Success as a Landlord- Leadership: Owners of Residential Rental Properties Must Be Assertive

Investors in apartment buildings, single-family homes, duplexes, and other residential properties are landlords. The aim of most landlords is simple: to have tenants who will treat their units like homes they cherish, pay their rent on time, and not be a nuisance to others. That simple goal eludes many novice landlords because they fail to establish their authority over their properties.

Selecting Tenants: Avoid Cash-Flow Erosion, Landlord Burnout

The proper selection of tenants is one of the most important responsibilities of a landlord. To carry out this duty, a landlord must have clear selection criteria and a legal and effective screening process. Shortcuts in this process can result in future problems and misunderstandings with the tenant. This may include expensive and time-consuming court proceedings, which in turn can erode cash flow and contribute to landlord burnout.

Informing Tenants: Strong Lease, Clear Rules

Landlords should use well-drafted leases and rules (the rules may separate or included in the lease) that put the tenants on notice of the course of conduct that is expected of them. For example, the lease should state when the rent is due and how it is to be paid. The rules may specify that the use of illegal narcotics on the premises by anyone or that loud music or noises after a specific hour can lead to eviction procedures.

Notifying Tenants: Following Landlord/Tenant Laws

Landlord/tenant statutes in the United States are written with the view that landlords enjoy a stronger bargaining position than their tenants and, therefore, that leases favor the landlord over the tenants. To level the playing field, the laws of each state specify, among other things, the types and timing of written notices that landlords must give their tenants about lease infractions and eviction proceedings. Landlords who fail to follow these specifications needlessly surrender their legal standing and risk seeing their cases thrown out of court.

In many states, after buying a rental property, a landlord is obliged to advise existing tenants in writing that the ownership has changed. This type of letter also should inform the tenants how to contact the landlord (or property manager), where to send or make the monthly rental payment, where the security deposits are being held, and how to request repairs.

Sometimes, a tenant may test a new owner by not paying rent, paying it late, or making unreasonable demands for upgrades. Perhaps the previous owner had been too timid to confront the tenant about such conduct. To avoid becoming the tenant’s “doormat,” the new landlord must swiftly and unequivocally show that he or she does not tolerate unreasonable demands and the lease being breached.

By applying the lease terms and rules to all of the tenants and by using a system of written notices, landlords demonstrate that they are in control and that no one receives special treatment. This is an effective business practice because it encourages good tenants to stay and bad ones to move.

Landlords Lead by Managing Tenants

Smart investors manage their investments; they do not allow investments to manage them. This is equally true for investors who are landlords: smart landlords do not allow their tenants to dictate how to run their properties.

Demonstrating control of a rental property does not mean being authoritarian, offensive, or uncompromising. It does mean acting like a leader, setting the tone of a tenancy, and enforcing lease terms and property rules in a consistent, even-handed manner.

Manage a Vacation Rental Property: Maximize Profits by Managing Your Own VRP

It may seem daunting to manage a vacation rental property from hundreds or even thousands of miles away. It’s tempting simply to turn over the management of the property to a management company. But those companies typically take a large cut (often 35% or more) of any rental money earned by the VRP. Many people rent out their vacation homes as a way to make having a second home affordable; the large cut taken by management properties often changes the math so substantially that it may no longer be financially possible to own that dream vacation property. Luckily, it’s fairly simple to manage a VRP and keep all the profits.

Find a Trusted Cleaner for the Vacation Rental Property

The hardest part of managing your own vacation rental property is finding a cleaner who will not only do basic cleanin, but who will also do the chores that are critical to the success of a vacation rental property. You’ll need a cleaner who will:

  • Clean all surfaces.
  • Launder and change linens.
  • Wash and put away any dirty dishes left out.
  • Keep track of stock of cleaning supplies (like toilet paper, paper towels, soap, and any other amenities provided at the property).
  • Let you know if there’s any damage to the property.

The best place to start looking for such a person is by asking the Realtor used for the purchase of the vacation property. Very often he or she will have a few names to recommend. If that fails, try posting an ad on services like Craigslist. Always interview the candidates, preferably in person, and select a licensed and bonded professional. Be sure that there is good rapport and communication. This person will play a critical role in the success of managing a vacation rental from afar.

Effective Advertising of the VRP

  • Once a suitable cleaning person is found and the property is well furnished and ready to rent, it’s time to advertise. The HomeAway corporation has recently bought many of the vacation rental by owner portals out there. This makes it easier to advertise on their multiple portals, like VRBO.com, Homeaway.com, and CyberRentals.com. Listing on these portals is worth the investment; you’ll make back the cost of the listing with the first rental, and you’ll secure far more business with the listings than without.
  • Another valuable (and free!) source of advertising is Craigslist.org. Post an ad every couple weeks.
  • Be creative. Is the property near a ski resort? Ask to put up a flier on the bulletin board in the ski instructors’ lounge. Have the perfect spring break spot? Advertise on the local college campus.

Regardless of where you advertise, post as many pictures as possible. Renters love pictures, and the better they feel they understand the property, the more likely they are to book.

Respond to Inquiries Promptly

This is critical. Answer the phone. Answer emails. The faster you respond, the more likely you’ll be to secure a booking. Often, the potential renter fires off several emails or phone calls to VRBOs in the area. Responding quickly inspires confidence, so be attentive.

Accept Credit Cards

Renters love having the option of being able to pay by credit card over the phone, and it’s the best way for you, as a business owner, to quickly, efficiently, and dependably get payment. It’s also valuable if there’s ever damage to the property; there’s no argument and haggling with the guests, the amount can simply charged to the card on file. Accepting credit cards is one of the best ways to run a vacation rental property smoothly.