Welcome to the ABCs of property management, where we break down the fundamental aspects of successful residential property management. Whether you’re a seasoned landlord or just entering the rental market, understanding these basics is key to achieving positive and fruitful landlord-tenant relationships, and a successful investment experience.
A: Rental Applications
Qualifying tenants can make or break your real estate investment experience. For Landlords who’ve gone all-in, investing their life savings, relying on their investment property to retire, or trying to create generational wealth, a bad tenant can drown them.
Key Tips to Qualifying New Tenants
- ALWAYS require detailed credit reports, and always get written permission from the tenant to run your own credit check –while a tenant-provided copy is great, pulling your own secondary report as the last step in the process will provide insight into if their copy was legit or fraudulent.
Just yesterday, we had an applicant who openly told us they have bad credit, and that’s why they didn’t waste our time providing one. A poor credit score is not always a reason to deny a tenant. Often, somebody’s poor credit can be attributed to an unfortunate circumstance or life event, and many people in those situations deserve consideration. - Recent and concurrent paystubs are a must. Landlords and property management companies should always require the most recent pay stub and one or two from the preceding pay periods. This assists in verifying that the tenant is actively employed and provides an opportunity to ensure that all of the numbers add up; this is a great way to catch a fraudster with poor mathematics ability.
- Face-to-face interviews are a crucial step. Assuming all the paperwork checks out, meet with the tenant(s) in person or virtually. During this visit, confirm details from their rental application, ask them why they’re moving, why they chose this property, who will be living there, etc. These meetings can sometimes increase your level of confidence in the tenant, or create doubt, which is reason to move on –trust your gut.
For a more detailed breakdown of how to properly qualify a tenant, check out Milton Real Estate Agents’ The Kormendy Trott Team’s blog on how to find the perfect tenant.
B: Budgeting as a Landlord
It’s important to budget for repairs, vacancy, and tenant locating services. Having a slush fund put aside that you can dip into when necessary is important. Owning an investment property can become a costly endeavour if the property is riddled with problems, especially when combined with a high-maintenance tenant.
Recent repairs that we experienced include:
- Ant infestation: $250
- Replace broken mirrored closet doors: $550
- Replace and service an overhead garage: $220
- Replace electrical recetpical: $275
- Exterior recaulking: $1600
- Failed mixing valve (plumbing): $325
Things add up quickly!
C: Communicating with Tenants
We can’t stress the importance of this one enough. Maintaining open communication and fostering healthy relationships with your tenant(s) is paramount to a successful experience. Consider tenants to be your customers, and your property is your product.
Whether handling tenant inquiries
The ABCs of property management lay the groundwork for successful and efficient residential leasing. Stay tuned for more insights into specific aspects of property management that will empower you as a property owner or tenant.
