It takes a change in mindset and perspective to become a successful rental property owner. Remember, you’re no longer going to be the one living in the house. So while you still own it, it’s not necessarily “your house” anymore. It’s where your paying tenants live.
Here are a few important things you should consider before becoming a landlord in Phoenix:
You Have to Let the House Go
As a rental property owner, your home is now a source of income and needs to be run like a business. Decisions must be made with profit in mind and it can be difficult to make the most financially sound decisions if you’re holding an emotional attachment. So you have to let it go and let someone else enjoy it while you collect the rent checks.
Get Ready for Change
If you want to make the most rental income from your Greater Phoenix home you need to be prepared to make changes. You might love the color of the carpet floors and the bright tile you selected for the kitchen, but since your style is uniquely yours, that might not be the best way to attract potential tenants.
Switching to a more neutral palette and having a more understated design will let potential renters imagine themselves living there and adding their own (lease-approved) personal interior design flair.
Start Thinking Like a Business Owner
Owning a rental property is like running a business. There’s the fun stuff like collecting rent checks and getting income, but there’s also keeping track of expenses, budgeting, and monitoring your rental property’s performance. There’s often a very fine line between making a profit and taking a loss and you have to make tough decisions to keep costs down while maximizing your rental property income.
Unless you’re a skilled handyperson, you’ll also have to deal with contractors and negotiate a fair price when you inevitably need repairs and maintenance performed.
You Must Stay Financially Prepared
As much as you’d like to always be receiving rent checks, every landlord deals with vacancies and there’s a very good chance your rental property might sit empty for a couple of months in between tenants. It’s always a good idea to have a minimum of 1.5 to 2 months' worth of mortgage payments set aside to cover any prolonged vacancies. Of course, working with a Phoenix property management company to quickly find tenants can help to alleviate this problem.
For repairs, there are many ways to budget for them. But, as a minimum, it’s a smart idea to have a couple of months’ rent stashed away to cover the cost of repairs to plumbing, climate control systems, and major appliances in the home. Of course, there are many fixes you can do yourself, but the more money you can have saved to cover maintenance requests, the better.
Being a Landlord Takes A Lot of Patience
Even if you screen a tenant perfectly and everything looks great at the outset, there will likely be at least one or two occasions where your tenant asks to pay rent late or feels like you didn’t do a good enough job making a repair or that you took too long to do it or any number of other complaints.
You’re going to have to deal with some negative attitudes and potential tenant confrontations. But, as a rental property owner, you need to stay calm and professional and handle the situation with a clear mind and without getting involved in any back and forths. You also need to make sure to document any kind of communication and never make promises you can’t fulfill.
In the end, keeping a tenant for more than one lease term is the best way to find rental property success and tenant management is a key component of that.
Know When to Ask For Help
As any experienced Phoenix landlord will tell you, running a successful rental property business is a full-time job and there’s a good chance your phone will be ringing way more than you had anticipated. There are also plenty of decisions to be made and making the right one every time can be very difficult.
However, there is one way to make owning a rental property as simple as you had hoped.
Hire A Property Management Company
Most new landlords plan on handling everything themselves and think that self-managing their property is the best way to get the most out of it. Who wants to pay a fee to a property manager when you can just do it yourself? It can’t be that hard, right?
Well, there are some people who are very successful at self-managing their own rental properties after they get the hang of it. On the other hand, some struggle for months or even years trying to turn a profit on their rental home.
If you’re thinking about renting out your home or purchasing an investment property, do yourself a favor and see what Stratton Vantage Property Management has to offer. You can skip all the headaches and growing pains and will discover that, in the long run, hiring a property management company is the best way to maximize the return on your investment.
After all, in many cases, avoiding one extra month of vacancy because you couldn’t find a suitable tenant can pay for an entire year of property management.
