Being a landlord is tough, but with the right skills, the job gets a little easier. It’s never going to be perfect, and it’s definitely not a role fit for everyone, but if you’re determined to own profitable rental properties, here are the top skills you need.
1. Staying non-reactive
One of the most frustrating things you’ll encounter as a landlord is a tenant who can’t be reasoned with or wants to argue with you. Some tenants take things a step further and instigate when there is no existing problem. In these situations, being able to stay calm and non-reactive is a valuable skill. Reacting will only make things worse and can make your tenant even more upset, putting you at risk for property damage.
In a perfect world, you wouldn’t even have to deal with tenants like this. And that’s exactly what Dallas property management company, Green Residential, does for their clients. They take all the stress out of owning rental property and make it possible for investors to be mostly hands-off.
Property management companies are experts at dealing with problematic tenants without fueling the fire. They’ll either swiftly evict someone where legally permissible, or they’ll handle the situation in a professional manner.
2. Stress management skills
Even if you end up with the most amazing, ideal tenants, you’re still going to experience stress. Just managing and maintaining a rental property can be exhausting and you’re going to need a plan for managing your stress.
Sometimes it’s not tenants that cause the biggest problems. Whether it’s a contractor who backs out of a job, doesn’t show up, or overcharges you, there are a variety of things that can go wrong when dealing with third parties. Plan for things to go wrong, because many times they will. Adopting habits that reduce stress, like meditation and going for walks in nature, can help immensely.
3. Basic business management skills
As a new landlord, you’ll need to create a budget for all of your property-related expenses, which can end up being quite a large list. You’ll need to manage multiple fees that are incurred at all different times throughout the year, on weekly, monthly, annually, or other cycles. This might include things like property taxes, mortgage payments, landscaping fees, garbage and sewer services, water, HOA dues, and property repairs.
It’s also crucial to understand the tax implications of owning rental property so you don’t fall behind on your tax obligations. There are many things you need to know before you make deductions because the law isn’t always applied the way you might think. For example, you can’t depreciate the value of land – only a property. You also can’t deduct expenses, fines, fees, or uncollected rent accounted for on a cash basis.
Other critical business skills to have include marketing, advertising, and setting rental rates to be profitable, yet competitive.
4. People skills
You’ll be dealing with people all the time as a landlord, including your tenants and various contractors. Having people skills is a must to maintain good relationships.
Being kind and courteous will go a long way, as will keeping your word, showing up on time, and being reasonable even when others are not returning the favor.
5. Strong communication
It takes strong communication skills to be a landlord because you’ll encounter situations where your tenants will be emotional and you’ll need to cut through that to get your points across. You can’t get through to someone who is upset, so you’ll need the skills to navigate chaotic situations from time to time.
6. Time management skills
Planning your days, weeks, and even months will prove to be one of the most important skills you could ever have as a landlord. Once you start showing empty units, doing walkthroughs and inspections, and running around to handle emergency repairs, you’ll be thankful for your time management skills.
7. Basic legal knowledge
Ignorance of the law is no excuse for violations. Where the courts are concerned, if you violate a tenant’s rights, or don’t follow the law when sending notices, posting evictions, or changing lease terms, you will be held liable if your tenant takes you to court.
You need a basic foundation of legal knowledge concerning state and local landlord-tenant laws to make sure you do everything correctly the first time around.
You’ll never stop learning
Being a landlord means constantly learning new strategies, systems, and methods to be efficient and profitable. The learning curve is steep, but if you stick with it, it will be one of the most profitable ventures you’ll ever pursue.