Last week I wrote a column about becoming a landlord and the tax implications. This week we look at how keeping your renters happy can lead to being a happier, wealthier and, stress-free landlord. Whether you own or are considering buying a rental property, a condo, duplex, fourplex, or even an apartment complex -- experts say keeping renters happy should be at the top of your -- priority list in order to ensure cash flow.
When buying real estate we often hear the saying "location, location, location," but when it comes to owning rental property, a different mantra applies: "location, service and, value." Happy About Apartment Management is a new book that's touted as the survival guide for landlords. I spoke with two of the authors, Robert Klag, CEO Westlake Realty Group, Inc. and Steven McDonald, GM of Westlake Realty Group, Inc's residential division about keeping your rentals occupied in a buyer's market.
With the big push for homeownership, those investors who either own or are considering purchasing income-producing properties have to wonder if they'll be able to keep them rented.
"Property owners have a responsibility to provide services and value to the residents if they wish to maintain them and keep them for the long term because tenants do come and go for various reasons. ... But if you create value then people don't tend to go," says McDonald.
The first thing that landlords should do is make sure that you have a quality product. This is akin to curb appeal in residential home sales -- whether you're selling your home or trying to attract a tenant, how your property looks from the street will determine if any prospects venture inside.
"You want your property to look good as people drive by it. You want your property management team to be there dressed for success … ready to show an apartment that's rent-ready -- somebody could move right in," explains McDonald.
Filling your rentals is not always an easy task, McDonald warns landlords that they should be patient or they may set themselves up for great future difficulty.
"Don't get greedy or desperate and rent to the first [person] who shows up with cash."
Making renters happy can ensure long-term tenancy and ongoing cash flow. So what does it take these days to make a renter happy? Co-author, Klag says landlords should first highlight the benefits of a home.
"We try to sell the benefit that you can live in a very affluent community that you couldn't afford [to buy in]," says Klag. He says landlords should promote things such as neighborhoods, area schools, and the amenities that are nearby.
Klag says especially when there are lots of vacancies in an area, differentiating your property from the others is a must. He says that can be done in larger complexes by offering various services and building a warm neighborhood experience.
"We feel like if the tenants are friendly with one another and they have a sense of community then it's a little bit more difficult for them to pack up and leave because they feel like they're leaving their friends," says Klag.
In a home, townhouse, or smaller rental complex, keeping the amenities up-to-date will help attract tenants and give them yet another reason to stay in your rental longer. Also, along this same vein, when there are maintenance needs handle them in a timely fashion. Imagine that you were living in the home and the toilet needed fixing -- you'd want that repaired right away. The more diligent and prompt you are the higher regard your tenant may also have for the property.
Just like the stewardesses say, "We recognize that you have choices when you fly and we appreciate your choosing our airline" so, too, do tenants have choices about where to rent. Finding a good tenant will help sustain your cash flow and ease the stress that can often be associated with owning investment properties. For more information or to order a copy of the book, visit westlake-realty.com .
