When you’re a landlord, your stress level can get extremely high. Whether you’re dealing with tenants who trash your property, tenants who never pay on time, or expensive repairs to appliances or structure, being a landlord is admittedly not a glamor profession.
But it can definitely be lucrative. So how do you eliminate some of the stress associated with being a landlord so you can enjoy the financial benefits?
Every landlord has a nightmare story to tell; in fact, it’s rare when they don’t have two or three. Typically these stories involve a terrible tenant or an innocent mistake that turned into an expensive challenge.
While these tales can be scary, the reality is that for most landlords, the good far outweighs the bad. The key is to reduce the number of mistakes, focus on the positive, and learn how to cut the stress and anxiety that typically comes with being a landlord.
Here are six essential tips to help you with this.
1. Carefully Screen Your Tenants
Having the right tenants in your properties can make all the difference in the world. However, screening is also one of the most time-consuming and challenging tasks of being a landlord.
You have to be careful how you turn people down, or you could end up with a lawsuit on your hands. You also don’t want to reject too many potential renters, or you could find yourself managing a vacant property that drains your resources without generating any income.
What you need to do is develop a strict and standardized screening process. Identify potential red flags, require a set number of referrals and references, and don’t hesitate to demand a hefty deposit to ensure the tenant is serious about renting the property and treating it well.
You should also look at concrete information such as employment history, income, credit history, past evictions or bankruptcies, and background checks. Since the past is usually a pretty good indicator of the future, a combination of these items will give you a good idea of what kind of potential tenants you’re dealing with.
2. Collect Rent Online
According to a recent study, 66 percent of landlords say managing their properties is more stressful than their full-time job. The same group says that rent and payment issues are the leading cause of stress.
If you can straighten out the rent payment process and ensure you get paid on time each and every month, you should be able to eliminate much of your anxiety. The best strategy is to require your renters to set up an automated draft or payment system that transfers money from their bank account to yours on the same day each month.
This will eliminate the excuses and allow for consistent bookkeeping on your end. If your tenants don’t feel comfortable setting up an automated payment system, at least require them to pay online.
If they do that, it streamlines the process and cuts the common excuses such as “It must have gotten lost in the mail” or “I just put the check in the mail today.”
3. Outsource Jobs
Simply stated, you need to stop trying to do everything yourself. If there’s a job you absolutely hate, or a task that tends to take up most of your time, don’t be afraid to outsource it.
For example, you shouldn’t waste hours cleaning your units between tenancies. Spend some extra money on a professional cleaning service and use the time you save to screen potential tenants or something else that adds value to your operation.
4. Deal with Repairs ASAP
Stress can have a snowball effect. If you let an issue rest unattended, it will fester and likely become a bigger problem.
This is especially true with regard to repairs. Say the dishwasher breaks. Instead of dragging your feet and avoiding the $250 fee to get it fixed, schedule the service call right away.
Not only does this keep your tenant happy, but it also allows you to stop worrying about the problem. Once it’s fixed, you can move on and tackle the next problem.
Otherwise you’ll have that $250 issue hanging over your head, stressing you out, and keeping you from focusing on other things you can control.
5. Maintain a Repair Fund
On a related note, it’s a good idea to start and keep a repair fund. This is a separate bank account in which you save a portion of each rent check for future repairs.
When something breaks, you won’t have to reach into your personal bank account to fix the problem. You just cut a check from the repair account and move on.
Depending on what sort of profit you’re seeing, it’s a good idea to allocate somewhere between 3 and 10 percent of the total monthly rent to your repair fund.
6. Hire a Property Manager
Finally, you should consider hiring a property manager to relieve the many burdens that stress you out as a landlord. Property managers are trained to deal with both small- and big-picture items; they can free you up to focus on what matters.
Furthermore, you can typically count on better tenant screening, higher retention rates, and lower turnover when you use the services of a property manager.
Until you become a landlord yourself, you may not fully understand the responsibilities and burdens that come with the title. From screening tenants and drafting airtight contracts to collecting rent and answering middle-of-the-night phone calls, the duties that come with owning rental properties can be suffocating at times.
However, it’s important to recall that being a landlord can be extremely profitable in the long run. The key is to locate that happy medium where you’re able to turn a profit without being chronically stressed and overwhelmed.
That’s where we come into play. At Green Residential, we have more than three decades of property management experience. We specialize in serving landlords in the Houston area.
Whether you need help managing particular details of your properties, or you’d prefer us to handle everything from tenant screening to evictions handled for you, we can do it for you. For additional information, please contact us today by calling 713-395-9700.
TREC Broker License # 9001367
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