How to Be a Great Landlord
In the U.S., more people are renting homes than at any point since 1965. And thanks to all those renters, savvy investors can build wealth through real estate.
While purchasing and renting out an investment property has some pretty incredible benefits, most people see one main drawback: Becoming a landlord.
And there’s no question being a landlord is a huge responsibility. It requires you to be a jack of all trades—or be able to pay someone who is. It’s a full-time, 24/7 job demanding a high level of discernment, patience, empathy, organization, dedication, and reliability.
Oh, is that all?
Obviously, not everyone can be a great landlord. But we have faith in you!
14 Ways to be a Great Landlord
#1 Please don’t call yourself a landlord.
Landlord has become synonymous with slumlord, and the bad apples have really spoiled it for the rest of us.
But TBH we never really liked the term, anyway. It brings to mind hierarchy and privilege, you know? But landlords simply aren’t “above” their residents; they just happen to own and lease out the building.
Owner and tenant or owner and resident are much better descriptions of what’s really happening—and gets you away from the landlord ickiness.
#2 Treat your property like a business…
…because it is! You earn income and pay taxes on your rental property. For all intents and purposes, you now own and operate your own business. Congrats!
And just like with any other business, it’s important to remain professional. From relationships and customer service with your residents to keeping finances in good order, treating your rentals like the businesses they are will serve you in the long-term.
#3 Consider hiring a property management company.
Property management companies do exactly what it sounds like—in return for 5-10% of your monthly rental income.
With their help, you can reap all the benefits of real estate investing with minimal personal involvement. They can:
Market your property
Screen tenants
Collect rent
Provide customer service and handle tenant issues
Respond to maintenance requests
By putting your property in the hands of the professionals, you can have peace of mind that your investment is well cared for.
#4 Get your sh*t together before offering your first lease.
Your first few rentals will come with a learning curve. But that’s no excuse to just wing it.
These are folks who are willing to pay you their hard-earned dollars for a safe, well-maintained, reliable place to call home!
So get everything set—insurance, banking, maintenance, plans for emergencies—before signing that first lease to give you and your tenants the best experience possible.
#5 Rent to Section 8 and other voucher participants.
Folks with housing vouchers get a bad rep. But, the truth is, the demographics that typically receive Section 8 and similar vouchers can be the best tenants!
43% of Section 8 recipients are families.
10% of Section 8 recipients are older adults.
43% of Section 8 recipients have a disability.
Section 8 is also a great benefit to you as a rent collector. A substantial part of the tenant’s subsidized rent will show up on time every month, without fail. You also earn a competitive edge over those that don’t accept vouchers.
Plus, you can screen and lease to whomever you want, even if they’re not Section 8 recipients. At the end of the day, you’re just opening yourself up to a whole new potential tenant pool who unnecessarily—and unfairly—face a lot of barriers in real estate. It’s a win-win.
#6 Have great insurance. (And require it for your residents, too.)
For the same reasons homeowners insurance is totally worth it, landlord insurance is a spectacular investment.
It covers property damage, lost rental income, liability protection, and more to cushion your new asset. Some insurance providers will even let you bundle homeowners and landlord insurance for a discount.
Rental insurance for your residents is the same song, different verse. By requiring renters’ insurance, you can avoid costly and time-consuming litigation if your tenants’ belongings are damaged. And its premium-to-coverage ratio is suuuuuuper high, so your tenants shouldn’t even bat an eye about needing it!
#7 Have a super solid lease agreement.
You want your written lease to be airtight. It should outline the rights and responsibilities of each party very, very thoroughly.
A great lease agreement should also be wildly specific, down to who’s responsible for changing the lightbulbs. That way, when these things come into question, you have a signed and mutually agreed upon document to protect both you and your tenants.
#8 Write a welcome letter!
There’s nothing better for a tenant than a warm, personable owner. Leaving a brief welcome letter for your new residents can start your relationship on the right foot!
Providing any extra tips and tricks for the unit like when trash pick-up day is or directions to local amenities—grocery stores, pharmacies, hidden gems—will earn you extra brownie points. And when tenants like you, they’ll want to maintain a good relationship with you.
#9 Require a reasonable rent.
Here’s a truthbomb for you: If you have to price gouge your tenants to make your investment green, you picked the wrong property! (Get tips for choosing the right one.)
Charging a reasonable rent means the rent:
Meets your financial needs.
Compares well to other properties in the area.
Matches the quality of the rental property.
Do a quick Google search or use services like Rentometer to compare for-rent properties. You can also look at the U.S. Department of Housing and Urban Development (HUD)’s Fair Market Rent tool to see what you should charge in rent, based on government voucher programs.
#10 Brush up on tenant-landlord rights and responsibilities.
Review all the laws that protect both the owner and the resident of a rental property.
For example, did you know you can’t evict someone yourself? Eviction is a legal process, carried out in a court, with its own procedures and protocols.
You need to thoroughly understand your obligations as an owner and how to respect your tenants’ rights. Colorado Housing Connects has some great resources to get you started.
Another part of being on the legal up-and-up is honoring your lease agreement. Just like you expect your residents to hold up their end of the bargain, you should do your part, too!
Before making any decisions that affect your tenants, including answering their questions or requests, consult the lease to make sure you’re being consistent with your original agreement.
#11 Be accessible, responsive, and reliable.
We’re not talking have-your-phone-on-the-loudest-setting-for-3-AM-maintence-calls accessible. But it’s important to be reasonably available for both emergencies and everyday tenant questions.
Provide your tenants with multiple ways to contact you—phone, email, property management platform—to make sure you can connect ASAP should the need arise. If you can’t fix a problem right away, be sure to communicate that with your tenants and tell them when they can expect you to take care of it.
#12 Offer online services.
Online services are invaluable. The convenience not only attracts more tenants, but it also makes your life so much easier.
With online lease agreements, maintenance requests, and rent payment you can keep everything related to your rental business in one place. Accessible and organized documentation and bookkeeping? Yes, please!
#13 Respect your tenants’ privacy.
As the owner, you have the right to inspect your property. But that doesn’t give you an excuse to be nosy and take a peek at how your residents are treating the place whenever you want to.
If you do feel the need to do an inspection—whether for a suspected lease break or maintenance concern—give your tenant plenty of notice and schedule at a time convenient for them.
#14 Exercise compassion.
Even great tenants can have bad days.
If someone needs a few extra days to pay rent or has a friend on their couch for a couple weeks, tapping into your compassion is an important part of being a great landlord (and human)! We should be compassionate for the sake of being compassionate, obviously. But your kindness will also be remembered come lease-renewal season!
Obviously, you’ll want to have clear boundaries so you’re not taken advantage of—especially if you’re the bleeding-heart type. Decide on those boundaries ahead of time, so you don’t have to make snap decisions when confronted with a tearful tenant.
For example, are you OK with a late rent payment if they give you heads up? If so, how late? And how far in advance should they notify you? And how many times will you accept a late payment?
We bet you have it in you.
Do you check off all these boxes? We’d love to help you with the next steps! Book a Discovery Meeting to chat with us about your dream investment property!
