Landlords - Here's How You Can Reduce Stress in the New Year
Renters Warehouse Blog
Being a landlord can mean extra work –and if you’re not careful, extra stress as well.
This is true whether you have one unit, or have grown your portfolio and now own multiple properties.
Fortunately, though, most of this stress can be mitigated by taking the time to implement good practices from the start. This includes strategies like setting up a process so that you can screen applicants thoroughly, streamlining rent collection, mastering the art of outsourcing and delegating –and having a good team on call that you can turn to when something comes up at your rental.
Whether you’re new to rental properties or you’ve been in the business for a while, there’s a lot that you can do to reduce –or even eliminate landlord stress altogether. With the new year officially underway, now is a great time to take stock of things –and find ways to reach your goals –while looking to reduce your stress and ideally, your workload as well. Let’s take a look at the tips below to find out how you can.
How to Reduce Landlord Stress
- Screen Tenants Thoroughly
One of the best ways to reduce stress as a landlord is to reduce your problems before they even start. This is something that tenant screening allows you to do. By tenant screening, we don’t mean taking their name and number down, and maybe running a quick Google search on them. What we are talking about is implementing a consistent and systematic screening process that covers all of the bases, while also maintaining compliance with Fair Housing Laws.
Here’s how it works. By ensuring that you end up with a qualified applicant from the start, you’ll be able to drastically reduce your workload and stress down the road. You’ll also be able to boost your returns, since securing a good tenant means that you’ll be spending less money (and time) on chasing down the rent, dealing with a broken lease, handling repairs and damage at the rental in between tenants. A good tenant will often stay put longer as well, meaning less downtime in between applicants –and fewer repairs as well.
Screening applicants thoroughly involves having prequalifying questions, as well as running more thorough checks including background, credit, and reference checks. It means ensuring that before you hand over the keys to your rental, you’ll be confident that the people that you choose will be able to pay the rent and abide by the terms of the lease.
Wondering how to find great tenants? Check out: Finding Great Tenants for Your Rentals
- Assemble a Team
Next up, assemble your team. Having a list of trusted contacts on hand can go a long way in reducing stress as a landlord. If you know who to call when something goes wrong, you’ll be less stressed when you get a 2:00 am phone call that the power’s gone out. It is important that you have a trusted network of people that you can count on. Here are a few professionals that you’ll want to have on-call:
- Contractor/Handyman – A good, general contractor is worth their weight in gold. This is the person to call for general maintenance and those practical tasks that fall outside of plumbing and electrical.
- Plumber – A highly-reviewed plumber is another essential contact. This professional will save you from having to wade through…um…messy problems, when the toilet gets blocked up or a pipe bursts.
- Electrician – An electrician is another valuable contact who will be able to help you handle issues with lighting, wiring, appliances not turning on –and more.
- Attorney – A local attorney who specializes in landlord-tenant law is another important contact. You’ll want to have them prepare your lease agreement template and policies for you, or at least, look over the leases that you create to ensure they’re enforceable –and compliant with the law.
Many landlords also outsource their bookkeeping, or accounting (especially taxes), while others outsource routine maintenance –like snow removal or lawn care. Depending on your expertise or level of comfort, you might consider outsourcing one or both of these areas to help keep your stress levels down.
These people will quickly become some of your top contacts when it comes to managing a property. Make sure you have their emergency contact numbers –or the contact information of reputable and highly-reviewed contractors who operate after hours. Knowing who to call will save you from a great deal of landlord stress and being forced to call out unverified “professionals” should an emergency arise at the property.
Looking for help overseeing your rental properties? Read: DIY Landlords: Why You Shouldn’t Be Ashamed to Ask for Help
- Treat Your Rentals Like a Business
Owning and overseeing rental property can be a full-time job, especially once you have multiple properties or rentals that are located out of state. In many ways, it’s like running your own business. Just like with a business, it’s important to be strategic with your goals and procedures. Otherwise, you run the risk of not generating the returns that you’re after. For rentals, this means setting investment criteria from the start, outlining your goals (early retirement, an additional $5,000 per month in cash flow, etc.) and what type of returns you need to generate per property in order to reach your goals ($400 per property, 10% per property, etc.). You’ll also want to determine what you’re investing for –cash flow, appreciation, or both. This will help you to find the best market –and property. Being specific will save you from typing up capital on properties that just aren’t generating the returns that you’d like –when you could invest in something that will help you to reach your goals more effectively instead. When you know what you’re doing, and have a good system in place for investing, you’ll find the entire process of investing becomes a lot more certain and much less stressful.
Looking for a property that’ll generate the returns that you’re after? Take a look at the Renters Warehouse Research Center to see how property in the market that YOU’RE considering checks out.
- Set Your Hours
Just like a business has operating hours, you’ll want to set your own hours as a landlord as well. In most cases, setting aside an hour a day or so to check and respond to your email, arrange for repairs or maintenance, or handle rental-related business should be fine. Make sure you have a contact number for after-hours and specify to tenants that it is to only be used for emergencies –all other requests should be made via text or email (or whichever medium you’re most comfortable with). Keeping your work confined to business hours can help to drastically reduce stress. Plus, limiting your tasks to time blocks –like a one-hour window, means you’ll be working more efficiently as well.
- Keep a Maintenance Fund
Another cause of landlord stress is unexpected emergency repairs that pop up from time to time. You’ve planned for everything, carefully calculated how much money you need to make, and have everything lined up. Then BAM: the roof needs to be replaced or the furnace goes out and you suddenly need to come up with a hefty sum. Keeping an emergency fund or maintenance fund with money socked away for such times can help. Not only will planning on these contingencies help to reduce stress, but they can also help you to avoid unplanned outgoings as well. It’s a good idea to plan on spending approximately 1-3% of the property’s value per year in maintenance and repairs. So try to put away roughly that amount per year in case of a rainy day. For a $150,000 property, that’s $1,500-$4,500 per year, or $125-$375 per month. For older properties or rentals that have maintenance deferred (put off) for a number of years, you’ll need to save more. For newer properties or apartments, 1-2% is a good place to start.
- Don’t Defer Maintenance
While it can be tempting to put off maintenance in the interest of saving a little money, don’t be fooled. Deferring maintenance might save you a few dollars today but it will often result in further, more extensive damage down the road –that’ll end up costing more to repair. For instance, a slow leak in the roof could result in damaged drywall, insulation, and even support beams –or a small plumbing issue could result in a bigger leak –and in some cases, even sewage backing up where it shouldn’t –and neglecting to winterize your pipes could result in frozen and burst pipes. Don’t put off maintenance –instead, be proactive, plan ahead, and make sure things are done when they should be.
- Simplify Rent Collection
While some 70% of U.S renters are still using checks to pay (as of 2017), online rent collection makes life much easier. Gone are the days of manually collecting rent or hearing excuses like, “the check’s in the mail.” You can sign up for an online rent collection service or encourage your tenants to set up automatic monthly transfers with the bank. It’s the best way to collect run and will help to make life easier for your tenants as well.
- Familiarize Yourself With the Law
Another good way to reduce unnecessary stress, and keep yourself out of trouble, is by familiarizing yourself with landlord-tenant laws. This includes federal law, state laws, and local legislation as well.
- Federal Laws – As a landlord, you should familiarize yourself with federal laws such as the Fair Housing Act and the Fair Credit Reporting Act.
- State Laws – Landlord-tenant legislation varies from state to state. This includes laws that govern things such as collecting and keeping security deposits, rent increases, notice before entering the property, the eviction process, and more.
- Local Laws – Local laws are those laws that are specific to your local area. Some areas have specific ordinances, such as rent control laws, that landlords must follow as well.
- Consider Outsourcing to a Property Manager
Finally, hiring a property manager can not only help to reduce stress, it can eliminate it altogether. A property manager will be able to take over all of those rental-related tasks, including tenant sourcing and screening, lease enforcement, and when necessary, even evictions. They can perform inspections and handle maintenance and repairs as well. In many cases, a good property manager can also help you to generate more revenue –since they’ll know the sweet spot to charge for rent that will also help the property to rent quickly –no lingering on the market. A reputable property manager will also be familiar with federal, state, and local legislation –and will be able to oversee your rental in a way that’s in compliance with the law.
Being a landlord can be stressful, but it doesn’t have to be. As a landlord, you can take steps to drastically reduce your workload –and stress with your property. The best option is to be proactive and make a list of all of the things that you’d like to outsource –or things that you can do to help your property operate as efficiently as possible, ideally, with minimal effort from yourself. Then sit back, relax, and wait for the rent to roll in. It really can be that easy.
Are you looking to reduce your stress as a landlord? Consider outsourcing your property management today. Get started with our Renters Warehouse Free Rental Price Analysis, and see how going through a property manager can help to make life easier –and could mean more money in your pocket as well. Let’s get your new year off to a great start!
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