Image: Tools on a wooden table
I never anticipated that a single phone call from a tenant would completely change the course of my day. It was a chilly April morning in Chicago when I received a call about a malfunctioning furnace in one of my rental properties. With the temperature outside sitting at a mere 10 degrees, it was evident that this was an urgent matter that couldn't wait.
Little did I know that being a landlord would involve dealing with unexpected situations such as this. The unpredictability that comes with property ownership is something I wish I had known before diving into the world of real estate. Reflecting upon my experiences, I want to share six valuable lessons I've learned along the way. These insights will hopefully be helpful to you as you embark on your journey as a first-time landlord.
Lesson 1: Your Impact on Tenant's Lives Is Tremendous
As I scrambled to set up space heaters to prevent the pipes from freezing, I realized that my actions as a property manager could significantly affect the quality of life for my tenants. It was my responsibility to ensure their safety and comfort. I learned that extreme temperatures are not only uncomfortable but also dangerous. Taking care of my tenants not only helps them sleep better at night but also gives me peace of mind.
Image: Technician working on furnace
Lesson 2: Combat Wear and Tear to Preserve Your Investment
Rental properties are investments that experience depreciation over time due to wear and tear caused by tenants and moving. Knowing when to prioritize maintenance over quick fixes can be challenging. However, staying on top of repairs and maintenance can prolong the lifespan of your appliances and reduce the need for costly replacements. By setting the tone for tenants that you value and maintain the property, you encourage them to do the same.
Lesson 3: Plan Ahead for Unforeseen Circumstances
Some aspects of property management are beyond your control. To prepare for unexpected expenses, creating a capital life inventory can be extremely helpful. By logging costs, tracking the estimated lifespan of appliances, and having a contingency fund, you can anticipate upcoming costs and limit surprises. It's essential to anticipate and plan for both expected and unexpected expenses.
Lesson 4: Tenant Expectations are High - Be Prepared
Tenants often have high expectations and rely on you to handle any issues that arise. Even minor concerns may prompt them to contact you for assistance. While you may perceive some issues as trivial, it's important to understand that what may seem insignificant to you can have a significant impact on your tenants' lives. Address their concerns promptly to maintain a positive landlord-tenant relationship.
Lesson 5: Raising Rent Can Have Unexpected Consequences
Raising the rent, even by a small amount, can lead tenants to contemplate whether they should renew their lease or look for alternatives. Tenant turnover involves significant time, effort, and risk. Often, it's more cost-effective to keep existing tenants happy by avoiding unnecessary rent increases. By preventing turnover, you can save time, money, and the wear and tear associated with the move-out/move-in cycle.
Lesson 6: The Second Month's Rent Sets the Tone
The reliability of a tenant can be determined by their timely payment of the second month's rent. If they can manage to make this payment promptly, chances are they will continue to pay their rent on time. To encourage timely payments, provide multiple avenues for tenants to pay, including online methods. Streamlining the payment process removes any unnecessary hurdles and ensures a smoother payment experience for both parties.
Use Landlord Software to Simplify Your Journey
Owning rental property involves more than just monetary investment. It requires your time, energy, and emotions. Before making the commitment, take a moment to consider what this responsibility will mean for your life. If you're up for the challenge, it can be a rewarding way to build wealth while providing homes for others.
But you don't have to do it alone. Platforms like Avail can assist you at every stage of the rental cycle. From listing your property online and screening tenants to collecting rent and managing maintenance, Avail simplifies property management. Best of all, it's free for unlimited units.
Remember, being a landlord is a continuous learning process. Each experience offers new insights and lessons. By applying these lessons and continuously improving your approach, you can become a successful and compassionate landlord.
