re priced much too low.
6. Use the Right Tools
For many new landlords, the rental process is a big mystery. You have to feel your way through the dark to generate tenant leads, get them to view the property, and win a rental application from them.
You might get lots of leads, but none that qualify. Worse yet, you might not get any leads at all. Figuring out the right adjustments to make can take valuable time.
Using a professional property manager who is a member of a professional trade group like the National Association of Residential Property Managers (NARPM) or the National Apartment Association (NAA) and that uses Tenant Turner scheduling software takes the mystery out of the leasing process and fills those vacant residential properties fast. Through automated leasing activities and data-rich insights, you’ll be able to attract and qualify the right tenant leads more effectively — and nurture them to the showings and application more successfully. Finding the right property manager will significantly reduce the anxiety associated with being a landlord.
I remember the challenges of learning as I go, which is why Tenant Turner was created. We’re here as your go-to resource for residential property management and leasing questions.
