Four Things Every Landlord Must Know

Avoid these common mistakes and reach your goals faster!

You’ve heard me talk about putting together a ‘power team’ – an attorney, a mortgage broker, a Realtor, a title agent – that will help you achieve your real estate investing goals. You need these people because they have specialized expertise that you need to succeed.

One person that I don’t recommend for the beginning investor’s power team is a property manager. Why is that? First of all, when you’re just getting started, the property manager’s fee is just another expense cutting into your cash flow. You want every dime you can get to come back to you – so you have the cash for the next deal that will move you towards your goal.

But the other reason is that managing your own properties is one of the best educations you can get. It’s like getting a PhD. from the University of Real Life. Property management is not glamorous – it’s a hands-on business, and you can’t be afraid to get those hands a little dirty.

Property management is really a misnomer – it’s really more about tenant management. Yes, you’ve got to know how to fix your property’s mechanical problems – or know who to call to fix them. But it’s just as important to know how to deal with people who live in those properties.

Bad landlords make one of two mistakes: either they’re too nice or not nice at all.

The first type is afraid of tenants. These landlords don’t want to set (or enforce) any rules, and they avoid confrontation at all costs. They don’t ask for any respect from their tenants, and therefore they don’t get any.

The second type doesn’t get any respect either – but for a different reason. These landlords don’t show their tenants any respect – they don’t respond to calls, they don’t make needed repairs, they don’t keep up with cutting the lawn and trimming the bushes. Tenants are quick to realize that the landlord isn’t keeping up their end of the bargain, so they decide they don’t have to keep up theirs, either.

The good landlord recognizes that property management is a business, and treats it like one. That means taking care of your tenants without being a doormat. And that’s a skill that will help you throughout your life – even when you have so many properties that you can hire a property management firm to do these things for you. Here’s some pointers:

* Be the property manager, not the owner. Tenants don’t need to know that you own the property. To them, you’re the property manager, nothing else. Print some business cards with your name, the title ‘property manager’, your phone number and a post office box address. (You don’t want tenants having your home address.)

Why? If tenants know you’re the owner, they’re going to start asking for things. They may still ask a property managers, but then you’ve got room to blame the ‘owner’. You say the stove is broken and you want a new one? Let me check with the owner on that…sorry, he says he won’t buy a new one, but he’ll send someone tomorrow to fix the old one. You want me to bend the no pets rule for you? Sorry, the owner would fire me if I did that. When you’re the owner and you say that, you’re an unfeeling bastard. When you’re the property manager, you’re just another stiff working for The Man.

* Maintain some distance. Don’t allow yourself to get sucked into your tenants’ lives. This is not the place to develop friendships. Don’t stay for a cup of coffee or a glass of wine when you come by to collect the rent or fix something. Don’t accept invitations to their parties or bring presents for their children. This is a business relationship, and it needs to stay that way. That doesn’t mean you have to be mean or cold – be courteous and pleasant, just keep it professional. If you cross that line, and something goes wrong, it’s that much more difficult to take the necessary action. Just don’t do it.

* Keep up with repairs and maintenance. My program teaches you to allow for repair and maintenance expense upfront. If you can go out and buy an investment property, there’s no reason in the world you can’t take care of it – and if you can’t, you shouldn’t have bought it. You’ve got to do what you’ve got to do to take care of your tenants – remember, they’re the ones putting money in your pocket.

That doesn’t mean that you have to respond to every request – some people expect too much. But when something is broken, fix it or replace it. Do it right away. And follow up to make sure it was done.

* Have a system.

To keep track of all this, you need a system. There’s plenty of property management software programs out there, you can make a simple Excel spreadsheet, or write it by hand on paper. What matters is that you keep track of what’s going on at all your properties, whether you have four units or 44.

List the property address, name of the tenant, their phone number, the rent amount, when the lease is up for renewal, the amount of their deposit, any outstanding balance, and a column for notes. It’s helpful to print the whole list out each month and carry it around with you as a reference. As you add more units to your portfolio, it’s harder to keep track of all this information – and you don’t ever want to talk to a tenant without having all this information at your finger tips. Having the facts in front of you at all times makes you more confident and makes you appear more professional.

Russ Whitney story is proof in becoming financially independent or build a nest egg so you can enjoy your retirement years.If you want to learn first hand from Russ Whitney. Visit us at: http://russwhitney.com/