By Samantha Jones
This article is part two of a two-part series on purchasing and managing an investment property.
I hope everyone found my first five tips on becoming a rental property owner and manager useful. In case you missed them, check them out now. As promised, here are my continued top 10 tips on how to prosper in real estate investing.
6. Advertising for tenants. We’ve found success in hosting one open house for a few hours in which all applicants. That way, we’re not showing the house 9 million times. Believe me, you’ll thank me for that. We learned the hard way. The MLS, internet marketing, and Facebook Marketplace can be gems for finding prospective tenants, too.
7. Lease terms. Treat this as you would renting a client’s property. Consider the duration and terms of the lease. A year is typically ideal for us, but we prefer our leases to come up in late spring. When I know the demand for rentals is high in our market. Our renovations took longer than expected, so we didn’t sign a lease until June. We wrote it for 11 months, allowing us to renew or sign with new tenants next May. From then on, we’ll go with 12-month leases at a time. That way, we’ll always hit the market before our summer lull. Selfishly, that also means we aren’t wasting our fleeting Chicago summer fixing up the place for new tenants. Create a standard process and adhere to it. Use credit and employment checks if you’d like. If you require good credit, don’t deviate from that set score to ensure you’re following fair housing standards. Will you allow pets? If so, determine a pet rent and/or non-refundable deposit.
8. Pricing. Run the comps. Find a balance between not leaving money on the table and spinning your wheels. Even a month without a tenant can negate the extra $100-$200 you’re chasing on an ambitious monthly rent. I’d rather price our rental low and rent quickly at or above our asking price than have the property sit vacant and carry the expenses without a lease.
9. Relationships. This isn’t an us vs. them scenario between you and your renters. After all, you want the same thing: a peaceful existence. You want tenants to pay regularly and keep the home in good shape, while they want you to be available and prompt in addressing repairs or concerns. It also doesn’t hurt to explain this is your livelihood, too. You have bills and overhead, so if they don’t pay, you can’t necessarily pay the mortgage or taxes. A friendly approach, and a little empathy and honesty, can go a long way.
10. Confidence. Becoming a landlord can seem more intimidating than it really is. Just take it one step at a time and be confident in your skills. It’s not your first time buying a property, nor is it likely your first time renting one. Your role as a landlord may be new, but you’re already a real estate expert and you’re already ahead of most who take on this endeavor.
We’re five months into our journey as landlords. I’m knocking on wood as I write this, but it’s been a phenomenal experience. Our tenants pay like clockwork and have only reached out about a few house quirks my husband addressed. It’s so rewarding to see them make the home their own. They’re happy and we’re able to enjoy a little extra cash each month towards our nest egg and future rentals.
Do you have any tips to add or questions about the landlord game? Comment below or send them my way. It takes a village!
Samantha Jones is an award-winning real estate broker with Coldwell Banker Residential Brokerage in the Chicagoland area. She is a top producer who specializes in residential sales. Connect with Samantha on Facebook, Instagram, and LinkedIn.