Advice On Being A Landlord

by molohi

posted on 10/06/2009

In today's tough economy, we are all looking for ways to make a little extra money. That being said, I have always thought and continue to think that real estate is where the money is. People are always going to need a place to live, whether they are renting or buying and real estate will continue to increase in value, as there is no more land being made. It is a valuable, limited resource.

For those of you wishing to enter this market, I have a little experience and can share some of my thoughts. Granted, I have had more 'bad' experience than good, so I can certainly tell you what NOT to do, but before I go there, I want to express that no amount of preparation or precaution can prevent all 'bad' things from happening. Always expect the unexpected and be prepared to spend a few bucks every now and then.

If you are planning on becoming a landlord, here are a few things I feel are important to know:

1. I like a nice place, although most people who are renting have no idea of the value of a nice, decent place. The nicer you make your rental property, the more money you will have to spend when the people move out or leave in the middle of the night to fix it back to 'nice' standards. I'm not saying to be a slum lord here, but the nicer the place, the more money you can get in rent, but even at that, it is not a guarantee the tenants will take care of it.

2. Things break. Fix them and don't waste time doing it. Whether or not someone is paying their rent does not mean you can delay fixing something if it breaks. Delaying fixing a broken toilet is only going to cost you more money in the long run, as the tenants can forfeit any deposit made and leave the toilet overrunning, thus causing you to have to replace the entire floor instead of just fixing the toilet. Besides that, keep in mind that this is YOUR house and YOU have to pay the bills to fix things. Whether you want to spend $100 on a plumber or $500 on a contractor is up to you.

3. ALWAYS get a deposit and get it up front. Although I have tried to be kind to people, as I know if would be hard for me to come up with $1,000 or more for a deposit plus first months rent, I have found that being nice usually costs me in the end.

4. CHECK on your place at least every other month. You must give notice that you will be checking on the place, but this is your right and responsibility. It also gives you an opportunity to be friendly with your tenants and not just the person who knocks on their door at the first of the month.

5. Above all, do a background check. I have fallen prey to several tenants who weren't on the up and up all because I was worried about where the monthly mortgage payment was coming from and rented to the first person who handed me the money. Although this eased my mind for a short time, it doesn't take long for things to start breaking down and then I'm right back in the shape I was, looking for a way to pay the mortgage.

6. Last but not least, if you get a good tenant who takes care of your place, pays the rent on time with minimal problems and doesn't complain much, count your blessings!

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