Being a landlord in 2024 and beyond will require making some changes to how you run your property investment business. Here’s a list of five things every property investor will need to maintain profitable investments.
1. Property management services
Unless you thoroughly enjoy being a landlord, you need property management services. If you have more than one rental unit, you definitely need a property manager to handle your affairs.
Most successful property investors rely on a property manager for at least some services. For instance, GreenResidential in Houston provides a variety of services for Texas property investors.
Here’s a short list of the tasks that a property manager will handle for you:
- Tenant screening
- Collecting and processing applications
- Tenant disputes and other issues
- Emergency calls
- Repairs and maintenance
- Rent collection
- Marketing vacant units
- And more
If you’re like most investors, you don’t want to perform landlord duties – you just want to be a profitable investor. With a property management company, it will be easier to achieve that goal.
2. A plan to manage repairs and maintenance requests
Since you’re required by law to respond to repair and maintenance requests in a timely manner, you need a plan. You don’t have to over-think your strategy, but have a basic process for handling all requests.
For example, create a simple form to fill out when a tenant makes a request. Document the date and time of the request, along with the details in your tenant’s words. Print out emails, take a screenshot of all text messages, and document all phone calls.
How to stay on top of your legal obligation to fix problems
Create a section on your form that tells you how long you have to fix certain problems. For instance, in some states, landlords have ten days to fix most issues and 24 hours to fix major problems that impact the habitability of the unit.
By documenting the date when the issue must be fixed, you’re making it easier to meet your legal obligations and avoid a lawsuit from your tenant.
Have a plan for managing reasonable requests from disabled tenants
You also need a plan to manage requests from disabled tenants. When a disabled tenant makes a reasonable request to modify your policies or building, take your time considering their request. If the request is reasonable, you must legally grant that request or offer an alternative.
Have a plan for suggesting alternatives to tenants who make requests you can’t grant. For instance, a tenant might ask you to install a concrete ramp to smoothly enter and exit their residence. While the request for a ramp is reasonable, you don’t have to pour concrete. You can discuss cheaper alternatives with your tenant.
3. An attorney on retainer
Every landlord and property investor needs an attorney on retainer. There are far too many issues that can’t be resolved without legal counsel.
Landlord-tenant law is complex and courts aren’t always predictable. Some landlords don’t think their tenants have a case against them, but in court, they get pummeled.
Attorneys aren’t just needed when you go to court. It’s in your best interest to consult a lawyer for everything, at least until you get the hang of what’s legal and what can get you in trouble.
Plenty of bad things can happen when you don’t have legal counsel from the start. For instance:
- If you do anything wrong during the eviction process, your tenant can win the right to remain on the property, and it will be nearly impossible to get them out.
For instance, if you don’t serve the notice to vacate according to state law, a judge can make you start the process over. You also can’t use self-help methods to force a tenant out. If it comes out in court that you changed the locks, you’ll probably lose your eviction case.
- You can’t forcibly evict a squatter, even if they’ve taken over your vacant unit or a tenant’s home. You must go through the formal eviction process.
- If you have illegal terms in your lease, your tenant isn’t obligated to follow them.
- If you’ve done anything that can be considered retaliation against your tenants, they can sue you.
You’ll save time, money, and frustration by having a lawyer on retainer to create your lease agreements, advise you on evictions, and help you execute your daily landlord duties.
4. A plan to handle non-paying tenants
There are three reasons your tenants might stop paying rent: they don’t have the money, they don’t want to pay, or they’re covered by another eviction moratorium.
If you think another eviction moratorium won’t happen, don’t be so sure. The economy is in a strange state currently, and people are still losing their jobs. Although the federal vaccine mandate for businesses with 100 or more employees has been put on hold, many businesses are choosing to enforce a mandate anyway.
In light of the eviction moratorium (and several extensions) that lasted more than a year, it’s important to be prepared for another potential moratorium. You need a plan to manage non-paying tenants in all situations.
You need a separate plan for how you’ll handle non-paying tenants under normal circumstances and a plan for managing the same situation under an eviction moratorium.
5. Online rent collection
Rent checks and money orders will soon be a thing of the past. The world is rapidly moving into a digital space where everything is taking place online. Although we don’t have an official digital currency yet, we’re headed in that direction. Most people only bank using digital means anyway, and never even use cash.
To thrive as a property investor in 2024 and beyond, you’ll need to collect rent online. For a small monthly fee, you can get rent collection software that will allow tenants to pay online through an app on their phone.
Profitability in real estate is always changing
Change in every industry is inevitable, and it’s time for property investors to acknowledge the changes in their industry. While most changes are tech-related, some will require patience and extra capital.
Whether you own one property or twenty, prepare yourself for a profitable future with the five items outlined in this article. You’ll need all of these things to stay profitable in 2024 and beyond.