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SALT LAKE CITY — Owning real estate is a time tested way to grow your personal wealth, and if you are able to hold onto your properties long term, it's a fantastic way to invest your money.
But being a landlord can be intimidating and is not without its headaches. As a real estate agent and investor, I have been approached a lot for advice on being a successful landlord. Here are my top ideas and suggestions when it comes to self managing your real estate portfolio.
1. Screen tenants thoroughly
A credit check is better than a gut check. I use www.rocketlease.com to screen candidates. Don't be fooled by "I'm going to love your property as if it were my own home" claims. Proof is in the pudding.
2. Wait for a better tenant
Don't sign a tenant out of desperation. You'll pay for it in the end.
3. Have a solid rental contract
You can find a lot of examples online. Customize it to meet your needs, but make sure it's in line with your state's landlord/tenant laws. You can also find several services where you can buy a contract ready to go.
4. Don't base your rent off your mortgage
Sometimes it can be significantly more, sometimes rent is less than your mortgage payment. You should not use them interchangeably. Also, the amount of rent you can receive depends on the time of year you rent it out. Do your research.
5. Automate monthly payments
I use www.rentmatic.com which is super easy and affordable. It takes the guessing game out of when you'll get rent for the month.
6. Try to rent during peak seasons
October through January is the worst time to try and rent. Avoid it if at all possible. The best time to rent is during the summer right before school starts. The second right after holidays.
7. Maintain your property.
Wear, tear and problems are inevitable. Get a home warranty. I use First American Home Warranty. This takes care of most problems, for a fraction of the cost. Find a good, affordable handyman. Make repairs timely. Do not delay. This could come back and bite you one day.
8. You will have to wear many different hats
You will have to play realtor, contractor, debt collector, and in some cases, therapist. Be flexible, because this is not a 9-5 job. We've received several middle of the night calls.
9. Approach all communication as if you could potentially be in a lawsuit someday
Keep a record of all communication, such as email, and realize a handshake deal means nothing in the end. Be careful what you say or promise. Try to be professional, even if you are frustrated or angry. Because the most composed person is going to have the advantage.
10. Realize your limits
If this seems too much, consider hiring a professional management company. Maybe you don't have the time or temperament. You may find it is not worth either the stress or the time to self manage. Do your research and hire a good company. There are still financial rewards in holding onto real estate, even if it temporarily eats up your profits.
NataLee Callahan is a graduate of Brigham Young University in Broadcast Journalism. You can reach her at nataleecallahan@gmail.com.
