Looking for ways to protect your real estate investment from a distance? These strategies will help:
1. Stay current with your Buy-to-Let mortgage
A Buy-to-Let mortgage has higher interest rates and more fees than a standard mortgage, so make sure you stay on top of your payments. Don’t risk going into foreclosure. Plan ahead for how you’ll cover the mortgage when tenants are late with the rent, or your unit is vacant. If you default on your mortgage, you won’t have a property for long.
2. Tighten up your pet policy and get specific
If your pet policy is generic and unspecific, tenants might be tempted to push the boundaries. For example, if your pet policy allows only “caged animals,” a tenant might put an unapproved animal in a cage to comply.
Instead of setting general rules and restrictions based on how animals are housed, get specific about which animals are allowed or not. Property management company Green Residential recommends a ban on birds, ferrets, and rabbits.
Birds won’t necessarily damage your property, but they are noisy and will irritate other tenants. Rabbits are cute but destructive. They don’t do it on purpose. Their teeth grow for their whole lives and chewing is how they wear them down. Rabbits allowed to free roam only for fifteen minutes per day can do severe damage to walls, baseboards, cabinets, doors, and floors. Ferrets are also active chewers, but unlike rabbits, they will mark your property with a terrible scent that smells almost as bad as a skunk.
3. Set high standards during tenant screening
Cut off an entire class of potential issues by setting high standards when screening tenants. For example, don’t make exceptions for low credit scores, and don’t allow tenants to make payments on their security deposit. Unless you’re asking for triple the rent, a tenant who needs to make payments on a rent-equivalent security deposit is probably living paycheck-to-paycheck.
Not being able to pay the security deposit up front is an indication they don’t have any money in savings. At some point, they’ll be late with the rent or might not be able to pay at all. It’s not worth the risk, so raise your standards and don’t make exceptions.
4. Keep your tenants happy
Tenants will move if they’re not happy where they are. How you interact with your tenants has the power to influence their satisfaction.
Check in with your tenants once in a while to ask how things are going, or if they need something. You don’t need to call them every week, but if you haven’t heard from them in a month or two, give them a call. Show them you’re around to help and you’re committed to their satisfaction and wellbeing.
Respond to tenant requests as quickly as possible. If it’s not an emergency and you need time to take care of their request, respond right away letting them know you need some time to work out the details. Don’t leave them hanging with a broken stove until you can connect with the repair company. Communication goes a long way.
5. Hire a property management company
Hiring a property management company makes it easier to keep your tenants happy and accomplish all your landlord duties. For example, a property management company can take care of everything for you from the ground up including tenant screening, background checks, credit checks, maintenance calls, and inspections. If you don’t have time to waste, let a property management company do everything for you.
6. Perform renovations
How can you improve your property so it appeals to more potential renters? You might want to redo the landscaping or plant a garden in the backyard. You might redo your siding or change the interior lighting to something suitable for reading and relaxing.
7. Be accountable for your actions and words
Tenants expect you to hold them accountable for things like late rent and intentional property damage. Be responsible for promises made to your tenants, and acknowledge mistakes whenever you can. For example, if you’ve promised a tenant you’ll fix a broken screen on the bathroom window, and you’ve been too busy to make it happen, apologize to your tenant. Set a specific date and time you can commit to, and honor that appointment. Show your tenants you are accountable to your word.
A well-maintained property can be a fantastic source of cash flow when appropriately maintained. It’s also your responsibility as a landlord to provide a safe and habitable space for your tenants to live. Stay in integrity, follow landlord-tenant law, and resolve any issues before they get too big.
