Rental property horror stories abound. There are so many stumbling blocks: bad tenants, bad properties, or trouble renting. The possibility of failure is high enough that many in our community bristle at the thought of jumping into this lucrative side hustle. For the inexperienced, the hurdles are downright daunting. A few simple landlord hacks, however, can make the real estate asset class reachable to most.
My wife and I are busy professionals deeply engaged in our daily jobs as well as the raising of our two children. The last thing we thought we would want is a slew of properties pulling us away from our already busy lives. Thus our foray into real estate rentals was quite accidental. Our original goal was to enjoy a city property for weekends and holidays. We were at the beginning of the economic downturn and the property market was ripe for the buying.
Our first property was lovely, and we enjoyed it for six months before realizing that it would not be used as much as we hoped. The realtor who sold us the unit, helped us rent it, and we were off. Over the next few years the real estate market continued to plunge, and before we knew it, we were owners of three more properties.
You would think that each rental would bring hours of extra work to our weekly schedules. We found, conversely, with a few basic landlord hacks, we were able to decrease our moment to moment involvement.
If a doctor and a human resources executive with two growing kids can keep their heads above water in this business, do you think you can?
Let’s see what you think of our landlord hacks.
Before buying, hire the best home inspector in the business
A great and detailed home inspector is worth his/her weight in gold. You want to know everything wrong with a property. Your future as a landlord depends on it.
This knowledge serves two purposes. First, you may decide that the property is too much to handl, and not buy in the first place. Second, identifying and correcting major malfunctions before the property is rented will save both time and energy.
How do you find a good home inspector? Ask some realtors. Find out who they prefer to work with, and then stay away. We look for the inspector who has the reputation of breaking up the most deals. That’s right. We look for the inspector that realtors despise the most.
Don’t be afraid to learn every single flaw and problem with your rental property. In order to control and understand cash flow, you need to know what is likely to go wrong.
Rent to low risk tenants
Every perspective tenant should supply you a credit report, a recent bank statement, and a copy of a pay stub or W2. Study these documents carefully. You should have all the information you need to know.
Pet owners increase your risk of damage to the property. Just sayin.
Call references and past landlords. While obviously both sources can be biased (the landlord might be thrilled to get rid of them), see what you can find out.
Google and Facebook stalk them. Make sure all publicly available info checks out.
Meet in person and interview. Why are they moving, what are their plans. Does this person sitting across the table from you feel right?
Collect rents electronically
We use a service called Cozy. For free, it helps our tenants submit online ACH payments that drop right into our bank accounts. No muss, no fuss. It takes about 10 minutes to set up, and all you need is your tenants email address.
My tenants pay a few pennies for the service, but they really appreciate the ease of use. The site even emails them throughout the month to remind about upcoming payments.
It’s ultra easy.
Hire a great handyman
I am not handy. I hate fixing things around the house and often accidentally make the damage worse. Who has time to run back and forth to properties unplugging drains? Your life will be much easier if you have someone available by text to help with these issues.
Many of the day-to-day problems are easy to fix and inexpensive. A light bulb here, a blown fuse there. Let someone else take these concerns off your hands.
In fact, if you have a few properties, give the tenants your handyman’s phone number. Tell the handyman that he has the free reign to fix anything under $200 dollars without even calling you. You can track his activity through invoices, and if there is abuse on either side, correct things quickly.
Want to be a landlord?
This list of landlord hacks is neither extensive nor all-encompassing. But if you follow these few nuggets of advice, you are well on your way to running a seamless real estate empire.