Being a landlord can bring a significant amount of stress. For many, owning a rental property was intended to be a way to supplement income or leave the “9 to 5” all together. It can bring a lot of unintended headaches arising from a variety of issues. Even with the added stress, being a landlord provides a multitude of financial benefits and can be a lucrative piece of your investment portfolio.
There are some simple things that you can do to reduce the stress of being a landlord.
As a disclaimer, we do not recommend being a landlord until you have at least $100,000 in profits from your real estate business and have several properties.
Have a thorough application process
The most important factor in a low stress experience as a landlord is to ensure you have quality tenants. By developing a standardized application process that includes a complete application requiring employment information, social security number, and references will weed out some of the nightmare tenants everyone fears. A background check can be done reasonably and is money well spent.
Stop receiving checks in the mail
By collecting rent via auto draft or other methods of automated payment, you will alleviate the need to constantly check the mail and avoid any delay in receiving your payment. The arrival of the rent check, or the lack thereof, brings a huge amount of stress.
In ensuring that you receive the payment on the same date every month, via auto draft, you can effectively budget and schedule paying bills associated with the property. By requiring auto draft, or at least electronic payment, in the lease agreement you can guarantee you tenant will adhere to your preferred payment option.
Properly maintain the residence
At times, you may be tempted to push repairs off until you are more prepared to handle them. Some of you may just wish the issues would just go away. Trust me, they won’t. Often, it is the case that when you let a small repair go unattended, it will lead to costlier repairs or complete replacements down the road. By making repairs immediately you will not only alleviate the stress hanging over your head about the work that needs to be done but you will have a happy tenant as well.
To ease the financial stress of sudden repairs, start and keep a repair fund. It is a good idea to set up a bank account solely for this purpose in which a portion of each rent check is placed into it. Over time, the amount in the account will add up and you will no longer need to draw from your personal funds to maintain your rental property.