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What Makes a Good Landlord?

You’ve found the right properties, made all the arrangements, and you’re all set to start your investing career with tenants ready to pay the rent. But that’s just the beginning. You’re a landlord now – and making those investments work for you over the long-term calls for hands on proactive approach, as recommends.

Whether you handle your properties directly or engage a manager or management company for day-to-day tasks like screening tenants and collecting rents, as the owner, you’re still in charge, the person ultimately responsible for setting the tone and making the decisions that direct the long-term success of your income property investment efforts.

Being a successful landlord, either directly or at one remove, doesn’t just depend on the good behavior of your tenants – though that’s a key piece of the process. It also means keeping things professional, observing the law, and taking prompt action when things go wrong. Read on for a rundown of key ways to be the best landlord for your properties.

Screen Tenants Carefully

Of course, careful tenant screening can save you time and effort dealing with problems down the line. A comprehensive application that allows for credit and employment checks can weed out most problem renters, but your screening process can – and should – start even earlier.

Before you advertise your property for rent, consider who your ideal renter might be. That “renter profile” can help you define what your rental agreement or lease should contain, too. For example, if your ideal tenant can have pets, how many and what kind? Will you ask for a pet deposit and if so, how much? The list goes on, for all the characteristics of the renters you’re trying to appeal to.

At this point, though, it’s important to know your Fair Housing Act. Designed to prevent discrimination in housing, the Act defines protected characteristics that a landlord cannot consider in deciding whether to rent to someone. Protected attribute include race, sexual orientation and religion, as well as disability and a few others.

Landlords can’t advertise their housing in a way that screens out people in those groups, and they can’t ask questions on rental applications or interviews that would exclude them either. Anyone who believes that they’ve been discriminated against can file a lawsuit that results in settlements, fines, and damage to your reputation.

Stay Professional

Whether you wear jeans to inspect a leaky roof or shorts on a hot day to meet with a prospective tenant, it’s important to maintain a professional image. Income property investing is a form of entrepreneurship, with the attendant home business deductions and perks, so it’s important to behave like a business.

Keeping up that professional image can involve many things, from business cards to keeping your cool during an eviction proceeding. But it pays off on every level, from better tenant interactions to a positive reputation in the neighborhood.

Don’t be the “friend who collects the rent.” It’s one thing to be friendly, welcoming and helpful to your tenants. But experts in landlord-tenant law warn that it’s essential to keep a professional distance. That makes it far easier to handle issues when they do arise.

Act Promptly

Late – or non- paying tenants? A property manager that won’t return your calls? Complaints from neighbors about your tenants’ loud party last Saturday? It can be tempting to hope that these things will resolve themselves on their own –or that a gentle reminder will do the trick. But, as Jason Hartman advises, landlords have to keep control – and that means being proactive in order to nip problems in the bud.

Establishing clear policies from the outset makes it easier to enforce them, and enforcing them in a firm and evenhanded way before they escalate can save your investment. If you’ve been too much of a friend with that struggling tenant, it can be far too tempting to give them a little more time, and a little more. And maybe you understand that the party was an eighteenth birthday celebration and won’t happen again. But what if it does? Laying down – in writing= clear expectations and following through can protect you from unpleasant legal consequences.

Know the Law

Whether you’re using managers or doing it yourself, the buck stops with you. Knowing the applicable laws for your area and situation is essential. Those laws range from city zoning ordinances to legal requirements for starting an eviction process. Staying informed about the relevant legal codes is a key strategy for landlord success, especially if you have to deal with serious issues such as criminal activity on the property or damage done to neighboring property or people.

Landlord tenant disputes are so frequent that there’s a whole branch o the law to deal with them, and tenants sue landlords with distressing frequency for all kinds of reasons both real and frivolous. Knowing your rights, responsibilities and recourse can save time and trouble.

Know Your Insurance

Making sure you have the right insurance to protect your investment is also a key to being a take-charge landlord. If your income property consists of your own home that you’ve decided to rent out, you’ll nee to switch from a standard homeowner policy to one designed for rental property.

Rental property insurance protects your property itself, not the contents. That means you aren’t responsible for a tenant’s possessions or anything you haven’t installed on the property.

What goes on your policy might also be dictated by local laws and circumstances, so it’s wise to clarify all these things. If the area is vulnerable to flooding, for example, you may need an extra flood insurance rider on the policy. And some municipalities impose special insurance requirements – to get a policy, you might have to refuse renters with “bully breed” dogs, or other kinds of issues unique to the community.

Investing in income property opens the doors to financial freedom and independence – and being a professional, proactive landlord is the key to building wealth in real estate for a lifetime.  (Featured image: Flickr/KevFowler)


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