5 Skills a Landlord should have

Good Day! Today we’re gonna talk about the 5 important skills that a landlord should have.

When it comes to renting your property out, so that you’ll be able to experience the returns on your investment, there are some skills that you need to have as a landlord to effectively rent your property. Not just because you were able to have the money to buy the property and you intend to lease it out doesn’t mean that it’s gonna be easy for you.

There are certain management skills that need for you to learn to be applied in this kind of business as well.

Because renting a property is also a certain type of business.

The first important skill is, budgeting.

You need to know how to budget like a business person. When you’re renting a property it’s not like you will never have any upkeep definitely whether you’re renting a property long term or short term, there will be some maintenance expense.

You have to understand what are regular cost are for example, you’re renting a property short term as a “hotel unit” what are the regular costs of keeping your employees? What are the regular cleaning costs? What are the maintenance costs as far as the laundry is concerned? How much do you need to spend for bed sheets that needs to be replace every so often?

Now, if you’re operating on a smaller scale, say for example you’re renting your house out to a certain tenant. You have to be able to answer how much is the maintenance cost of the property? How much are the association dues? How much are the real estate property tax dues? Because if your overhead is like this, and your rentals is like this. Then, why are you even renting your propertyif you’re not really earning anything from it, right?

As a landlord you have to treat your real estate business because it is your business. It is a capital intensive investment, the property that you’ve bought. And if you’re about to rent it out and the rental from your property has to be treated like an income as if it were a business.

So, in running your rental business you have to know the operational cost that will be needed so that it will turn out the correct income for you and you will be able to enjoy its benefits. And if something gets broken inside the unit, the rental of the unit should be able to suffice for the repairs and maintenance of your property.

The second important skill that you need to have as a landlord is, being firm and being flexible with decisions.

I know, it sounds ironic right? How can you be firm and flexible at the same time? Well, it’s not really a question of being at the same time, but it’s a question of when to be flexible and when to be firm.

What do I mean by this?

When you are a landlord, say for example, there are things you can let go of or you have to be flexible or for example you’re negotiating terms in your contract, when do you have to be firm? For example, there are deadlines that your tenant is missing, and it’s been missing it for a month or two, maybe on the second or third month you should be firm on collecting the amount as far as your rental is concerned. Because if you become too flexible on this, and they’re still living in your property for 8 months and hasn’t been paying, then you’re not earning.

Whereas there’s room for flexibility as far as understanding them is concerned, probably missing it for a few days, probably a few weeks, a month or week should be okay. But, consecutively missing it on purpose then you have to be firm, as far as your decisions are concerned.

You have to know when to say yes and when to say no. This is a skill that a landlord needs to have.

The third skill that a landlord needs to have is, attention to detail.

In renting properties out, if you cannot be detailed then you have to hire someone who is. Do you remember which part of the property got scratched before you turn it over to the tenant? Do you remember which tiles are broken before you turn it over to the tenant? What are the flaws in the property that you have to take note of before you turn it over to the tenant? Or have you fixed this ahead of time? Does it look okay but are the pipes really working? Or are we having trouble with the grease trap? Did you mistakenly include the expensive furniture that you should have taken out? So, how do you document these things?

Now, if you’re not very good with the details this is the part where you have to get someone who is. This is also gonna make your life as a landlord a lot easier, because this is where the rules come in as far as dealing with your tenant’s concern.

If the tenant can leave a good word for you after he leases the property out. Most especially if it is a company lease, then you’ll have an easier time leasing your property out in the future.

So, when it comes to creating the contract and taking care of the details as far as leasing is concerned you have to be very, very good with the details.

The fourth important skill that a landlord needs to have is, you have to be good in the legal contract and paperwork.

When it comes to leasing properties in the Philippines it is a common practice for landlords to just borrow a standard template of a contract lease and fill in the details and lease the property out, that’s simple.

Now, this may work in some instances and in simple lease terms. Not every tenant and not every house is the same if you got the standard template for a home here and applied it to your home and say for example, there are threshold for the repair for a home of somebody you got the template from is just Php 5,000 but the furniture in your home is more expensive maybe you just need to raise the threshold of repair to probably around Php 10,000 or Php 15,000 depending on your agreement with your tenant.

But the simple point is this, if you lift a lease contract from another person you just have to make sure that the provisions will fit the lease terms and agreement with your tenant.

When it comes to preparing your contract you have to be very specific about the basic and the little things such as the lease rate, how long is the rental contract? What are the provisions in the rental contract? Are you allowing subleasing? Are you disallowing subleasing? What are your house rules? Can you just barge in the middle of the night and you’ll tell the tenant that the property needs cleaning? No, there will definitely be some things that you have to stipulate property in the contract and this has to be both agreeable to you and the tenant. But for the purpose of this discussion the bottom line here is that the skill that you need to have is preparing the legal paper work, what are the terms and conditions of your lease, and you have to be very good at the details and this has to be agreeable also with your tenant.

The fifth and final skill and I think it is also very important in terms of managing a property is, the ability to do mundane and repetitive tasks.

There are some tasks that a property requires so that it will be kept it a tip-top shape there’s monthly, semi-annual, and annual work that has to be done for the property and you as the landlord should be willing to do these things whether or not if you like it.

There are a lot of things that you have to do on a regular basis so that it doesn’t become problem. For example, you did not clean the grease trap and you just let it go on for let’s say a year, and then after a year the grease trap gets blocked, the whole condo unit smells and then you have a big problem.

So, you don’t want this happening in the middle of the night and then the water there is gonna overflow and then dirty up the kitchen’s spewing bad odor, you know this is a big problem. But, have you had the chance to avoid this by doing regular clean ups in the past, then you wouldn’t have to deal with this problem in the middle of the night from your tenant and then you’re gonna have a tenant freaking out, calling you and worrying about the property that you’re leasing out, right?

So, leasing a property will always involve regular checks on maintenance. You have to make sure that you’re doing this so that you don’t end up with bigger problems.

So, what did we learned today? Today we learned that renting a property is also like running a small business. You need to have some skill, some acuity, and attention to detail and you need to know what you’re doing. You need to able to factor in the cost, the maintenance and there’s some work required and though it is not a daily task most especially for long term rental.

There will always be routinary or maintenance work that you have to be attend to, to make sure that your property is in tip-top shape and your tenant is happy, and your income is continuous and steady.

I hope you enjoyed reading this article and I hope was able to give you more value and insights as far as renting your property is concerned. Thank you for reading and we look forward to seeing you again.