Renting out a house can be a lot of work. Not only do you need to maintain your property, you also manage relationships with tenants and essentially run a small business. If you didn’t plan on becoming a landlord, the job may seem even more challenging.
You’re not alone. Many landlords get their start by accident—they inherit a property or decide to rent out their home after they move. We asked three “accidental” landlords what they wish they’d known when they started.
1. Customize your lease for each property
It may seem easier to use a form lease from a rental association, or one borrowed from another landlord, but if you customize tenant agreements, you can ensure that the lease reflects any unique needs at your property. And it will give you an opportunity to outline your expectations with new tenants.
Carissa Hsieh started renting out her three-bedroom, two-bathroom home in Portland, Oregon, when her partner’s commute motivated them to move an hour away from the city. She had no intention of becoming a landlord when she purchased her property.
She says she quickly learned to make small changes to her lease rather than relying on standard clauses.
“My home has a garden and yard that I want kept up by tenants, rather than paying for a yard service,” she says. “So I added into the rental agreement that the tenants are responsible for garden and yard upkeep with the tools I provide.”
If you’re drafting a custom lease, make sure it includes critical information, including terms, rent, and fees. And make sure the lease complies with local rental rules and regulations. An attorney can help you with this process.
2. Screen tenants
Experienced landlords recommend taking every possible measure to vet prospective tenants. Be sure to ask for credit reports and background checks. Confirm their reported income, and call references and past landlords.
“I tell people to screen potential tenants like you were entrusting them with your life savings, because in many cases that’s exactly what you are doing,” says Dominick Tiziano, a landlord who, during the past ten years, turned his first rental property into a real estate business in Springfield, New Jersey. “Set your screening criteria and stick to it.”
Screening tenants up front will increase the chances that they’ll take care of your property. And (hopefully) having trustworthy tenants will save you future financial problems, upkeep issues, and even legal dealings.
3. Get to know your tenants—and treat them with respect
Once tenants have moved in, it’s in everyone’s best interest to view them not as rent payments, but as people.
“Always treat your tenants with respect, and you’ll receive respect back,” says Tom Nathaniel, who owns five properties in the Detroit, Michigan, area.
Hsieh echoes the sentiment. She says open communication and mutual respect have led to strong relationships with her tenants. Small touches, like sending them holiday cards, can go a long way.
4. Take care of maintenance requests quickly
To maintain a good relationship with your tenants—and ensure your property stays in top shape—address maintenance requests as soon as possible.
Encourage tenants to report problems quickly before they spiral into bigger issues, says Tiziano. “Be available for your tenants, but establish ‘office hours’ for non-emergencies,” he adds. “Provide your tenants with clear rules and don’t give in to requests to make an exception ‘just this one time.’”
Cozy makes it easy for you and your tenants to communicate about maintenance requests.
Consider having a list of trusted contractors, so you’ll be ready for any repair.
5. Treat your rental property like a business
All the accidental landlords we spoke to got into the game because they had property they couldn’t—or didn’t want to—sell. For many people, homes and condos turn into rentals for financial reasons, so keep finances top of mind.
Tiziano advises new landlords to track expenses while looking for ways to cut costs and maximize rental income—from big steps like refinancing your mortgage to smaller ones like charging more rent for a unit with a washer and dryer.
“Not every house makes a good rental,” he says. “Be realistic—if the numbers will never work, then look for an exit strategy, or you’ll get burned out quickly.”
Another tip: Don’t get emotionally attached to your property. It’s your tenants’ home, and treating it as your own will only burn you out.
Finally, don’t go it alone. Reach out to other landlords in your area, join an online community, and turn to resources like Landlordology to learn about how to best run your rental business.