Most people invest in real estate so they can make money. If you purchase a property for a fair amount, and there’s sufficient demand for rentals in the area, you should be able to generate income that exceeds what you have to pay for ongoing expenses.
If you hire a property manager, you could even turn it into a passive income stream, where you barely lift a finger yet enjoy continued operations and a steady flow of revenue.
Most people are understandably interested in making as much as possible out of their investment, which may optimize their ability to achieve even greater revenue generation. Several tactics can help you with this, but one of the most underrated is to be a “good” landlord.
What does this mean and how can you become one?
What Is a Good Landlord?
Let’s start by discussing what it means to be a good landlord. There’s some room for debate here, but most good landlords possess the following qualities:
- Attentive. Good landlords are attentive to their property. They care about the condition of their holdings and are willing to invest time and money into making them better. When there’s an issue with the property, a good landlord takes action as swiftly as possible, and makes improvements whenever he or she can do so.
- Responsive. Good landlords are also responsive. When a tenant reaches out to you with a question or concern, you should respond to the person as soon as you are able. You probably won’t have all the answers or solutions right away, but you should at least acknowledge the inquiry.
- Understanding. Sympathy will take you a long way. If the tenant is financially struggling, sympathize with them. If they complain about a noisy neighbor, express a similar concern. Show yourself to be a caring and understanding person.
- Compromising. It’s a mistake to regard compromise as a sign of weakness; on the contrary, compromise can be an indication of strength. If you’re willing to compromise with tenants, you’ll be able to arrive at more mutually favorable arrangements and resolve any problems faster. Try to meet your tenants partway.
- Appreciative. Finally, good landlords tend to be appreciative. Your tenants send you money every month and most of them will likely keep your property in relatively good condition. Why not send them a Christmas card or an occasional gift basket to thank them for their patronage? It’s a show of good faith that can keep people more inclined to remain in your rental property.
The Benefits of Being a Good Landlord
Why should you try to embody the above qualities as you attract new tenants and manage the property? These are some of the most important benefits you will enjoy:
- Easier conflict resolution. When you treat your tenants with courtesy and respect, they’re going to be much more willing to work with you to resolve conflicts. If you encounter any issues, such as late rent payments or complaints about the condition of the premises, your tenants will be more likely to engage in honest, open conversation with you. Resolving these kinds of problems will result in fewer headaches, more consistent income, and happier, more satisfied tenants.
- Reciprocity. Reciprocity is a powerful social norm. When someone says or does something to us, we have a tendency to reciprocate. For example, if someone wishes you happy birthday and buys you dinner, you’ll be more inclined to do the same for them in the future. If you’re a landlord who always responds promptly and is willing to make compromises, your tenants will respond similarly and promptly and be more willing to offer compromises as well.
- Tenant retention. This is one of the most crucial factors for ensuring profitability of rental properties. Marketing the place and searching for new tenants are both expensive and time-consuming activities, so it pays to retain the tenants you already have, especially if they consistently pay the rent on time. Tenants are much more likely to continue occupying your property if they genuinely like you and regard you as a good landlord. On the other hand, if they’re dissatisfied with your treatment of them, renters will be more likely to disappear, and disrupt your steady cash flow.
- Reputation. Never forget that how you treat your tenants will inevitably dictate your wider reputation. If you always treat them with attention and respect, they’ll be much more likely to recommend you to other potential tenants. Over time, your professional behavior will attract more people to your properties, and ensure you keep them filled more consistently.
There’s no law that says you have to be a good landlord, and it’s certainly possible to make money without following these essential principles. But you’re going to attract more prospects, retain them, collect more money, and suffer fewer headaches if you try to be the best landlord you can be.