As many of you already know, Mr. Mad Money Monster and I are landlords. In fact, I’ve been a landlord since I purchased my first property in 2007. And since Mr. MMM and I didn’t get married until 2015, that means he married into landlordship. Is that a word? In any case, you read that right. The very first piece of real estate I purchased was purchased as a rental property. My plan was to have my parents live in the property and become my tenants. In short, it worked! Until it didn’t. Read on, folks.It worked until my father passed away and the house became too much to maintain for my mother. Those two unforeseen events meant I had to either sell the property (not happening) or turn it into a real rental property with real tenants (AKA people I didn’t know). I chose the latter and the rest is landlord history. Just kidding. Let’s chat a little more about my no so interesting adventures as a tenured landlord!
Becoming A Real Landlord
Making the leap from renting my property to my parents as opposed to strangers was actually a small one. About 5 years ago, my mother was having trouble keeping up with the cleaning that was required to maintain the property. After all, my mom was living solo in my 1,700SF rental after my dad passed away.
In addition to the general size of the home, the cost to heat and cool it was also a drain on my mother’s finances. So, I made the decision to help my mother move into a more appropriately sized apartment and rent my property out to strangers. Yikes!
First things first, I needed a property manager. Now, I must say that I was well aware of the money I was going to lose each month by paying a property manager to handle my house – but I didn’t care. Actually, I did care. I cared a lot. You see, I knew how much I didn’t know. And because of my lack of legal knowledge, I decided my best course of action was to hire a seasoned property manager.
Fortunately, I had a recommendation from a trusted friends who owned rentals. I wasted no time, and soon found myself contracted with a wonderfully detail-oriented manager. The best part – he was well-versed in law and had legally-binding documents. He worked with me to develop criteria for prospective tenants that included a minimum credit score requirement as well as background checks.
Make no mistake, having a property manager doesn’t mean you can brush off any and all responsibilities for your property. You still need to be involved with the management of your property, manager or no manager. A manager just affords you a legal buffer in between. Something that is worth its weight in gold to me.
Finding Real Tenants
Because I decided to rent out my property at the drop of a hat (that’s the way I usually do things), my property manager wasn’t immediately available to start showing the house. That meant I took on the job of walking tenants through the property. I also held an open house that I listed on Craigslist. I was getting a lot of interest in my property and needed to move fast to accommodate all the requests. Interestingly, I found my first set of tenants from the open house I advertised on Craigslist.
Thankfully, my property manager was available after about a week and I was able to shuffle all my applications over to him for all the necessary background checks prior to making a decision.
My Dealings With Real Tenants
After 5 years of being a tenured landlord, I am still loving it and still going strong. I feel I have my wonderful property manager to thank for my experience. And I must say, I love having the buffer between myself and the tenants that the property manager provides. Aside from my initial showings and open house, I haven’t had to deal directly with any of the tenants living in my property.
I’ve heard horror stories about tenants and landlords. Suddenly, tenants will fall on hard times and, not surprisingly, the landlord will allow the rent payments to be late or be skipped altogether. Why? Because it’s hard to stick to a rental agreement when your tenant is on your front doorstep with their children and a hard time story as to why they can’t pay the rent. Introducing…the Property Manager! The property manager gets to deal with all these stories. And, my gut tells me there are less hard time stories when they can’t be told directly to a landlord.
Don’t get me wrong, I know people fall on hard times and there are special circumstances. But, I am providing a beautiful, safe home and I expect to be paid a fair price for that home. And, I expect that fair price to be paid on time. My property manager knows this, as well. That’s why he has exceptions written into the lease that allows for some leeway. But, if late rent payments become a pattern, he will act on eviction. Something I suspect would be hard for me to follow through on as a direct landlord.
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Real estate is inevitably going to need fixes and updates. I was fortunate to have done a lot of updating during my mother’s tenure in the home. Since then, I haven’t had to do any updating, but I have had to outlay some cash to fix a few things. I pride myself on providing a beautiful, safe home for my tenants, so when something goes awry, I aim to have it fixed as quickly as possible.
Case in point, a few years ago the A/C gave out during the hottest week of the summer (of course). I worked furiously with my property manager to find someone who could quickly repair the unit at a reasonable price.
My first thought on pets was NO WAY! But as many of my readers know, I am a pet lover! So, when my first tenants asked if they could adopt a dog after renting from me for almost a year, I gave pause and actually considered it. I discussed it with my property manager and decided to give them a green light.
Surprisingly, my property manager told me he has had positive experiences with “pet people” over the years. He actually said he considers them more responsible than non-pet people, generally speaking. Again, please don’t be offended if you are not a “pet person” and you are responsible. This was just a general observation made by a single individual in reference to rental property management. Nothing more 🙂
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My Quick Tips
- Know your property: You must know the property you’re renting out. Take the time to know where the utilities are and any quirks that might come out. This can save you a great deal of time and money down the road.
- Be familiar with the area: Knowing the area will allow you to appropriately price your property for rent and allow you to forecast who your tenants might be.
- Have a list of contractors and handymen: This is extremely important. Having a list of contractors and handymen at your disposal will give you peace of mind and the ability to make smart decisions quickly when it comes to unexpected repairs.
- Know the laws: If you don’t know the laws you could get burned. Take the time to research the laws where you plan to be a landlord. Make sure your lease covers everything and make sure your house is compliant with all codes.
- Stick to the lease: Your lease is a binding contract between you and the tenants. If a tenant is knowingly breaking the lease, they are breaking their contracted agreement and you have every right to ask them to leave.
- Incrementally increase the rent: Make sure you are charging a fair price for your property. All too often landlords don’t increase rents because they have long-term tenants. Make sure you don’t find yourself with the same tenants for 5 years and $200 under the fair market price.
- Keep your property in good repair: Keeping your property in good condition will attract the best tenants. You want the best tenants.
- Take lots of pictures: Make sure you take lots of pictures of your property before renting it out.
- Hire a manager: Managing a property yourself can be time consuming. And, if you don’t know the laws or foresee yourself having trouble enforcing a lease, hire it out. The small cost to your bottom line is worth your sleep at night.
- Enjoy yourself: If you’re not enjoying yourself, being a landlord might not be for you. Consider selling or hiring a property manager to take over some of your duties.
My Overall Positive Experience
Needless to say, my overall experience with my rental property has been really positive. I have never had a single late rent payment in my 5-year tenure as a landlord. I have also never had a vacancy lasting longer than 2 months.
As far as negative experiences? Not a single one. Now, I know I only have one property and I have only had to deal with 2 tenants so far, but those are still pretty good odds over a 5-year period. So good, in fact, that I’m planning to purchase another rental property in the not-so-distant future.
In short, I haven’t had to deal with a trashed property, overflowing water, bed bugs, fire or anything else. I’m sure that’s partly because I have a quality manager and partly due to luck. But, I’ll take it!
Are you a landlord? Was it on purpose or accidental? Either way, how has your experience been?