I’ve been a landlord for 3.5 years now. In that time, managing just a single suite in downtown Edmonton, picturesquely perched as it is atop the river valley and overlooking Victoria Golf Course,i I’ve learned a few must-dos and a few more must-not-dos.
In my time as landlord, I’ve had two sets of fantastic tenants – the type who pay on-time, if not early, and never make a peep unless something is truly urgent – and I’ve also had two sets of truly abysmal tenants – the type who you hear from thrice weekly because “It’s too hot in the apartment” or “The building manager is a racist bitch who’s out to get me” or “It wasn’t me who was waking the neighbours up at 3am with my sex, drugs, and rock ‘n’ roll !” and who you inevitably end up hunting down in court because they thought that signing the papers wasn’t legally enforceable and they could just peace out whenever they damn well pleased. This being the context for this discussion, here are a few tips and tricks I’ve distilled over the years :
1. Don’t over-price your suite ! This is easily the most important factor and the most regularly fucked up. Landlords, like most people, love cash flow.ii As such, particularly in stagnant housing markets, as most of them currently are, and assuming that there are carrying costs and condo fees involved,iii landlords want to maximise their monthly revenue.iv Asking for too much rent, however, narrows your pool of potential prospects and leaves you with only a thin film of people too desperate or too stupid to find a better deal elsewhere.v For as crazy as this advice may seem, I cannot stress enough how important it is. Failing to heed this advice will turn you into a sub-minimum-wage slave labourer. Or a slumlord. One of the two.
2. Find renters with strong roots locally. Renters coming from out of town and looking for a new place a) Don’t understand the local rental market, b) Don’t necessarily understand the local culture, and c) Might decide to get up and go at the drop of a hat, leaving you in a lurch as you try to track them down while simultaneously cleaning up after them and trying to find new tenants. Renters who grew up in the city, have friends and family there, and have stable jobs are highly preferable.
3. Start with a shorter contract. The standard 12 month lease sounds like a sure-fire way to “set it and forget it,” but it can anchor your success to a sinking ship, one who’s always late on rent and who has to be hunted like a dog just to answer a call or e-mail.vi Start with six or nine months to see how you get along. Think of it as a courtship.
4. Bring flowers for your on-site property manager. A handy and helpful on-site property manager is worth their weight in
gold bitcoin. As they form the the first line of defense between you and your tenant should something minor crop up, developing a healthy working relationship with him or her is essential. If you want your on-site manager to jump to the pump for you, and to keep your headaches manageable, a few small acts of kindness and appreciation go a long way.
That’s it, really. Follow these four points and you’ll be well on your way to earning a very modest amount of passive income while someone else pays your mortgage and you bet a significant chunk of capital on the rising tide of impossibly cheap credit and new immigration into your area to fuel your housing market beyond its already ludicrous valuation.
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- Vic is one of the three city-owned courses and the most centrally located among them. It’s also where I first learned to hack it around from tee to green – where I developed the foundation that resulted in the athletic poised stance you (may) see in the header image above (cached).
Starting at age 13, I spent my entire summer down at Vic, getting dropped off in the morning on my parents’ way to work, playing 18, having lunch, and playing another 18 before being picked up on my parents’ way home. By the time I was 16, with a few hundred rounds under my belt, I was shooting under-par.
Since there weren’t many other kids in my position and I was mostly by myself at the course all day, I learned to chat up random adults and carry a conversation for hours and hours on end, a skill that still serves me well long after I’ve found better things to do with 6 hours at a stretch than taking a slow stroll interspersed with thirty-five or so ultra-violent 100 mph+ spinal twists, torques, and contortions. [↩]
- It’s been said that the three most addictive substances in the world are heroine, carbohydrates, and a monthly paycheque, and landlords are hardly immune. [↩]
- My condo fees, for example are fully half of what I take in for monthly rent. Yikes ! [↩]
- Buying and selling condos and apartments carries huge transaction costs and is therefore rightly avoided. [↩]
- This dynamic works quite differently if you’re, say, selling your used car. Selling a used car is a one-time transaction, so you only need someone to bite for a moment. If you price it a bit on the high side, and you’re okay to wait until the right buyer falls into your trap, great. Go for it.
Renting an apartment, however, creates an altogether different type of relationship between buyer and seller. In renting, the buyer and the seller may continue to transact for years. As such, the landlord is greatly advantaged by having as large a cross-section of tenants as possible. Giving yourself the pick of the litter will allow you to separate the lemma from the palea, reducing your future time investment considerably. Yes, you’ll make a few hundred bucks less per month, but unless you like working for $5 per hour, you’ll come out ahead in the long-run. [↩]
- In addition, it’s also worthwhile to meet your prospective tenant at least twice before signing the contract. If you’re a newer landlord, your sixth sense for deadbeats won’t be as finely atuned and you’ll need as much exposure to your new tenants as possible. [↩]