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Season 2 Episode 3: Effective Tenant Management: Here are 3 lessons I learned from almost a decade of real estate investing.
The first investment property I purchased was 13 years ago in 2006, just after I got in to real estate. I bought it pre-construction from $25,000 that my dear grandmother gave me out of the love of her own heart. She taught me many lessons in business and life, and I love her for that. So instead of buying a new car or travelling, which I really wanted to do back then at a young age, I decided I should invest in to real estate. I will always remember my father saying “if only I kept that condo”. That was probably one of the main reasons that I got started in investing in real estate, which I accidentally fell in to. I had no clue what I was doing at the time. You can read about my story in the first chapter of my “Passive Income” book that you can get at our website at www.broadviewavenue.ca.
Today’s podcast is about how to effectively manage tenants. Here are 3 lessons I learned from almost a decade of real estate investing.
It’s Kenneth Yim, and welcome to Boardwalk Talks, the podcast for real estate investing in Toronto.
How To Effectively Manage Tenants
Real estate professionals discuss the financial implications of real estate investing, but they often neglect to discuss the importance of tenant management and how it contributes to the success of financial growth and stability.
To succeed at growing your wealth through real estate investing, you have to have a steady tenant base paying your mortgage. The whole idea behind investment properties is to have someone paying down the mortgage as your asset is growing in value. Keeping your tenants happy is imperative to the success of your landlord/tenant relationship. Landlords who are effective at managing tenants will rarely have a problem, and essentially have a business partner that is footing a large part of the capital to keep the whole operation functional and will help you build your portfolio.
To ensure success, the first step is to choose a property that will is attractive to renters. Such as picking a neighbourhood that has lots of amenities (such as schools, parks, shopping, transit) and also a good walk score. Doing so will keep your property in demand allowing a large pool of tenants to choose from at all times.
Or maybe you choose to invest in a luxury property, and you take your time to curate a really good tenant.
Once you have a coveted tenant in place, build a connection based on respect and appreciation. Treating your tenants with respect will create a harmonious relationship.
1. Make your tenants a priority
You need to treat your tenants like customers. Make your tenants complaints, issues, and struggles a priority. You are providing your tenants with a home, a home they will fill with memories and where they want to feel comfortable and safe. If you make them happy in their home, and they can trust you to help when needed, they will only contact you when absolutely necessary. They will respect you and trust that you are providing the very best environment for them to be in. This goes a long way when any issues or problems have to be dealt with.
2. Show your tenants your appreciation
As an example, on move-in day, leave a welcome basket filled with treats like wine and chocolates, or move-in basics like soaps, scents, etc., and include a map of the area. This gesture shows that they are not just dollars to you, but that you are doing your best to make them comfortable in their space. When you have a new customer in your business, you show your appreciation with tokens of thanks. So when you have a new tenant, show your appreciation the exact same way. Send a holiday greeting to continue to show your support through the year.
3. Hire a property management
The fourth most important rule of real estate apart from location, location, and location, is that time is of the essence. You HAVE to respond to your tenants in a quickly to keep them happy as customers.
If you find that your day is already filled with appointments and your schedule is always packed, then hiring a property manager is the best way to ensure all issues will be attended to and resolved in a timely fashion. After all, this is supposed to be a passive investment. A property manager that understands the Landlord and Tenant Act and can advise you on legal issues that pertain to various situations that may arise. Once you hire a property manager, you’ll only have one question - why did I wait so long to do this?!
If you want to learn more, visit broadviewavenue.ca, and click on the button to schedule a 15 minute call with us. We can help you build your wealth as a real estate investor. It’s Kenneth Yim, and thanks for listening.