Landlords invest in real estate for a lot of reasons, but they’re not doing it because they think it sounds like a fun way to volunteer. They’re doing it because they expect to make a profit and turn it into a career, even if it’s only a part-time job. Unfortunately, being a landlord comes with many hidden costs that you don’t always see until you’re knee-deep in higher taxes and property maintenance costs. There’s no way to avoid some of these expenses; it’s the price of doing business. There are ways to cut costs without hurting your tenants’ quality of life, though. Let’s look at three ways to save a little money when you’re a landlord.
Don’t pay for property management tools
We’re long past the days when you needed a gigantic filing cabinet and a full-time bookkeeper to keep track of your properties. In the year 2018, you can find a ton of ways to manage your property digitally. You should still print copies of certain forms so you have backups if you need them, but for the most part, you can save a few trees and a lot of time by going online and finding good property management software.
You do have to make sure you’re getting a good deal on that software. It’s not a good deal if you’re paying hundreds of dollars a month, especially if you can get some landlord software free. Make sure you’re working with a reputable company that has your best interests in mind. You may need to pay a little money for some things, but you shouldn’t have to pay much. If possible, talk to other landlords in the area and find out what kind of software they’re using.
Nurture your relationship with tenants
For the most part, a landlord can’t control why people move. A lot of people want to leave colder states in the Northeast to move to a warmer climate like Florida or Texas, and you can’t promise them the climate will get better if they just stay and renew their lease. That’s not within your control. You can hire an HVAC repair company to make sure indoor conditions are as comfortable as possible, but people will still leave if they’re ready to retire their winter coats and boots.
Once you realize there’s a lot you can’t control about when and how tenants leave, you can focus on what you can control, at least a bit. Every landlord can and should work to build a solid relationship with every tenant. It doesn’t matter if you have two tenants or 200 tenants; you should try to meet each person to learn a bit about them.
Think of tenants like employees. No, you’re not offering them health insurance, and they’re not clocking in and out every day, but good bosses want to hold onto good employees. Sure, you can turn over your apartment every year and charge a little more with every new lease. However, that increases your chances of renting to a problem tenant who will trash your property or refuse to pay their rent on time. Keeping a stable, reliable renter for five years at a slightly lower rent is better than going to court and filing eviction notices every few months.
Consult a lawyer
Speaking of eviction notices: If you don’t have a lawyer, that could very well end up costing you in the long run. It’s easy to misunderstand the eviction process and think you can tell someone to get out within, say, three days. In reality, it’s usually going to take longer. It may take a month or two depending on where you live.
States like Massachusetts are considered more tenant-friendly, which means you should expect the eviction process to be longer in many cases. If you’re managing property in a state like Texas, then you’re in a landlord-friendly locale. You need a real estate lawyer wherever you live. There’s no sense guessing about whether or not something is legal when you’re going through the eviction process. If you guess wrong, you risk financial ruin. Run your plan by a lawyer before you post an eviction notice on the door.