How to be a Successful Landlord

As small business owners, we may from time to time find ourselves in the position of being a landlord. This may be for either residential property or commercial space that we are not occupying for our own business. In either case there are a few simple things that can make being a landlord, both pleasurable and profitable.

If you are leasing out commercial space, your lease is governed by contract law, and whatever you put in the lease will determine what your, and your tenants obligations will be. If you are leasing residential space you will need to abide by the provisions of your provinces landlord and tenant board, and the respective legislation governing residential tenancies.

First, you will need to know if you are going to make money. This is most important if you are looking to buy a rental property rather than if it is a property that you already own. If it is a property that you already own you may just be looking to minimize your expense. Get a real estimate of what your property will rent for and don't skimp on expense estimates. do not buy a property that will consume all of the income in the form of mortgage service costs, taxes, and maintenance costs.

Second, Treat this endeavour as a business, too many small landlords think of themselves as simple passive investors, and this is not an appropriate mindset. Make sure you have all of your legal paper work in order. Also make sure that the property is legal to rent, and have a solid lease. Consider joining a landlords group.

Third, Find the right tenants. Advertising for tenants is very cheap now with the likes of Kijiji, in fact it can be free. You will need three things to ensure that you are minimizing your risk. 1. A credit Report for your tenant, get these from one of the credit bureaus, they can be pulled online by almost anybody these days for a small fee. 2. Employment verification. Call the employer, and don't ask leading questions. 3. Get rental references from past landlords, and give more weight to older references as the current landlord may be telling a rosy story to get rid of a problem tenant.

Fourth. Keep your tenants happy. make sure your budget has adequate maintenance dollars, fix things when they break right away. It costs more to replace a tenant than to keep a good tenant. Always repaint after each tenant, and re-carpet frequently. The better the place looks the better quality of tenant that you are likely to get.

Finally, Take fast action on bad tenants. A single bad tenant can be trouble for small landlords with only one or two units. Take quick and aggressive action to limit damage that can be caused, don't wait for months and hope that things will get resolved, it always costs more the longer you wait. Their are a few tenants that know there way around the system well enough to get a few months free rent which reinforces the need for more than one past rental reference and a credit check.

This article is base on information from the February / March 2011 issue of Money Sense.