Renting out properties is one of the least pleasant aspects of real estate investing. The rental market has long been known to cause headaches to the landlord and strain relationships that were perfectly workable before the rental agreement was proposed. A person then has to wonder why people still go for the rental properties despite the problems that they bring with them.
Why not concentrate on commercial properties for sale. The answer to that question is that businesses always have to work to spread risk around their whole business portfolio to ensure that if something fails, the whole business does not fail.
Dealing with Tenants
You need to be very clear as to what your expectations are in terms of the conduct of the tenant and their obligations. You also need to explain to the tenant what they should expect from you. If you blur the lines, then you real estate investing project may fall flat on its feet.
There are some landlords who cannot tell the difference between their friends and their tenants. They collect rent when it is convenient for the tenant and generally take a very relaxed attitude to proceedings. This can be an excellent way of building personal relationships but it is a disastrous way of running a real estate investing proposition.
Remember that this is your investment and business and possibly your livelihood so you must take a serious and professional attitude to all matters relating to your property. That way your tenants are more like to respect you and comply with the terms of the rental agreement.
Some landlords decide that the repairs to the property are to be undertaken by the tenant. In clear breach of their responsibilities as landlords, they will allow the property to fall into disrepair. They then start pleading with the tenant to do the repairs or worse still try to bully them. Remember that the tenant is just that. They are paying you a fee for the privilege of staying in one of your properties.
At the end of the day the property is your own and you have to look after it as if it were a valuable thing. The tenant can always move to another property but you will be stuck with it until you can sell it. If it is in bad condition then the value of that property will make you a loss. Therefore you cannot afford to take the no worries approach that a tenant may adopt when it comes to your own property.
Remember that you do not just have to repair. You may also develop your property in such a way as to include business equity that will be useful to you at a later stage.
Diversification is always a good thing especially when you are talking about rental arrangements. Tenants can be diverse in their conduct and if you find a bad one here and there, there will millions of others who will be the exact opposite. If you diversify the kind of tenants that you are taking on, then you can also diversity the problems that they could possibly bring.