Real Estate properties have long been regarded as a good source of additional profit, especially passive income. As a matter of fact, there are multiple avenues on how to make cash out of your property. This could be by holding it until it appreciates then reselling, by flipping the property, or by opening it for leasing. However, venturing to any of these money-making endeavors truly require a rigorous preparation and the proper skill set to successfully reap the intended outcome of your identified means. For those considering leasing as an additional source of income or to cover your monthly mortgage, Bria Homes will outline 7 tips to be a Good Landlord.
Read Also: 7 Easy Ways to Get Started in Real Estate Investing in the Philippines
Before we give you the 7 useful tips of becoming a good landlord, you must first understand what renting or leasing is and have an overview of the residential renting market in the Philippines. A lease is a contract outlining the terms under which one party agrees to rent an asset—in this case, property—owned by another party. It guarantees the lessee, also known as the tenant, use of the property and guarantees the lessor (the property owner or landlord) regular payments for a specified period in exchange. Both the lessee and the lessor would face the consequences if they fail to meet the terms stipulated in the contract.
In the Philippines, the limited land area and growing urban population caters a perfect combination for the increasing renting or leasing of residential units in the Philippines, especially in the Metro areas like Metro Manila, Metro Cebu, and Metro Davao. In fact, according to a 2015 report of the Housing and Urban Development Coordinating Council titled the Rental Control Study: Final Technical Report, the majority of the families renting residential units in the Philippines were in the National Capital Region. 44% of the families renting in 2012 were in the NCR. That accounts for 680,331 families out of the total 1,545,227.
The report also reflects the economic status of those families renting their homes. Statistically, 82.5% of the 1,545,227 families renting residential units in the Philippines were in a Less than Php4000 per month apartment, and that accounts to 1,274,788 families. As the report further shows, in terms of educational attainment the cluster with the biggest share in the pie of those who are renting were those whose highest educational attainment was just secondary level or high school. That accounts to 547,943 families in 2012.
Read Also: Top Residential Locations in the Philippines
Becoming a Good Landlord
As earlier emphasized, venturing into leasing of your residential units is surely a tough business. As the landlord of your tenants, you are indeed expected by the latter to provide a substantial answer to their queries and deal with the problem that they might encounter, especially at the start of their leasing. Surely, buying rental property and becoming a landlord comes with plenty of stress and responsibilities.
At times, as a landlord, you will have the tendency to view your tenants as walking cash more than being a partner or building a good and lasting lord/tenant relationship. However, creating a good relationship with your tenants and projecting or exerting efforts to be a good landlord has numerous desirable outcomes. It will make working with your tenant on fixing repairs and showing the property to prospective new tenants at the end of a lease go smoother, and your tenants are more likely to renew – possibly even with a rent increase. These are a few of the benefits of having a good, yet professional relationship with tenants.
How to be a good Landlord to your tenants?
1. Clear documentation
A good landlord asks tenants to sign a proper and official lease contract and stipulate in it or in other written documents the extras. If it is not in writing, it usually could not be enforced. This also assures both parties that they are on the same page. It is also a plus point if your tenants will have a say or opinion over the contract. You can get a standard lease form and this will cover the basic facets of managing a rental property like the rent, security deposit costs, and any legal rights of both the lessor and lessee. Aside from these fundamentals, you may discuss with your tenants any additional special rules you have for the property like limits on pets.
It is very unfortunate that in the Philippines, still according to the aforementioned final report, the majority of rental transactions in the country, or 56.3% did not enter into an official and written contract.
2. Know the Laws
Further to number 1 is to have a thorough grasp of renting laws both national and local. With this, you will be able to cover in your contract all the legal requirements and meet the fundamentals of leasing your property in accordance with the law. In the Philippines, there are two laws that directly regulate the leasing market and protect the welfare of both the lessee and lessor like the Republic Act no. 9653, better known as the Rent Control Act of 2009 and the Civil Code of the Philippines
3. Make those Repairs
As a good landlord, you must address the concerns of tenants. This includes the need for repairs and facilities of the property. Depending on the urgency and gravity of the damage, you must set a timeline with the tenant for how long you will be able to address the matter. You must be able to discuss this timeline with your tenants because any construction, renovation, or repair that must be done in the residential unit will also consume time and comfort to your tenant. With proper communication, your tenants will know for how long the repair will last and they will also do the necessary adjustments.
4. Good Communication
Essential to what was mentioned in the 3rd tip on becoming a good landlord, the landlord should always have an available avenue for communication and an open line for communication. Thus, as emphasized earlier, a good and professional tenant/landlord relationship is founded on good and open communication. The tenant should have a list of the means to contact you like, mobile number, email, or even telephone number. This will also assure your tenant that you keep an open line of communication and you are willing to discuss with them any pressing matter.
5. Help the Tenant Get Adjusted to the Area
Your tenants, considered to be new to the area, are not familiar around. A good landlord, though not required, will help your tenants to be familiar with the area by providing them with the direction of the nearest market, hospital, school, church, and other features of the area. Aside from this, you may also provide your tenants the contact number that they reach anytime in case of any emergencies like the contact number of the nearest fire station, hospital, barangay post, and others.
Read Also: What Makes a Good Home Location?
6. Respect the Tenant’s Privacy
Though you, as a landlord, still technically and officially own the property, your tenant’s privacy should always be observed. The fact that they are paying you their monthly dues gives your tenants additional rights as residents of the tenants. It would be better if you would advise your tenants every time that you come to collect the rent or just to check as part of your management responsibilities. This is better if you will also indicate in the contract how frequent you will visit the property for checking and inspections.
Read Also: Greater Privacy and Security in an affordable House and Lot
7. Exercise Compassion
The last useful tip to become a good landlord is be empathetic to the situation of your tenants. Though undeniably that it is your tenant’s responsibility to meet the monthly dues, there are circumstances wherein the tenants would not be able to pay their monthly rentals. Like what happened during the global pandemic where many lost their jobs. As landlord, you should be able to provide them with a compassionate extension for them to have ample time to meet their responsibility. This will not just assure you as a landlord of continued income, this will also be considered as your humanitarian assistance to those in need. As we have seen in the Rental Control Study: Final Technical Report, the majority of those renting are those challenged economically.
