This biweekly sponsored column is written by the experts at Gordon James Realty, a local property management firm that specializes in residential real estate, commercial real estate and home owner associations. Please submit any questions in the comments section or via email.
Renting out property can be a solid financial investment but to see the best return on it, consider how to be a good landlord. By implementing best practices, you will see lower vacancy rates, more quality tenants, and increased word-of-mouth referrals.
What are those practices? Some are obvious; others, while critical, often aren’t thought of until they’re needed because of a crisis. Let’s cover a few of them here.
- Invest in insurance. A regular homeowner’s policy doesn’t suffice for people in property management. Once you start renting out property, you have a business. This means that losses due to fire, storms, or theft likely won’t be covered with a standard homeowner’s insurance policy. In addition, it will likely be of little help in the case of a settlement. Always, always purchase a landlord insurance policy prior to becoming a landlord. It gives you and your tenants security and peace of mind.
- Set clear expectations. More importantly, put them in a document that potential tenants have to review and sign prior to moving in. It’s easy to skim, if not skip, the fine print, so highlight the points applicable to the landlord/tenant relationship in question. For example, if the potential tenant has a pet, go over that detail. This will not only set expectations but also give you legal coverage. Another area to cover, particularly in the DC area with its higher tenant churn, is subletting.
- Screen tenants. You are the company you keep. If your property becomes known as the “party complex,” that’s the kind of tenant you’ll attract. While you can’t discriminate against people based on gender, ethnicity, and similar factors, you can screen tenants for their ability to pay on time and follow the rules.
- Respond to requests for service. Almost everyone has some horror story about a terrible landlord who never took care of anything, from the blinds to the avocado-green refrigerator. Don’t be that person. Respond in a timely fashion, and respond even faster if it’s an issue such as a leaky pipe. Also communicate with tenants often. Regular communication keeps everyone in tune and demonstrates that you care about the tenants and the property.
- Treat the neighborhood well. Eyesore properties only diminish the value of the entire neighborhood, not to mention decrease the likelihood of attracting quality tenants. The same goes for not enforcing property rules. If tenants are roaring down the street at 2 a.m., no one in the complex or surrounding neighborhood is going to be happy–and that will hurt your reputation and finances. If you want to make a really good impression on tenants and neighbors this winter, go shovel the sidewalks and driveways. You’ll gain a loyal following for life.
Being a good landlord is about setting expectations and treating people right. You do have to cover your legal bases, but that goes with the territory. But if you can get those three areas right, you’ll never be at a loss for tenants. You’ll have a waiting list.
If you’re contemplating hiring a property management company, you can learn more about our residential property management approach here.