Although current market conditions in many parts of the United States are making rental properties more affordable to more people interested in real estate investing, individuals must determine whether they are up to the challenges of being a landlord.
Being successful as a landlord requires familiarity with the laws, ordinances, and regulations that apply where a rental property is located. Yet, what makes many individuals with no experience as landlords hesitant about entering the residential rental market is the fear of dealing with tenants and their problems. While this is a legitimate concern, it is also necessary to recognize that there will be dealings with government authorities and craftspeople who will be working at the properties.
Landlords Need Basic People Skills
Some people have the innate ability to get along with others while still getting what they want; other people are clueless about the subtleties involved. Fortunately, most individuals can develop their people skills to the level needed to be effective landlords.
Tenants: As the ones who supply the funds used to pay the mortgage, maintain the property, and generate a profit, tenants are the clients of their landlords. What landlords need to understand about tenants is that most of them merely want a decent place to call home, to pay their rent, and to go about their lives; most tenants prefer to have minimal contact with their landlords. Of course, there are “high-maintenance” tenants who either constantly complain about perceived problems or who are a nuisance to the landlord and other tenants due to their lifestyles and behavior – by being filthy, engaging in illegal activity, or throwing loud parties, for example. By choosing tenants in a deliberate and cautious manner, landlords can avoid most of these types of headaches.
Nevertheless, problems will occur even with good tenants. The appropriate approach by investors in rental properties is to view tenant problems as resolvable and temporary, even if it sometimes takes a while to abate certain conditions, such as vermin infestation. To make the landlord/tenant relationship work, a landlord needs to be even-tempered, courteous, and fair with the tenants without becoming a “pushover.”
Government officials: By definition, these people are charged with the safety and well-being of members of their constituent communities. Government officials carry out their duty by administering the statutes, ordinances, and regulations that prescribe the minimum standards of sanitation, habitability, and security that landlords must meet with regard to their rental properties.
These standards and the way they are administered and interpreted may seem burdensome at times. Nonetheless, landlords who strive to meet the prescribed standards will avoid unnecessary fines, government intervention, and court appearances. However, if the enforcement of a standard seems arbitrary or unreasonable, a landlord should not hesitate to speak up. For instance, if a code enforcement officer issues a citation for failure to recycle at a two- or three-family property, when in fact the recycling bins go on the curb only when they are full, the landlord who can document this may be able to defeat the citation in municipal court.
Craftspeople: Contractors and handymen offer services in return for payment. In other words, dealing with them means engaging in a business transaction. Landlords who want to avoid feeling cheated and dissatisfied with the services rendered must chose their craftspeople carefully, preferably on the basis of recommendations from other property owners. Moreover, the services to be performed and the costs involved should be spelled out clearly in a contract.
Landlords are Business People
Most important, landlords must remember that they are engaged in a business. Therefore, to succeed, landlords must act in an unemotional, business-like manner at all times, regardless of the status of the persons with whom they are dealing.