Personality Traits of a Successful Landlord
Guest post by George Matthews of Hometech-UK
If you’re looking to make quick money, then contemplating a career as a landlord is something that you may not be quite ready for.
Despite widespread perception a career as a landlord is much harder than some may think and isn’t quite as simple as buying a house, finding a tenant and letting the money roll in, you will never be short of a few issues that need your attention and finance.
Always be mentally aware that the probability of this career taking you away from family at the drop of a hat is very likely! But always remember it's a part of the process of eventually achieving financial freedom.
Once you’re a landlord and decide it's time to rent your property then be aware that you are at the mercy of the current property market and the market can be cold! So, you will have to be mindful of the fact that you might not be in for the smoothest ride.
Property Investment is not for short term gain; property investment is a long-term commitment that can be a battlefield of stress! But if you do play the property game correctly you can set yourself up for a long and fruitful career; it’s a learning curve just like anything else.
Property investment is not a ‘get rich quick’ scheme, all though It is possible to make your millions there are a lot of lessons to be learned! And you need to get the ball in motion before that milestone gets within arm’s reach.
The scariest thing about starting out as a landlord is the feeling that you’re out of your depth and facing that you are about to invest an awful lot of money in something you might not know much about, so doing lots of your own research before making any decisions can be imperative. Play it safe.
Being a landlord is a very personal job and what that means is that you will be dealing with people all of the time, so having the right personality traits can determine whether you’re successful or not.
- Do you have the stomach for it?
An important aspect of being a successful landlord is having a strong stomach and the right personality to get the nasty jobs done, what I'm talking about you may never have to do if you have good tenants but if your circumstances are different than having a strong stomach to do the right thing is crucial.
I have heard stories after stories of landlords being too frightened to evict tenants and in the process, lose small fortunes and then slowly get into debt themselves, well like anyone landlords do have hearts and feel genuine emotion if it comes to the point of having to evict a tenant if they fall into arrears, but after all you should always remember you are running a business and business isn’t always friendly.
If you show weakness at the beginning, it's possible that a rogue tenant will take advantage of that and you’ll soon become a walking target.
Showing that you have a heart is fine just don’t get walked over.
- Excellent social skills
Renting out a property is just a small part of being a landlord. Being a landlord is a people business, you’ll be dealing with tradespeople, agents and tenants on a regular basis.
A successful landlord is a master of communication, answer any questions your tenants have quickly, address concerns thoroughly, inform tenants of important dates with plenty of notice such as maintenance checks and inspections.
Tenants love being kept in the loop, remember the property may be yours! but they are living in it!
Form a good relationship with your tenants from day one and that will heighten your chances of retaining them and having prospects referred to you.
You can’t beat probability. Eventuality dictates that soon enough you will end up with a bad tenant and you will have to deal with them in a professional manner which requires patience. Evicting a rogue tenant can be a long and tedious process, so being patient is imperative.
A good tenant is the key to a successful tenancy, many landlords quickly place themselves at the top of the food-chain and develop an alpha male complex by looking down on their tenants, which is a recipe for disaster. Good tenants are precious, and that’s why mutual respect is required.
If a tenant falls into arrears, the worst reaction a landlord can have is to lose all sense of rationality and begin demanding money, take a step back and assess the situation before making any sudden movements, understand your tenant's situation and come to a solution that suits both of you.
Tenants are not just paying you for the privilege of living under your roof; They are also paying for a service, and a part of that service is maintenance and cosmetic repairs around the home, If there is a maintenance issue that needs attention ensure you resolve it quickly! a good tenancy isn't completely down to the tenant, you have to do your part to make them want to extend the agreement.
As hard surface repairs company Hometech-UK handle domestic repairs every single day and some of the most common jobs we are sent are the following:
If you’re going to be managing multiple properties then cosmetic repairs will eventually become a regular occurrence, you then have two options take on the repairs yourself or contract a company to handle them and save yourself a lot of stress.
Keeping organised is an absolute must for successfully managing properties, you will be dealing with an awful lot of paperwork which if you lose track off will only complicate situations further than they need to be.
Some of the paperwork you will need to keep your eye on range from
- Rent payments
- Property taxes
- Tenant screening forms
Using cloud-based software to store your documents can help you stay organised and keep your files in order, by doing this you will be able to access your files from wherever you are without having to go through mountains of paperwork.
If there is a problem with your property, never ignore your tenants! They will lose respect for you fast, and the chances of them extending their contract with you will be very slim.
The most successful landlords are action-orientated people if they have a matter to attend to they deal with it.
Being a landlord is a customer service job! The happier the customer, the more likely they are to use your services again (or in this case rent your property for longer).
- Attention to detail
Being attentive to detail is not only important in this industry but is a huge part of any job.
If your investment is going to return the highest possible ROI then you must always keep in mind that the small things are just as important as the big things.
- Appropriate Distance
Tenants like to-be-kept in the loop, but they don't want to hear from you all the time, only contact them when you really need to, it's common courtesy to show that you're interested in someone's life but never get too involved, no tenant likes a landlord peeking over their shoulders.
Property Investment can be a tricky career when you’re first starting out but ensuring you have the right personality traits to go along with the human interaction aspect of the job will make it all the more less stressful.
The Property Voice Insight from Richard Brown
I watched the TV programme, Nightmare Tenants, Slum Landlords just last night. One landlady on the programme had a very distressing situation, both for her and also for her tenant, as it lead to an eviction. Long story short, the landlady finally decided that being a landlord was not right for her and she decided not to re-let the property after spending thousands restoring the property, lost rental income and threadbare nerves resulting from the whole experience. It is not for everyone you see!
This is a really great article that features so many of the essential qualities and characteristics required to be a landlord. Some can be offset to some extent, for example by having a letting agent or property manager in-between you and the tenant. Still, many of the issues will arise sooner or later over the average 17-year holding period of a BTL property.
I would add these two key points to the list. First, treat property investment as a business operation and second, remove the emotion from your decision-making as far as is possible.
Many of the tips above deal with these points to some extent in any event, however, I would develop a set of guiding principles and criteria to help to put this into practice as much as possible. Don't forget to listen though, as sometimes rules are meant to be flexed...if rarely broken!
I can give a couple of examples here myself just dealing with rent arrears.
On one occasion, a tenant was late paying the rent. I spotted this before the agent did as I had a system to flag it up (business system!). I insisted that the tenant was contacted, that we understand their circumstances and once known we set up a plan aimed at getting the rent back on track over a couple of months, as that was reasonable in the circumstances. We stayed in contact, the plan worked and things ran a lot smoother for the remainder of the tenancy after that. I was not emotional, although I was considerate in dealing with the situation. In the end it worked out well for all of us.
In another different situation, I was offered a tenant that did not meet my normal criteria (I had some guiding principles!). I went with my heart and to cut a long story short, the tenant eventually left the property owing a couple of month's rent, even the CCJ I eventually won was ignored and unpaid leaving me out of pocket and them with an impaired credit rating. I broke my own rules by being too emotional on this occasion, choosing to believe that these good people would make the rent payments OK despite not having solid work in place following a relocation. I was wrong and got burnt!
As an aside, I have taken on other tenants who technically did not meet the rental affordability criteria but on these occasions they already had a job and came with a personal recommendation. I was able to flex my rules here without fully breaking them.
Finally, consider the difference between being a landlord and an investor. Some aspects and responsibilities of owning a rental property cannot and indeed should never be avoided or delegated fully. However, many aspects can be passed across to somebody else to manage on our behalf, provided we have an element of supervision and certain checks in place. This helps to make our investment more 'passive' in nature, although as I have spoken about before, NO investment can be 100% passive in reality. That said, an investor makes money work for them using property as a tool, whereas a landlord works a property to make money for them. The distinction can sometimes be confusing, but if you have a more hands-off approach, then being an investor rather than a landlord can lead to less stress and a more enjoyable experience.
Maybe the subject for a different day and a little too far off track for now, but keep this in mind...do you have the mindset of a landlord or an investor? Knowing the answer to this and then acting on this can be liberating I can tell you!