10 Things to Know Before Becoming an Apartment Landlord

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Anyone with a background in real estate will attest to the lucrative nature of investing in a property, such as an apartment rental. But if you really want to reap the benefits of it, you have to have some basic knowledge of what it will take to be your own boss, so to speak.

1. Familiarize yourself with the legalities

The Rent Control Act of 2009, which has been extended until December 2015, lets you know the rules governing both landlords and tenants. This is where you find out how much you’re allowed to charge, when to evict a tenant, and if you get to keep the deposit at the end of the tenant’s lease, among other things. It would also be helpful for you to get a lawyer who will help you understand the laws governing real estate so you’ll know what to do should an issue arise.

2. Pick a good location

There’s a reason why the saying “location, location, location” is popular in real estate. Where a property is located can dictate its price, which means picking an apartment in a prime real estate area will mean you can command a higher monthly rental rate. But this means you have to be prepared to invest more, too. Pick a place that is easily accessible, close to business districts and various points of interest, and is not at risk of flooding or earthquake damage.

3. Keep a list of handymen

As a landlord, you’re expected to take care of some of the repair and maintenance work of your rentals, so it would be helpful for you to know a thing or two about repairing a leaky toilet or unclogging a drain. But for things that are too tricky to do yourself without proper training (such as electrical repairs), it would be better to have a professional you can trust to do the job well.

4. Know how to choose tenants

Screening tenants is essential if you want to make sure you won’t have a problem dealing a tenant later on, money-related or otherwise. Choosing tenants well also ensures that they will coexist with your other renters as peacefully as possible, which should also be a load off your mind. To find out if they’ll be a good fit, ask them to supply you with an NBI clearance, proof of income, and a recommendation letter from their previous landlord (if applicable).

5. Put everything in writing

When it comes down to the nitty-gritty, a verbal agreement isn’t good enough. When striking a deal with the tenant, you have to include it in writing in the contract so it can’t be disputed later on. This way, when they try to question your policies, you can show them the agreement that you both signed as proof of the deal you made with each other.

6. Treat your tenants well…

You need to give respect in order to get respect, as the expression goes. All of your tenants have rights that should be followed, as mentioned in the Rent Control Act of 2009. Act the way you would expect them to, which means adhering to your own rules. Also, just because you own the unit doesn’t mean you can enter the property whenever you want. As long as they’re renting, you still need to knock and be let in, unless it’s an emergency.

7. … but set boundaries

Having a good relationship with your tenants is one thing, but when it comes to the point where you let them slide on “tiny” issues, you’ve officially crossed the line between business and friendship. Being friendly sometimes gets misinterpreted as you letting them walk all over you, which is a no-no. You have to let them know that while you want to keep the peace, you are still the landlord and should therefore receive the respect afforded the role, which means not breaking the no-pets and no-smoking-indoors rules, paying the rent on time, turning down the music after 9PM, and other rules and regulations stipulated in the contract.

8. Be a pacifier

When you throw a group of different people together in one apartment complex, conflict is bound to happen. Problems can range from noise to improperly disposed garbage, but whatever the case, make sure you’re on hand to deal with the problem. Hear out both sides and come up with a solution that both parties will be amenable to.

9. Hire a manager

Not all people are born leaders, and that’s OK. The important thing to realize is you don’t have to do everything. If you think owning a rental and managing it is too much, get help from someone who actually has experience in managing rentals. But don’t be an absentee owner; make sure you’re always updated on what’s going on in your rentals by talking to the manager regularly.

10. Treat your rental as a business

This is probably the most important tip you need to remember. Even if you’re investing in an apartment rental as a side business and not a primary means of income, it doesn’t mean you should take it any less seriously. Remember, there’s a lot of money involved in this venture, so you want to get the most out of it. Read up on tips on being a good landlord (aside from this article), take courses, learn basic maintenance skills, and get a “Leadership For Dummies” book if you want. Once you start organizing everything and setting goals, everything else will follow.