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In the modern housing climate, those who want to become a landlord can find themselves overwhelmed with so many different components. The way people used to become landlords with relative ease, but of course anybody that’s rented in the last 20 years will tell you that landlords can be scrupulous individuals who aren’t focused on tenant well-being in the slightest.
Many people have no doubt considered renting out an extra room or expanding their property portfolio in order to take advantage of the profits it can bring, but there’s so many other things that we all need to bear in mind if we want to be a successful landlord in the modern day, so let’s show you:
Treat It as a Business
Lots of people who have been renting out a property have not been operating with a professional approach. This can be detrimental to both the tenant and the landlord because if we are not treating it with the respect it deserves, we’re not giving it our full attention, which means that because of the various legalities and concerns that tend to arise in the modern day, we can become blindsided, and our side hustle or extra income can be taken out from underneath us.
We have to approach our rental property as a professional business venture, and this can mean doing a number of important things, such as:
- Creating a detailed business plan that outlines your goals, financial projections, and even your target markets. The latter is particularly important because if you plan on renting out a property that you want to live in someday, having a certain calibre of tenant can make all the difference. In the realm of property management for landlords, there is so much support available that it reaps dividends for you to look at the right type of client as well as how you should operate it like a business.
- Keep meticulous records of your income and expenses, which is even more important in the modern day, especially if you are working with a property management company. You need to be sure that you are, in fact, turning a profit. Many landlords are buckling under the pressure these days because there isn’t enough of a profit margin available. Therefore, using the right type of software to ensure that you are staying financially afloat and earning enough money makes a big difference.
- Setting aside funds for various costs, including the unexpected, can make all the difference. Being a landlord often means having to step into a property at a moment’s notice to make particular fixes to broken pipes, boilers, and other common maintenance issues.
- Networking with other landlords is something that a person new to the industry may not consider, but when you start on this journey you may have a very particular vision of the type of landlord you want to be, but it could often be at odds with the industry as a whole. Looking at common landlord forums for support and advice can give you better insight and a welcome advantage.
Remember the Importance of Fairness
This is of particular importance if you have been a tenant in the past. The common gripe among people renting is that they are not able to get onto the property ladder themselves because they’re being priced out of the market due to rising rent.
When you are setting rent, you’ve got to look at your ideal clients. This is one of the best places to begin because if you are trying to turn a decent profit on a property that may not be in a desirable area or needs a lot of work done, you may have to reset your expectations somewhat.
Many landlords have complained about nightmare tenants and this is not a situation anybody wants to get into, however, you’ve got to look at the concept of fair rent. Setting your pricing strategy, as well as flexibility with your payments, are undoubtedly key, so here are a few things to consider:
- Regularly research local market rates, as this will ensure competitive pricing. It’s a common complaint now that rent is beyond most people’s means, particularly in the UK, as the last couple of years have seen the costs of rent skyrocket. Now, with a new government in power and the hopes that lie ahead with regards to getting onto the property ladder and obtaining affordable mortgages, property owners looking to rent out their homes and assets could find themselves slowly missing out. When you look at local market rates, this will help you stay competitive.
- Implement the right policies, which is something that a property management firm can help you with, particularly as legalities can be overwhelming. Many tenants are facing financial hardship in the current climate, and therefore, as a landlord, you can develop a fair and robust method that doesn’t paint you as a money-grabber. So many landlords are cold and heartless, and while in the UK serving a notice period of six months is now mandatory, there are still so many people who don’t have the finances to get onto the property ladder, so therefore you are their lifeline. This means that you should be flexible and respond in kind to reliable tenants who are facing temporary hardship.
- Regularly reviewing and adjusting rent prices in line with market trends and property improvements could very well mean reducing rent. This might be something you have never considered, however, if you see the property market improving and you are someone who is looking to keep reliable tenants for as long as possible, this could go a long way to building an amazing working relationship with them. It makes a lot of sense to reduce your rent in line with inflation because if you prioritise the tenant and the relationship you have with each other, this means they are more inclined to stay with you but also not take advantage of you. Lots of landlords complain about nightmare tenants, but if you have been working with someone for a long time who is a reliable tenant, a little bit of kindness can go a long way.
Fostering Excellent Tenant Relationships
To expand on the last point, if you build a positive relationship, this can lead to longer tenancies and fewer issues. There are so many things that we can do to showcase our appreciation of them and it’s all about the little things:
- Being responsive and approachable, which is a massive thing in the current climate. There are so many landlords who are not in the vicinity and in fact, spend most of their time abroad, and while this is something a property management company should be able to help with, if you want to be a private landlord you’ve got to remember that dedication is an absolute must. Being responsive and approachable with your tenants goes a long way.
- Providing a comprehensive welcome package is something that many landlords can benefit from, as this will set the expectations of both of you at the very outset. We have to remember that tenants have to sign contracts but seldom look at the small print, which can mean that you instantly get your back up if they’ve inadvertently done something that contravenes this contract. A welcome package is an excellent thing that helps you to start that relationship properly. They will know what they need to do to maintain the property, but it also positions you as a far more welcoming and approachable individual.
- Respect their privacy, which is an absolute must. Typically, landlords need to provide 24 hours’ notice before they turn up on the doorstep of a tenant, and many don’t listen to this at all. Ultimately, people are busy and they need that notice period to ensure that they can do whatever is necessary in the interim. If you are renting out a property that you expect to live in one day, you also need to adjust your expectations of what could happen to the property while you’re not there and be prepared to do your own maintenance if you plan on moving back into the property.
It is completely unfair if you are a landlord who places so much focus on small details that you think it’s fair to penalise them. A common example used to be if the property had a little bit of dust, this would require hiring a cleaner that would then be taken out of the tenant’s bond. The fact is that wear and tear is a common part of living in any property, and therefore you need to put the brakes on any temptation to punish people.
It’s not easy to be a successful landlord in the modern day, but while it used to be considered a business in the strictest sense, we now need to implement a far more holistic working practice. An excellent landlord is someone who should foster brilliant working relationships with tenants, property management firms, and everyone else. Rather than focusing purely on the finances, if you are looking to rent out a property or get into this world, there’s many ways to be a successful landlord.
Image Credit: depositphotos.com
