A DIY Landlord’s Guide to Minimum-Effort Landlording
To achieve more free time and not be tied to a demanding landlording job, you’ll do yourself a favor by building your systems now.
One of the benefits of being a do-it-yourself or DIY landlord is that you get to choose just how much time and energy you want to put into landlording – obvious emergencies aside, of course. You can be a proactive type of landlord who checks in every other week just to make sure everything is going well, or you can be a total laissez-faire landlord who only bugs their tenants when they don’t pay the rent on time. As long as you only have a property or two under your management, you can get away with that without a lot of planning ahead. Once you have more than a few units, you can still totally live the low-stress landlord lifestyle – all you have to do is minimize your own cognitive load by making all of the things you’re going to have to do on the regular as automatic as possible.
Standardize Your Leases
Each time the number of different leases you have goes up by 1, the number of tiny details you have to keep track of increases by something like thirty to fifty. By putting all your tenants on the same lease (and memorizing that lease), you can answer any tenant’s lease-related questions without having to look up which lease they’re referencing. If you have properties that span multiple states different state laws may require you to have slightly different lease but, try to keep the differences to a minimum.
Standardize Your Policies
A big part of this is standardizing your policies, which is a good idea in the first place. Not only is it less to memorize up front, but if you don’t standardize your policies and two of your tenants happen to talk to each other and discover the disparity, you could get sued for discrimination. But if you get your policies straight and detailed in your lease now, you don’t have to stress about it again until a situation crops up that your lease doesn’t cover (at which point you modify the lease to take that situation into account and keep moving forward). Of course, you can’t put all your policies in your lease, so write them down and keep them easily available and organized. You should modify these as you learn from ongoing situations.
Standardize Your Communications
Start a folder – electronic or physical – of templates that you can go back to again and again for communications that you send out regularly via email or letter. Sit down and devote an afternoon to crafting one really accurate and detailed version of (at minimum) each of the following:
• A “you missed your rent payment, here’s what happens next” communication,
• An “I need to inspect your unit” communication,
• A “Please take care of this issue (and here’s why it’s an issue)” communication,
• An “I’m sending someone out to fix this problem, please let them in” communication,
• A “Your lease is up soon, are you planning on renewing?” communication, and
• A “Notification of rent increase” communication.
Of course, those are hardly the only options, but those are the things that you’re almost definitely going to need several times over the course of the life of a lease, so they’re things that are wise to standardize ahead of time.
Automate Your Rent Payments
There are a host of tools that you can use to allow your tenants to pay their rent online with the click of a button.
Write a Killer Ad for Each Unit and Use It Over and Over
Each one of your units has more or less the same benefits and drawbacks now that it had last year or even five years ago. Sure, every once in a while a big change happens – you decide to renovate a bathroom, or the city builds a swimming pool across the street, or whatever – but if you get one really good ad together now, you should be able to use it with minimal changes for a few to several turnovers before you have to start from scratch. (This is also not a bad time to create a template for future ads if you plan on continuing to add properties to your portfolio.)
Record Processes and Results
Finally, whenever a new situation comes up in any part of your landlording process, you should note what happened, why, and step by step and in as much detail as possible what you did about it. Then note whether your response to the situation was successful or not, and why. The more properties you have, the more you’ll find it unbelievably valuable to have a “trial and error” notebook that can prevent you from making the same mistake twice – or help you make the same successful solution happen again.
By putting the effort in ahead of time to minimize the amount of brainspace you have to devote, you DIY landlord several – maybe even a dozen if you’re super-organized — units without having your brain melt out from under you. But what if you’re not that organized, or you find that you’ve suddenly come into more properties than you know how to handle? Come back next week for the answer!