One of the oft overlooked aspects of owning investment real estate involves more of a personal touch. As an investor considers a potential purchase various familiar factors come into play. Is the acquisition price right? How much will it take to rehabilitate the property? What will the value be once repaired and most importantly, what’s the current market rent for a home in that neighborhood?

Being a landlord

All these questions are standard issue for the investor and they present themselves in regular intervals as potential projects pop up on the radar screen. But what’s the missing piece here? The investor is soon something else: a landlord. If you’ve never been a landlord, what can you expect?

As rent is paid each month and the bills are paid there has to be a physical exchange of money. Today, many tenants pay their rent online by transferring the monthly amount to the landlord’s account. If not, then it’s the old-fashioned way of putting a check in the mail. Your first landlord job is making sure you get paid on time, every time.

If you don’t get paid on time, every time, now you transition to a sort of bill collector, leaving voicemails and other gentle reminders. Yet if you did your homework correctly, you would never change into a bill collector because you properly vetted your future tenants.

Making sure you get paid on time is making sure you get someone who is both able and willing to pay their rent when due. When reviewing a lease application, make sure you confirm their employment and ask to see a copy of their most recent paycheck stub from their job. In general, rental payments should be somewhere around 30 to 40 percent of a tenant’s gross monthly income.

Review a copy of their credit report. Don’t accept a copy of a report provided by your prospective tenants, there are several online credit reporting agencies that specialize in running credit for landlords. And finally, contact their previous landlord to see what sort of tenants they were. Are they renting up or renting down? How much did they pay in rent and were they generally good tenants? And speaking of previous landlords, before you sign any lease agreement with them, drive by their current address. Is the property in good shape? Do they appear to take care of their surroundings? How they live now is an indication of how they’ll live in the future.

Finding good tenants also means marketing the property. How will you market the property for rent? There are several online rental portals where you can post your property or you can simply contact a real estate agent to find tenants for you. Using an agent comes in handy because your rental will most always be shown to potential renters at night or on the weekends. If there are other things you’d rather be doing than showing a rental on a Sunday afternoon, an agent might be a good idea.

Finally, you’re the repair person. When the sink stops up or the toilet overflow or the hot water heater no longer heats, you’re the one they call. If you’re handy around the house and can generally fix things that are broken, you can do most of the work yourself.

Getting personal with your investment properties means staying involved long after your purchase is closed and the repairs are completed. Your job is just starting. If all of this doesn’t sound like much fun to you, do what other investors do and hire a property management firm. These companies can provide the full range of tenant management services or you can select some of them “a la carte” style. In fact, if you’re an active investor you should spend more time hunting down projects and less time switching out a garbage disposal by contracting with a property manager.