A Landlord's Most Important Decision Is?

The most important decision any landlord makes is deciding who
can live in their property. Who will you, as the owner, allow to
live in your investment? This decision is so vital to the
profitability of any property investment business and affects
the business on so many levels that it's amazing that some
landlord don't have a formalised procedure to protect themselves
from making bad decision.

Let's think about what we're actually doing when we rent a
property. Instead of thinking of the property as a monthly
income generator think of it as a pile of cash. Cash you have
tied up in the deposit and purchasing costs. Cash you hope to
gain a regular income from through renting and more cash that
you'll receive if you sell the property and realise your capital
gains. (Assuming house prices have risen since you purchased).
If you include in this the value you place on your time spend
finding the property, buying and arranging the rental then we
have a very serious investment on our hands indeed.

Now, imagine all that money in real, tangible terms, stacked up
in a room in the house and then consider we hand over the keys
to someone and say, "See you next year". Now we can begin to see
how important it is to select the right tenant. Of course, I'm
being dramatic and we do have legal safe guards but I hope that
by considering your investment in terms of hard cash (like a
professional investor) then you'll treat the question of
occupancy very seriously.

There's more to it than just financials. Not only are we
trusting the tenant to look after our investment but we're also
investing our free time with them. What do I mean? If we are
managing the property ourselves and not using a letting agent
then we have made a serious commitment in time to look after
that tenant. If you have a tenant who does not appreciate your
property or does not treat it with care and respect then you run
the risk of losing your evening and weekends in maintenance and
management tasks. What about rent collection? An unreliable
tenant who does not pay on time creates stress and worry. Legal
protection lets us all sleep better at night but the
practicalities of recouping money and legal costs are a headache
we do not need and one that's very avoidable.