Read an Excerpt
The Top 10 Ways to Be a Successful Landlord
Excerpted from The Weekend Landlord, 2E by James A. Landon ©2007
1) Require a complete rental application
Many tenancies do not have a happy ending. Perhaps the tenant needs to be evicted, or a landlord discovers extensive damage to the dwelling after the tenant has moved. In the event that a tenant leaves with money owed, the original rental application becomes very important. A landlord stands a much greater chance of recovering money owed if the application includes accurate Social Security number, date of birth, employment, income, reference, and nearest relative information. All of this information can help landlords in their efforts to recover past due amounts from a former tenant.
2) Inspect a dwelling before a new tenant moves in
Failing to properly document the condition of your property before your tenant moves in can adversely affect your ability to demonstrate that a tenant is responsible for damages caused during a tenancy. If you have not documented the condition of the property prior to move in, how can you prove that the tenant caused the damage? Shooting video, taking pictures, and keeping thorough notes of the condition of the property prior to move in greatly enhances your chances of recovering for damages caused during the tenancy.
3) Always obtain the forwarding addresses of your tenants
There are a couple of reasons that a landlord should always obtain this forwarding address information: 1) to ensure that there is an address to send information regarding the tenant's security deposit, often required by state statutes; and 2) to give the landlord the tenant's new address in the event the landlord needs to pursue the former tenant for money owed in excess of the deposit.
4) Inspect the property during the course of the tenancy
Although the tenant occupies the property, the landlord still is the owner. Therefore, it is in the landlord's best interests to regularly inspect the property. Even though the rent may be paid on time, tenants may be damaging or neglecting the property, and this can cost the landlord far more than a month or two of unpaid rent.
5) Insist on a signed agreement as to the date that the balance is due when accepting a partial payment
The temptation to accept past due monies from a tenant is understandable, even if it is not the full amount due. If you accept partial payments, however, it is always a good idea to document the amount of money received, and have the tenant sign the document specifying the date that the balance will be paid. In many jurisdictions, a landlord will be forced to wait until the following month to bring an eviction action if he or she has accepted a partial payment without a written agreement regarding the date that the remaining balance is due.
6) Be familiar with local and state landlord/tenant and fair housing laws
Quite often, inexperienced landlords unknowingly and unwittingly violate local, state, and federal laws without having any idea that they are doing so. Such violations can be costly, so landlords need to keep abreast of the current laws to the best of their ability. There are numerous ways in which landlords can keep current with the law, including the Internet, library, and secretary of state-not to mention having an experienced landlord/tenant attorney to contact in a pinch.
7) Be familiar with market conditions
Market conditions exert a great deal of influence over residential rental properties. These conditions affect such things as the amount of rent that is attainable, the value for sale of any rental property, and the long-term outlook of a rental property as a potential investment. It is of great benefit to always keep up with your local market conditions. Periodically research advertised rents. Drive around and see what types of units are available, and what the asking price is for those units. Periodically check the asking price for available properties similar to yours. All of this research, which will encompass a minimal amount of time, will pay dividends down the road.
8) When it is time to hire an attorney, hire an attorney
A primary purpose of this book is to provide landlords with the information necessary so that retention of an attorney is unnecessary. Sometimes, however, landlords do get in over their heads, and it is important to know when it is time to step back, evaluate the situation, and realize that you need professional guidance or representation. If you get to the point where court action seems imminent or inevitable, it is probably time to give a landlord/tenant attorney a call.
9) Whether or not you think your tenant is entitled to any return of a security deposit, account for that money in a security deposit reconciliation statement
Many landlords want nothing to do with their former tenants, particularly if they believe that those former tenants have caused substantial damages to the property. Even if you believe that your tenant has committed damages that far exceed the security deposit, account for the deposit and those damages in a written deposit reconciliation statement. Many states contain statutes harshly penalizing landlords for improperly accounting for security deposits, particularly if a judge finds that monies have been wrongfully withheld. Therefore, even if you are absolutely convinced that a tenant has no right to the return of any portion of the deposit, account for those monies anyway.
10) Keep tabs on your property manager
One of the reasons that you might hire a property manager is on the presumption that the property manager is well versed in the law, and better able to protect your interests. You may be right. However, property managers are not attorneys, and the burden of any mistakes will primarily fall squarely on your shoulders. Keep in regular contact with your property manager and review your client records often. Regular contact allows you to help your property manager do his or her job most effectively.