4 Insider Rental Tips Every Landlord Needs To Know
In the landlord world there are a few tips that can help you stay sane and improve your rental house ROI. In this short video, Matthew Whitaker walks you through the four insider rental tips every landlord needs to know.
You can also see the full transcript below:
Hey, I’m Matthew Whitaker with gkhouses.com, and I want to talk to you today about the four insider rental tips every landlord needs to know.
When we first started our company, we tried to take the habits of property management down to as few habits as possible. What were the things that we needed to do to make sure that managing our properties were successful?
So, we were able to get those down to four tips, and those are the four tips that I’m going to share with you today.
1. The first tip I want to share with you today is how important it is to find the right tenant. I think if you had any of the four that you had to get right, this is absolutely the one you need to get right. Finding the right tenant is the most important thing you can do for your rental house.
The right tenant will take care of the home, the right tenant will pay the rent on time, and the right tenant will obey all the rules. Now, how do you find the right tenant? That’s the most important question you ought to be asking. We look at five things when we’re looking at underwriting a tenant.
We look at their credit score
their criminal background check
we do an ability-to-pay, which means how much money do they make relative to the amount of monthly rent
we do a landlord verification
and we also verify that they still have a job
So these are the five things that we look at to make sure that we get the right tenant in the house.
2. Number two is very simply, once you find the right tenant, don’t let them leave. We have a saying here at gkhouses called, “celebrate the tenant” and we want to make sure that we’re celebrating the tenants that are doing the right things.
So once you find that great tenant, you need to do everything within your power to make sure they don’t leave. That means making sure maintenance requests are taken care of in a timely fashion. That means rewarding them in certain situations when they’re doing things right, perhaps a 10% discount on rent once they’ve paid rent on time for 12 months.
When you screw something up, it’s about being transparent with them and making them whole in that situation. That’s called “celebrating the tenant”, and making sure that a tenant doesn’t leave is number two in our list of things you make sure you do.
3. Number three on our list is to prepare for repairs and maintenance. I have never seen a rental home that did not have some sort of repairs and maintenance.
So, how can you budget for the right type of repairs and maintenance? I have a little bit of an insider’s secret. One of the things we found is that the age of the home and how hard the tenant is on it are the two things that affect the number of repairs. So you can imagine a house that was built in the 1930s or a house that was built in the 1940s is going to be a whole lot more repairs than a house that was built in the early 2000s.
Also, the tenant has a lot to do with that. So certain tenants can actually be harder on a house. Now, that’s not something you can necessarily see. I’ve heard of a lot of landlords actually doing a drive-by of the former house that a tenant lives in. That may be something you might look at doing, to see how hard they’ve lived in their previous home. But you absolutely need to plan on repairs and maintenance to be a factor in rental housing.
4. The last thing, and this is to help you avoid burnout, is to manage by systems and processes, and not by the urgent. One of the biggest things I see where rental house landlords go wrong is when they manage by the urgent. In other words, they only fix a problem when the tenant’s calling and screaming, they only go after the rent when the rent’s two or three months behind, and this is the cause of burnout because you’re letting your rental property dictate your actions instead of your actions dictating your rental property. That’s why we’ve set up systems and processes to make sure that we’re constantly collecting the rent, we’re constantly staying on top of maintenance and repairs. That’s the goal, is that you are building the correct habits around repairs and maintenance, the correct habits around collections, managing by systems and processes instead of managing by the urgent. So that’s it. I hope you’ve enjoyed these four tips. If you have any questions, I hope you’ll give us a shout. We’d love to help you get started in landlord renting.